Zillow is the biggest real estate portal. Zillow Offers, its iBuyer business, purchases homes directly from home sellers for cash. Zillow then flips the homes on the open market for a profit.
An MLS listing on a cash buyer marketplace like Houzeo can get you 100% of your property’s value. With Houzeo, your listing can be on the MLS within 24 hours. Moreover, you can compare offers from multiple national and local cash buyers, instead of settling for just one lowball offer.
In this blog, let’s look at Zillow Offers reviews and their alternatives to help you get the property value you deserve!
- Pros: Zillow Offers makes all-cash, no-obligation offers and closes in as little as 7 days.
- Cons: It has high service fees. As of Nov 2021, Zillow Offers has shut down its business.
- Bottomline: We do not recommend Zillow Offers for most home sellers. A listing on Houzeo.com will get you max exposure to cash buyers, including iBuyers like Opendoor. That will help maximize the cash returns on your sale.
What is Zillow Offers?
Zillow Offers is the iBuying division of Zillow, America’s biggest real estate marketplace.
Instead of a traditional listing, Zillow Offers buys homes for cash, makes necessary repairs and renovations, and resells the properties on the open market for a profit. This business strategy is called “house flipping.” It effectively eliminates the lengthy bidding, sales, and closing processes for home sellers.
Zillow’s home valuation model is called Zestimate. It is computed based on millions of data points and shows the property’s price range dating back several years. Your initial cash offer from Zillow Offers is based on Zestimate figures.
👉 What is House Flipping?
House flipping is a business strategy where an investor buys a property, fixes it up, and resells it at a profit. The intention is to limit initial investment with minimum payment and keep renovation costs low to maximize profit.
» How to Flip a House: Find out how it’s done
At a Glance: Zillow Offers
|Service Charge||1.5% to 9% (Zillow Offers claims 2.5% to be the most common for them)|
|Closing Costs||1% to 2%|
|Repair and Renovation Costs||Variable (Usually 1% to 2%)|
|Time to Offer||48 hours|
|Time to Close (Sellers)||7 to 90 days|
|Time to Close (Buyers)||Negotiable|
|Serviceable Markets||No longer operational|
|Customer Reviews Rating||No credible reviews found (Zillow Offers Reviews)|
🚩 You Won’t Know the Final Cash Proceeds Until After Inspection: Post the home inspection, Zillow will provide you a line-by-line breakdown of the transaction. Only then will you know how much your net proceeds will be.
When Did Zillow Offers Launch?
Zillow first launched Zillow Offers in April 2018, starting with Phoenix, Arizona.
Eventually, it expanded to 25 cities across 12 states, including California, Texas, Georgia, North Carolina, Ohio, Colorado, Florida, Nevada, Minnesota, Tennessee, Arizona, and Oregon.
Why Did Zillow Offers Shut Down?
In November 2021, the Zillow Group announced that it was shutting down Zillow Offers.
In the first quarter of Zillow Offers’ launch, it delivered profits twice as high as anticipated because it was lowballing sellers. But most sellers were unwilling to work with them, so the number of sales was underwhelming.
To scale up, Zillow Offers drove the other way and began overpaying for houses. The entire business model rested on the assumption that Zillow’s algorithm for property valuations would predict home prices accurately, but it could not.
As a result, the company ended up with twice as many properties to sell in the second quarter as compared to the first. As it neared the COVID-19 pandemic, it faced an operational backlog. The supply chain and labor issues slowed its ability to renovate homes quickly.
Ultimately, the house-flipping business tanked, with a loss of $881 million by 2021. CEO Rich Barton admitted that the iBuyer business was “too risky, too volatile, and ultimately addressed too few customers.”
👉 Zillow Partners With Opendoor for a Referral Fee
In 2022, Zillow partnered with its rival Opendoor. Now, home sellers on Zillow’s platform can request a cash offer from Opendoor. If the sale goes through, Zillow will get a referral fee for it.
» Opendoor Reviews: Read our in-depth and unbiased review of Opendoor
What Happens to Existing Seller Contracts?
If Zillow Offers has already agreed to purchase your home and fixed the closing date, they will adhere to the signed contract. Zillow also mentions in the FAQ that if you want to cancel the contract, you’re allowed to do so.
Check out our rankings of local cash home buyers in your zipcode:
How Does Zillow Offers Work?
⭐ STEP 1- Request a Cash Offer
Zillow Offers collects basic information about your house through a short online questionnaire with home photography for initial evaluation.
⭐ STEP 2- Receive an Initial Cash Offer
Within 48 hours, Zillow gets back with a cash offer and an agent you can work with. Zillow’s agent then sets up a call to walk you through the offer and schedule an inspection.
⭐ STEP 3- Complete a Home Inspection
If you accept the initial cash offer, an onsite inspection is scheduled. A local representative from Zillow Offers will inspect the property, estimate the repairs, and send you a revised cash offer.
⭐ STEP 4- Receive Revised Cash Offer
This final cash offer comprises a comprehensive market study, the service fees, closing costs, and the cost of repairs, all of which are deducted from the initial cash offer.
⭐ STEP 5- Close the Deal
If you accept the offer, you sign the forms digitally and select a closing date between 7 and 90 days.
👉 Note: After closing the deal, contractors working for Zillow undertake small renovations to upgrade the property and prepare it for resale. Zillow works with local agents to flip homes and pays commissions to agents on each transaction.
Zillow Offers Fees
iBuyers charge service fees to cover the costs of buying, handling, and selling your home.
The average selling cost of Zillow Offers is 6% while the average service charge is between 1.5% and 9%. Zillow Offers also charges a 2.5% convenience fee to provide a quick, hassle-free sale on the day of your choice.
They also charge 1% to 2% closing costs, which includes:
- Transfer tax
These fees exclude the estimated cost of repairs that Zillow Offers will take into consideration after evaluating your home’s condition.
So, your final offer will include multiple fees, which can go up to 9.5% to 19%. A traditional sale will cost you 6% agent commission, 1% to 3% closing costs, and 1% to 2% repairs, which add up to 8% to 11%.
With Zillow Offers, you leave a lot of money on the table in exchange for avoiding the home selling hassle, time commitment, and uncertainty of a traditional home sale.
Can You Negotiate with Zillow Offers?
Zillow claims to make the best offer upfront to eliminate the need for negotiations. That means sellers should not expect Zillow Offers to budge on the price very much, if at all.
If you want to negotiate with buyers and choose from multiple offers, you’ll need to list your property on the open market.
💲 Multiple Cash Buyers Compete for Your Property on the MLS
Listing on Houzeo will get you maximum exposure to local cash buyers. More competition means top dollar offers for your home sale!
START A FREE LISTING NOW
Are Zillow Cash Offers Good and Competitive?
If getting top dollar for your home is a top priority, consider selling with a flat-fee MLS listing company like Houzeo.com.
Zillow Offers for Home Buyers
When you look at properties on Zillow and notice the “Owned by Zillow” icon, it signifies that Zillow Offers has bought the house, made the necessary repairs, and put it up for sale.
You can take virtual 3D tours of Zillow-owned homes on the website or through the Zillow app.
If you’re interested in a Zillow-owned property, you can contact its listing agent online and expect to get a response within 48 hours, as per Zillow.com.
You can inspect the house and request repairs to the property if needed. Zillow will consider non-functional items and safety issues. It typically will not upgrade or replace working items, but you can still raise a request if needed.
Zillow Offers Reviews
Zillow Offers, as a subdivision of Zillow Group, doesn’t have any independent and credible reviews on Google, BBB, or Yelp. But some customer reviews on Reddit show that Zillow Offers lowballs sellers and utilizes internal assessments to impose unfair closing conditions.
Another common complaint, as per the Zillow Offers reviews in this Reddit thread, is that they tend to back out of a deal. The seller received a too-good-to-be-true cash offer from Zillow, who eventually backed out of the deal because the seller had a solar panel loan attached to it.
Instead of buying the house, Zillow offered the seller to work with one of its agents and go down the traditional home-selling route.
- 💡 FACT: Home sellers on Houzeo have received offers from a variety of cash buyers, including iBuyers like Offerpad and Opendoor.
Benefits of Selling Your Home to Zillow Offers
✅ Quick, Hassle-free Sale
With a traditional model, you have to list on the MLS and wait for potential buyers. Zillow eliminates the listing time and the house sale happens at lightning speed. The speed of the sale makes cash home buyers appealing to home sellers in desperate need of liquidity.
✅ They Close Fast
Zillow Offers close faster than a traditional sale because there is no longer a need for listing agreements, paperwork, or waiting for mortgage approval.
✅ They Offer Cash
Zillow Offers makes an all-cash offer on your property after taking repairs into consideration. So, they can be an option for those in desperate need of cash.
✅ Certainty of Sale
When dealing with an iBuyer like Zillow Offers, the chances of your transaction going astray are lesser compared to the conventional model of selling a house. There is an assurance that your property will close and you will have hard cash in hand.
Drawbacks of Selling Your Home to Zillow Offers
⛔ They’re No Longer Operational
Zillow Offers shut down its business in 2021 after incurring a loss of $881 million. It has now partnered with Opendoor. It charges a referral fee when home sellers transact with Opendoor through Zillow.
» Opendoor Reviews: Read our in-depth and unbiased review of Opendoor
⛔ You’re a Lead for Zillow Premier Agents
Zillow essentially earns from selling advertising space to agents that want to reach its targeted consumers. So, once you sign up for Zillow Offers, you are being targeted as an eligible lead to hundreds of real estate agents who are a part of the “Zillow Premier Agents” program.
⛔ High Service Fees
Zillow Offers’ fees can go up to 19%, as opposed to the 11% of a traditional sale. FSBO websites or low-commission agents offer services for a lot less than this.
⛔ Non-negotiable Cash Offers
Zillow Offers makes a take-it-or-leave-it deal. If you feel the company overlooked something important, you can submit evidence to support it and ask to negotiate. But in most cases, it will be unwilling to budge on price.
🏡 Maximize Your Cash Offer with Houzeo
Houzeo syndicates your MLS listing to thousands of real estate websites and provides unparalleled exposure to your property.
START YOUR MLS LISTING NOW
⛔ Limited Coverage
Zillow Offers covers only 25 cities in a select few states in the USA as given in the table.
|Colorado||Colorado Springs, Denver, Fort Collins|
|California||Los Angeles, Riverside, Sacramento, San Diego|
|North Carolina||Charlotte, Raleigh|
|Florida||Jacksonville, Miami, Orlando, Tampa|
|Texas||Austin, Dallas-Forth Worth, Houston, San Antonio|
⛔ Zillow Offers Can Back Out of a Deal
Considering the Zillow Offers Reviews in this Reddit thread, the company can revoke the deal even after making a cash offer to you if your property doesn’t fulfill any of their stringent requirements.
Alternatives to iBuyer Zillow Offers
Since Zillow Offers is no longer operational, we advise you to spend a few days looking over its superior alternatives to ensure that you receive a fair market price for your home and prevent financial loss.
1. Other iBuyer Companies
There are other iBuyer companies in the market that buy homes for cash. You can request an offer from multiple iBuyers and pick the one that suits you the best.
» iBuyer Reviews: Check out our 2022 rankings for all iBuyers companies in the U.S.
2. We Buy Houses for Cash Companies
“We buy houses for cash” companies are cash home buyers that function differently than iBuyers. These companies prioritize resale earnings by purchasing homes at a significant discount to the market value.
» We Buy Houses for Cash Companies: Understand how they work and what are some of the best companies in this category
“Cash for Houses” Companies Near You
3. Sell in the Open Market Without a Realtor
Selling a house without a realtor is easier than ever and the process is not as daunting as you may think. Many For Sale By Owner (FSBO) and Flat Fee MLS companies like Houzeo.com make the home selling process a cakewalk. And they ensure top dollar for your property.
Why It’s #1: Houzeo gives you the best combination of max exposure, 5-star customer service, fast listing & changes, and cutting-edge technology.
Packages: Houzeo offers 4 For Sale By Owner MLS listing packages.
- Bronze Package – $299+: It is the best for selling a lot or land property by the owner. Your FSBO listing gets syndicated to Zillow, Trulia, Realtor, Redfin, and more.
- Silver Package – $349+: This includes everything that FSBO home sellers typically look for.
- Gold Package – $399+: Gold is Houzeo’s signature MLS package and includes all the technology Houzeo is known for: Houzeo Showings, Houzeo Offers, and DigiTransact.
- Platinum – $999+: It includes the assistance of a licensed broker to help you with negotiations, disclosures, and closing.
👉 Our Recommendation: We recommend Houzeo’s Gold Plan for most home sellers. The Gold plan includes all of the advanced features Houzeo is known for. If you are on a budget, Houzeo’s Silver plan is comparable to most companies’ For Sale By Owner packages.
» Houzeo Reviews: Houzeo.com has a 4.9/5 rating with thousands of reviews
- Near Nationwide Coverage: Houzeo covers 47 states + DC
- No Listing Agent Commission: With Houzeo, you only pay a small flat fee to list on MLS and get access to all the Houzeo tech.
- 100% online: Easy listing, fast changes, online showings, and online offers
- Max Exposure: Listings get syndicated to Zillow, Realtor.com, Trulia, Redfin, and 100s of other real estate sites
- Fast Listing: Rush listing option gets you listed within a business day with Houzeo Concierge
- Real Estate On the Go: Houzeo Mobile App mimics most functionality of the Houzeo web platform, including Offers and Showings
- 5-Star Customer Service: Superb support that minimizes Houzeo complaints
- No Hidden Fees: There are no Houzeo hidden fees
» Is Houzeo Legit: Learn more about Houzeo’s locations and coverage
Houzeo is available nationwide with coverage in 200+ markets.
Introducing the Houzeo Mobile App!
- View your listing
- Manage your showings online
- Review and compare offers
- Counter an offer
- NEW! Buyers can now search your property and save it in “Favorites”
» Flat Fee MLS Companies: Everything you need to know about the best flat fee MLS companies in the USA.
Bottomline: Should You Sell Your Home for Cash to Zillow Offers?
The main attraction of Zillow Offers is its quick sales for qualified sellers. However, factors including eligibility, limited coverage, and high service fees make it a less appealing option. Moreover, it is no longer operational.
Most home sellers are unaware that listing a house on the MLS makes it easy to sell a house in competitive markets. Even if you aren’t a licensed broker, flat fee MLS services like Houzeo allow you to list on the open market. When you list on the MLS with Houzeo, you get a personalized dashboard, a 100% online platform, and prompt customer service—all for a fixed fee. And you can do it all on your phone!
🚀 List on MLS with Houzeo: You can finish the listing formalities in less than 1 hour. Start NOW!
Frequently Asked Questions
1. Is Zillow Offers a good deal?
No, Zillow Offers make lowball offers and buy properties in good condition that they can resell quickly. If you don't have the time or money for repairs, negotiations, showings, and handling other aspects of the home-selling process or don't mind leaving money on the table, then they can be an option.
2. What does it mean when a house is owned by Zillow?
Zillow-owned homes are properties that have been purchased by its iBuyer division, Zillow Offers.
3. Why is Zillow not buying homes anymore?
Zillow Group announced in November 2021 that it will discontinue its iBuyer division Zillow Offers because of the losses it incurred due to the housing market's volatility.
4. How much did Zillow lose flipping houses?
Listings giant Zillow lost $881 million on its failed home-flipping business in 2021. As a result, it had to discontinue its iBuyer division, Zillow Offers.
5. Is Zillow Offers legit?
Yes, Zillow Offers was a legitimate iBuyer division of the Zillow Group. It was launched in 2018, but after incurring losses worth $881M in 2021, the Zillow Group shut down this house-flipping business.
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