I’d bet we’ve all heard of the “we buy ugly houses” companies that offer to buy your home as-is for cash. Now Zillow and a newer company called Opendoor are making similar offers in the Aurora, Centennial, and Denver area. Given my profession, what I’m about to say may shock and surprise you: there may be cases where taking this approach is a better option than working with a REALTOR® to sell your home.
REALTORS® and Zillow: A History of Being at Odds
Established in 2006, Zillow is widely viewed by real estate agents as “the enemy.” I’ve even seen texts and emails circulating in the industry about how agents “need to band together and stop” these and similar companies. There are two main reasons behind this reaction:
- Non-level playing field: When Zillow posts a listing, the listing agent’s information is only included if the listing agent pays a fee to Zillow. Otherwise, Zillow’s database populates the screen with nearby nonlisting agents. This practice can mislead the buyer and is viewed by many agents as a strong-arm tactic on Zillow’s part.
- Stale, confusing, misleading, or incorrect information: Zillow seems to get new listings posted quickly but doesn’t do so well at accurately describing a home as off-market, taking down expired listings, or updating the status of listings once an offer is made or a sale closes. Agents dislike this because it makes the home search harder for buyers and because it makes it harder for valid current listings to stand out.
Now Zillow and Opendoor are offering to buy your Aurora, Centennial, or Denver metro area home. Zillow is testing their “Zillow Offers” model in Denver as well as Atlanta, Las Vegas, and Phoenix; Opendoor is operating in major cities in Arizona, California, Florida, Georgia, Minnesota, Nevada, North Carolina, Oregon, Tennessee, and Texas. They say they can buy your home as-is, close in a week or so, and charge a fraction of standard commissions. While this appeals to some sellers, it makes a lot of agents uneasy.
(According to the Zillow website, “Once the home is owned by Zillow, we’ll promptly make necessary repairs and updates, then put the home back on the market in move-in-ready condition through the MLS.” Opendoor does the same.)
When Selling to Zillow or Opendoor Might Make Sense
Great real estate agents focus not on themselves, but on their clients. And in some cases for some sellers, selling to Zillow or Opendoor might actually be a good choice. Here’s my perspective.
The pros include:
- Quick sale
- No need to make repairs
- No need to declutter or deep clean
- No need to make the home available for showings
- No back-and-forth negotiations like in a typical sales process
The big con or downside is the likelihood of the offer coming with a below-market sales price – typically as much as 15-25% below market value. On a home valued at $350,000, that equates to roughly $70,000 of lost equity. I know I wouldn’t be comfortable with that.
I do think the Zillow or Opendoor approach can make sense for sellers in the following circumstances:
- You don’t have the financial resources to make the home showing-ready
- You don’t have the time to make the home showing-ready
- You live out of state
- You inherited a home that hasn’t been updated or properly maintained in decades and don’t wish to live in it or fix it up as a rental
In these situations, it might be wise to just let the home go.
I hate to see anyone leave that much money on the table, though. So if you’ve been considering selling your home to Zillow or Opendoor, I encourage you to contact me first. As a local market expert, I can give you an educated opinion on your home’s current value. I can also help you understand what repairs or changes would bring the best return in the shortest timeframe and with the least investment. Finally, in many cases I can refer you to skilled vendors in my network who can complete the work on time and on budget. Contact me at 303-204-6494 or firstname.lastname@example.org.