19 Feb Is Zillow Offers Good or Bad for Sellers in Atlanta?
In September 2018, Atlanta became the third market to launch Zillow Offers, a program in which potential home sellers can request an offer from Zillow to buy their home, prepare it for sale then list it on the market. According to Jeremy Wacksman, Zillow’s Chief Marketing Officer, the program was designed to help sellers who were struggling with selling their homes and needed to consider options and alternatives by making a quick cash sale where they control the timing and the terms. Homeowners can go to Zillow’s website, enter in their address, and receive an cash offer from Zillow on their home, along with a comparative-market analysis from a real estate agent of what the home might sell for on the market. The program is quick and convenient for sellers looking to sell quickly.
But according to Hank Bailey, a Georgia real estate agent at Re/Max Legends, that convenience comes at a price. In a post written by Bailey, he says that sellers who use Zillow Offers should be prepared to take a 10-15% discount or higher on the amount they are paid for their home, which may seem a bit nonsensical since Atlanta is a seller’s market. Bailey says, “So what they are talking about is if your home is worth $300,000 that they think it “may” be worth it to you to sell to Zillow’s investors without having to show or do anything to your home and they’ll take $30,000-$45,000 for their troubles. […] They are going to take a sizable amount of equity the market has put in your home over the past decade as a ‘convenience fee’ to sell quickly.”
Sellers who request a Zillow Offer, but either do not receive an offer, or who decide to instead sell their house traditionally with an agent or do not receive a Zillow Offer, will be connected with a local brokerage or a “Premier Agent” who is partnered with Zillow. The two partner brokerage firms that have partnered with Zillow are Berkshire Hathaway Home Services Georgia Properties and Better Homes and Gardens Real Estate Metro Brokers.
But regardless of if a homeowner sells through Zillow Offers or through one of their partner brokers or agents, they will still have to pay Zillow a 1.5% fee on top of any discounts or commission fees. So is it worth it for sellers to go through Zillow Offers for a quicker sale but a smaller return, or to hire a realtor who strives to get the highest return, but that could mean a longer time on the market? I guess the sellers will have to decide what is best for their individual needs.
Zillow will begin buying and selling homes through its Zillow Offers program in five new markets in 2019: Miami, Minneapolis-St.Paul, Nashville, Orlando and Portland.