Zillow, the online real estate database giant, has announced it will now go beyond simple real estate listings in Denver by offering instant offers.
Zillow Instant Offers previously launched in Las Vegas and Phoenix in the spring. The program will be expanded to Atlanta this month and Denver by the end of the year.
The Seattle-based giant won’t be alone in Denver, however: Opendoor is also bringing its instant offer service to the city. Opendoor has been providing instant offers for four years longer than Zillow and it’s ready to launch in Denver in October. Denver will become its 15th market.
The Denver market marks Zillow’s first foray into a more expensive real estate market. The first few Instant Offers markets had median home prices in the $200,000s whereas Denver has a median home value of more than $414,000 and has started to appear on lists of the country’s most unaffordable housing markets.
Opendoor uses software to predict the value of a home and make an instant offer which also comes with a 7% transaction fee. If a seller agrees to Opendoor’s offer, the company will flip the home by selling it to another home buyer.
Zillow’s Instant Offers program is similar: eligible homes receive cash offers that can be paid in a matter of days. Homeowners receive the offers from 15 hand-chosen major private investors with a side-by-side comparative market analysis. When a homeowner receives an offer from a participating investor, they can accept the offer and sell the home directly to an investor, accept the offer but use a real estate agent to close the transaction, or reject the offer and list their home for sale on the MLS with an agent.
The instant offer services are both geared toward a specific type of buyer: someone who wants to sell quickly and easily but not necessarily for top dollar.
It’s possible that Zillow and Opendoor will have the ability to disrupt the status quo in the real estate market thanks to their size, budgets, and consumer recognition. Early concerns were that Zillow would use the service to recruit sellers and line up home buyers in advance to eliminate agent commissions. Jeremy Wacksman, the president of the Instant Offers program at Zillow, has already said that their program has agents involved, stressing that Zillow is not a home flipper and is not looking for distressed homes. The fee is also higher than what homeowners would pay to sell their home on their own or through an agent.
Denver homeowners who want to test drive the Instant Offers program can click on a button on Zillow to request an instant offer. After filling out a form, homeowners will receive an initial cash offer within two days. If a homeowner wants to accept the instant offer, they will work with a local employee and have a licensed inspector dispatched and paid for by Zillow to determine if public record information is correct and if the home needs repairs.
Contractors who work for Zillow will perform small repairs to prepare the home for sale and Zillow will work with local agents to list and sell homes. In Denver, Zillow will work with Berkshire Hathaway HomeServices Innovative Real Estate, RE/MAX Alliance, and 8z Real Estate.