No, Zillow is not going to buy your house.
The internet blew up again, but this time it was the REALTORS® who cried foul, and I think, like others in the community, that many of them forgot about Chicken Little, cause the sky ain’t fallin, and Zillow isn’t going to buy your house or put you out of business, if you’re willing to shift with the changing tides.
Zillow is huge. Zillow has lots and lots of data. Zillow is the popular kid on the block. Despite the circle of life that we have with Zillow, plenty of people in our industry are angry at them because they believe things are happening that aren’t true.
The latest news from the advertising giant is that they are partnering with investors to connect them to home owners who prefer to sell to them instead of marketing their home to the general public with the help of a REALTOR®.
There’s nothing new going on here. Investors knock on doors all day long to find sellers who need a quick sale to get out of a situation they don’t want to be in anymore. True, not everyone who sells to an investor is savvy enough to realize they’re giving away the farm, but for the most part, direct investor to customer transactions yield a lower sales price and subsequently the seller loses some of their equity in exchange for a hassle free sale. Often this amounts to thousands of dollars, which is usually worth the “hassle” of marketing the home with a REALTOR®.
Zillow is just making it easier for investors to find those sellers, and making it easer for sellers to find those investors. If you want to sell your home directly to an investor, expect to lose about 2-3% more of your home’s equity at closing. If that’s worth it to you, then by all means, go for it.
But, if you want the most money for your home in the least amount of time, you need to hire a professional who understands the market from a resale perspective, not a fix and flip perspective or investment perspective. When an investor buys your house, they’re going to turn around and sell it, or they’re going to rent it. Unless rent can provide a good enough annual return on their initial investment and/or they can flip it in a short enough period of time and at a high enough price to make a profit, they won’t be interested.
Investors are trying to make money, and they make money when they BUY the property, not when they sell it. They cash in when they sell it, but the profit is made when you accept a price for your home that’s lower than what you could get if you were fairly represented.
If getting out quickly is more important than retaining the equity in your home, then a quick no-hassle sale to an investor might be right for you. Otherwise, stick to hiring a REALTOR®, a fiduciary.