Zillow Group is set to start buying houses in the Pacific Northwest for the first time.
Zillow Offers, the service that lets customers request cash offers for their homes directly from Zillow on its website, kicks off Monday in Portland and Vancouver, Wash. As Zillow has made instant offers the centerpiece of the business, it has expanded to 12 markets across the country, with plans to grow even further.
“Sellers across the country have shown that they are looking for an easier, less stressful way to sell their home,” Zillow Brand President Jeremy Wacksman said in a statement. “We’re excited to launch our first market in the Pacific Northwest today, giving potential home sellers in Portland and Vancouver the certainty and transparency they want when selling their home. Zillow Offers provides a seamless transaction experience, helping sellers move on to the next step in their life.”
Under the program, some homeowners in Zillow Offers markets see a button on the Zillow site that says “get an offer.” The seller fills out a short questionnaire and sends in a couple photos. About 48 hours later, Zillow comes back with an offer and an agent to work with. The seller and Zillow set up a call to walk through the offer and schedule an inspection. Then Zillow sends a revised offer after seeing the house. If both sides are happy with the situation, the seller signs forms digitally and picks a closing date. Zillow takes care of the rest.
Contractors working for Zillow undertake small renovations to prepare the home for sale. Zillow works with local agents to list and sell the homes and pays commissions to agents on each transaction. Zillow attaches a service fee for the seller in exchange for avoiding the hassle, time commitment and uncertainty of a traditional home sale.
Zillow is betting the future of its business on instant offers after a surprising pivot in February that included the return of co-founder Rich Barton to the CEO chair. Zillow’s focus until this switch has been real estate advertising and information. But the company believes it can bring in $20 billion in revenue in three to five years on home sales alone. Zillow as a whole brought in $1.3 billion in revenue for all of 2018.
As part of this shift, Zillow has also doubled down on mortgages. And Barton recently foreshadowed an expansion into other parts of the home sales process, including title and escrow, insurance, and maybe even moving.
Zillow Offers launched in April 2018 in Phoenix, and it is growing rapidly. Zillow plans to launch the service in Austin, Los Angeles, Miami, Nashville, Sacramento, San Antonio, San Diego and Tampa, bringing the total number of Zillow Offers markets to 20 by the end of the first quarter of 2020. Zillow wouldn’t comment on when or if it will expand Zillow Offers to its hometown of Seattle.
Zillow is facing a number of competitors in the so-called iBuyer market of companies that buy homes directly from consumers, fix them up and aim to sell them for a profit. One of its top competitors is Opendoor, which is already in 20 markets and aims to get to 50 by the end of next year.
Opendoor this week formed a surprising alliance with Zillow’s crosstown rival Redfin. Customers in Atlanta and Phoenix can now request an instant offer from Opendoor on Redfin’s website or mobile app to buy their houses.