Zillow tests Instant Offers in Orlando
Orlando and Las Vegas rolled out this week as test markets for a new service that lets sellers forgo the hassles of decluttering, staging and showing a home and instead seek offers from a pool of real estate investors.
Using Zillow’s Instant Offers service, property owners upload photos and details about their homes to a free portal, where they can collect bids from investors whose experience and financial health meet Zillow’s criteria. Zillow also refers real estate agents to the sellers, in case they opt to sell in a more traditional way and pay a commission.
Winter Park real estate agent David Welch said it’s good to give sellers another tool, but he thinks Instant Offers has limited appeal.
“I am sure there will be some sellers who may take advantage of this instant-offer service,” he said. “Most sellers, however,
would rather take a little more time and offer their home on the open market to get the best price.”
In Orlando, the owners of a home in the Williamsburg area have opted to try Instant Offers. Zillow offered few details, such as how many local property owners have tried the service that launched Monday or how the website profits from it. Participating investors will conduct Instant Offer transactions via Zillow subsidiary DotLoop, according to a report Tuesday by industry publication HousingWire.com.
Orlando Re/Max Innovation broker Veronica Figueroa said Zillow referred her to the Williamsburg owners in case they don’t like the offers they get from investors. She said she gave the owners price suggestions based on an analysis of sales in their neighborhood market. Owners aren’t obligated to list with her.
Some real estate agents, Figueroa said, are concerned the service could be the beginning of a new model that cuts them out.
“The agents are scared; they think it’s disrupting the market. I think this is just going to elevate the industry,” she said. “Anyone who thinks this is an agent-centric business is completely wrong. This is a consumer-centric business. Good agents will always be in demand.”
Figueroa said that she could still profit and help the sellers even if they want to sell to investors. She said she could just charge nominal fees to simply handle the closing of the sale, which would likely be far less than paying a commission.
The service follows a similar model by OpenDoor, which promises quick home sales by buying properties without showings. The 3-year-old company serves markets including Phoenix, Dallas and Las Vegas.
The Zillow rollout takes place in Orlando and Las Vegas — two of the hardesthit housing markets in the country.
Investor activity peaked in Orlando as the housing market bottomed out five years ago. But investors are still interested in the region. April sales prices in an area of mostly Orange and Seminole counties were down about 20 percent from a peak of $264,436 in July 2007, according to the Orlando Regional Realtor Association.
Instant Offers also comes at a time when the Orlando region has relatively low levels of inventory and houses increasingly land multiple offers.
Adam Wonus, an Orlando residential real estate investor, said the model is interesting, but he has found national auction-style sales lead to prices quickly getting bidded up by out-of-state buyers who don’t understand the nuances of the local market.
“I get most of my properties from local real estate agents who know the area and the property,” he said.
Instant Offers can be attractive — particularly for sellers who are on a short time frame and need to schedule a closing date as soon as possible, said Jeremy Wacksman, Zillow’s chief marketing officer.
“We want to provide options for convenience while providing home sellers with useful information to help them make an informed financial decision,” he said. “That’s why we provide them with any offers submitted by investors, as well as an estimate from a real estate agent who can help them better understand what that home may sell for on the open market.”