Zillow launches online home-buying operation
Zillow, the Seattle-based real estate listing and data firm, is now buying and selling homes directly from consumers in the Houston area, joining a growing crowd of so-called iBuyers shaking up the traditional real estate business model.
The company launched its Zillow Offers operation in Houston Monday, adding to a service it already offers in Phoenix, Las Vegas, Atlanta, Denver and Charlotte and Raleigh, N.C.
Part of a new breed of investors, iBuyers purchase homes directly from sellers and quickly put them back on the market. Homeowners who sell their houses to iBuyers don't have to stage their homes or hold open houses, and they can choose their closing date. That convenience can come at a higher cost to the seller. Where traditional agents charge commissions of up to 6 percent, iBuyers can charge fees of as much as 10 percent of the price they pay for the home.
Sellers go online to provide information about their homes and typically receive notice of interest within two days. IBuyers only purchase homes that meet specific criteria; they typically don't buy properties built before the
1960s or that would sell for more than $500,000 or $600,000.
Zillow Offers will join Offerpad, OpenDoor and others offering similar services in Houston.
San Francisco-based OpenDoor began buying homes in Houston last summer. It now has 132 properties for sale in the area, about a quarter of which are under contract to a buyer. The company said it is in the process of buying another 149 homes in the market.
“It’s going very, very well,” said Jason Cline, general manager of OpenDoor Houston. “We buy homes between $100,000 and $500,000 and we’re everywhere from Galveston to Sugar Land up to parts of Conroe.”
Houston is Zillow Offers' first Texas market to launch, but the company is also planning to begin operations in Dallas this year.
“Texas is home to some of the largest and most vibrant housing markets in the country, and we're thrilled to bring Zillow Offers to Houston today,” Zillow President Jeremy Wacksman, said in an announcement Monday.
The company said it will pay commissions to real estate agents that have listings on houses it is offered and those who represent buyers of its properties. It will also provide agent leads to sellers that its decline offers.
OpenDoor also pays commission to agents, though the company’s smartphone app allows shoppers to visit a house for sale without an agent.
“We feel the way we’re different is we keep the customer in the forefront,” Cline said. “It’s about the customer, and empowering them.”