PORTLAND, Ore. — Companies in the iBuying industry are hoping to turn the home selling experience, typically a high stress, low tech process, on its head by offering cash offers for homes online.
Zillow entered the iBuying market Monday launching its Offers program in Portland and Vancouver.
The well-known brand will be competing against other iBuying companies including Open Door and Knock.
According to Zillow, homeowners can go on the site or app, answer a few questions and get an instant no obligation cash offer in 48 hours.
Zillow Offers first launched in Phoenix last April and is currently available for home sellers in Las Vegas, Atlanta, Denver, Charlotte, Raleigh, Houston, Riverside, Dallas, Minneapolis, and Orlando.
In each market, Zillow pays a commission to local real estate agents when it buys and sells a home.
“It's a new way for homeowners to sell their home and to make the process easier for them, more convenient and more liquid,” said Jeff Knipe, owner of Knipe Realty ERA powered, the local Zillow partner Portland and Vancouver.
If you accept Zillow’s offer, you’ll be connected with Knipe’s team.
“So, we’re going to send our evaluation team out to look at your home and then you pick your close date anytime between five to 90 days and then we’ll go into a contract with you,” said Knipe.
Knipe says the advantages are the instant cash offer and the fact that the seller doesn’t have to do any staging or do any repairs.
However, there is a cost to the convenience, Zillow charges a fee for the service which averages 7%.
“If you look at the 7% fee though and you look at the traditional sale of 5% to 6%, that convenience factor is not that great,” said Knipe.
Gerard Mildner, an associate professor of real estate finance at Portland State University, says it’s always better when the consumer has more options.
“I think it’s a tradeoff between the price you ultimately get and how fast you get your money,” said Mildner.
His advice before accepting any offer - do your homework.
“If Zillow says we want to pay this price for your house, make them prove it. Ask them to show the comps to show why they came up with the price they came up with,” said Mildner.
As of May, more than 100,000 homeowners across the country have requested a no-obligation cash offer from Zillow to buy their home - equal to a request for an offer every two minutes.