Have you heard? There’s a new kid in town and their name is Zillow. We’ve seen it creep it’s way in slowly, but surely over the years, however, word on the streets says they are preparing to take overeverypart of our real estate industry. Is it true? Here’s what we know right now:
What We Know So Far
The rumors are true, there are a ton of job listings for title and escrow positions on their website, such as Title Examination Manager, Title Examiner, and Escrow Officer. Is Zillow really attempting to takeover the industry? Zillow’s own mission statement stated in their job listings is to “make the process of buying or selling a home a consumer friendly, state of the art experience that can be launched with just the click of a button.” This means that they are most definitely in the process of making themselves the one-stop shop for home buying and selling minus the middle men like title agents.
Besides the surge of job postings for their Title & Escrow Agency, Zillow has been working on invading other branches in the real estate industry. In case you hadn’t heard Zillow Offers is a bold step into their take-over initiative. This branch of Zillow works as a way for home sellers to sell their home quickly, or on their own time. It’s provides a streamlined way to sell a home.
Home Details: To start, you’ll answer some questions about your home and send in photos. The company emphasizes that there is no need for professional photos, just snap some quick photos of whatever your home looks like in the moment.
Offer: Next, if Zillow deems your home eligible, you will receive a cash offer. You can choose to either accept the offer, decline, or work with a real estate agent.
Next Steps: Should you accept the offer, you will then pick a closing date. An evaluator will be sent out to the home and complete an evaluation, leading to the final, more accurate sale offer.
It can only be speculated and presumed that as they continue to grow this sector of their business, one might wonder if they are going into the “home flipping” business.
Claim They Don’t Flip Houses, but They Do
Zillow Offers denies it, but in essence, what they are doing is flipping homes. Here’s a direct quote from their FAQ page on the subject:
“We take care of the repairs and prep work a homeowner would normally have to do themselves to get a home ready to list, and we handle the showings, open houses and maintenance while the home is listed so the seller doesn’t have to.”
However, the process described above is essentially the same process done when “flipping a home”, just not necessarily focused on profit margin (aka the buy low sell high method). With that being said, how in the world are they going to make money off this system? If you’re providing potential customers “fair market value” right off the bat, how will you continue to make a profit margin that is sustainable? Steve Eisman, a well-known real estate investor, says it best: “Either, one, Zillow has mispriced the house or there’s something wrong with the house.”
What Do We Do Now?
So what do you do now that Zillow is really entering the picture? The good news is, it could take years for this to become a viable business, considering just last quarter they lost $71 million in their Homes division, and more than likely, there’ll be more hiccups down the road. However, one thing you can do to get ahead of the game is market yourself well! Utilize whatever websites, ads, or social media you have and promote your own talents. Be sure to show off your strengths and point out what you can do that algorithms cannot. Don’t sell yourself short and charge your fees appropriately. Remember, not everyone’s preferences may be in line or comfortable with Zillow’s non-traditional home buying option. Zillow may mean more competition, but that doesn't mean you’re out of the game!