Zillow’s New Cash Offer Program – What We Like | Don’t Like

Home Egg
By HomeEgg.com
February 26, 2021

Zillow made headlines recently for enhancements to their iBuyer / cash offer home purchase program.

Here’s a first cut at what we like and don’t like and what it may mean for homeowners.

Like: Consumer choice. We like Zillow’s ‘ibuyer’ program because it provides consumers with more options for how they sell their home. If speed and convenience are top priority, this could be a great choice for consumers in those markets served. iBuying is not a new concept, but Zillow’s preeminence in the market and big-bet on the model, carries instant credibility and assurance to prospective home sellers that they’ll get a fair deal and positive consumer experience.

Don’t Like: Price Command and Control. One of the golden rules in real estate is that a home is only worth whatever price someone is willing to pay for it. With Zillow’s public-facing Zestimate now being an ‘offer’, they’re effectively threatening limiting the equity (cash proceeds) that homeowners could potentially gain elsewhere in market. We view this as an existential threat to homeowners and the equity they’ve worked hard to build over years and years.

Bottom Line: Sellers should educate themselves and compare their outcomes from ALL 5 home sale methods before locking into any single commitment. These five home sale method include 1) traditional broker 2) discount broker, 3) For sale by owner (FSBO), 4) iBuying / Cash Offers, 5) Trade In.

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