Zillow Offers direct home-buying operation expanding to more markets in 2019
by Nat Levy on January 17, 2019 at 5:00 am
Zillow Offers will go live in at least eight more cities in 2019, including five just announced today.
Zillow said today that its direct home-buying and selling service will kick off in Portland, Miami, Minneapolis-Saint Paul, Nashville and Orlando by this fall. That’s in addition to three previously announced expansion markets for 2019: Houston, Dallas and Riverside, Calif.
Today, Zillow Offers is live in Las Vegas, Atlanta, Denver, Charlotte, and Raleigh. The program started approximately nine months ago, and since then the real estate market in some parts of the country has cooled significantly.
Zillow Offers is designed to work well in both hot and cool housing markets, officials have said. Zillow has as much insight into the market as anyone and can adjust if major changes appear on the horizon. Zillow Offers can prosper in a down market because buyers will be more inclined to go with a quick sale rather than having to deal with the home sitting on the market for months, Zillow executives previously told GeekWire.
Zillow Offers brought in $11 million in revenue in the third quarter, and the Homes segment that program falls under reported a loss of $16 million. Zillow purchased 168 homes and sold 36 homes through Zillow Offers in the third quarter.
The pace of Zillow’s transactions is speeding up. In October alone, the company bought 130 homes and sold 32, Zillow CEO Spencer Rascoff said on a call with investors in November. Eventually the company will buy and sell as many homes in a week as it did in the third quarter.
Zillow expected to generate $30 to $40 million in revenue from Zillow Offers in 2018, which is down from earlier projections in May of $125 to $255 million. It expects to hold 300 to 550 homes in inventory, down from 300 to 1,000 homes.
Under the program, some homeowners in Zillow Offers markets will see a button on Zillow that says “get an offer.” The seller fills out a short questionnaire and sends in a couple photos. About 48 hours later, Zillow comes back with an offer and an agent to work with. The seller and Zillow set up a call to walk through the offer and schedule an inspection. Then Zillow sends a revised offer after seeing the house. If both sides are happy with the situation, the seller signs forms digitally and picks a closing date. Zillow takes care of the rest.
Contractors working for Zillow undertake small renovations to prepare the home for sale. Zillow works with local agents to list and sell the homes and pays commissions to agents on each transaction.
Nat Levy is a staff reporter at Geekwire covering a variety of technology topics, including Microsoft, Amazon, tech startups, and the intersection of technology with real estate, courts and government. Contact him at firstname.lastname@example.org and follow him on Twitter at @natjlevy.