Zillow makes move into the local market, seeking homes to buy

Hey, San Antonians: Zillow wants to buy your house.

The Seattle-based real estate company, which rolled out its Zillow Offers program in San Antonio this week, said the market is “a dynamic, desirable area.”

More than half the traffic to San Antonio home listings on its website comes from outside the area, the company said. Meanwhile, among San Antonians shopping for homes, 61 percent of page views are for homes for sale in the area.

Zillow is among an increasing number of algorithm-driven firms reshaping the residential real estate industry. Homeowners provide information about their homes online, and companies such as Zillow, Offerpad, Opendoor and Redfin use data to figure out the value and make an offer in as little as 48 hours.

The companies, known as “instant buyers” or “iBuyers,” then spruce it up and sell it. Compared with the usual 6 percent commission, iBuyers generally charge 7 to 10 percent. Zillow’s average fee was 7.5 percent in the second quarter, spokesperson Jordyn Lee said.

The firms are selling convenience: Homeowners can avoid a stressful and pricey listing process, skip repairs and choose a closing date quickly, they say.

“It’s a streamlined process,” said Levi Rodgers, a San Antonio broker representing Zillow in each transaction. “Someone comes in and takes away all the stresses of a sale. That’s attractive to the consumer.”

But some real estate agents say people may not get top dollar

for their homes if they sell to an iBuyer.

“Convenience costs money,” Grant Lopez, chairman of the San Antonio Board of Realtors, said in a recent interview.

San Antonio may be appealing to companies using algorithms to assess home values because it’s a fairly homogeneous market, said Michael Amezquita, chief appraiser of the Bexar Appraisal District.

Companies such as Zillow aren’t the only ones using such techniques to determine home value, he noted. Some appraisal districts also use it, and federal regulators recently expanded the pool of homes that can be bought and sold without a licensed appraiser, bumping the threshold from $250,000 to $400,000.

But there’s a “human knowledge” element that’s lost when looking at reams of data — appraisal staff know an area and its nuances, Amezquita said. Streets and neighborhood that are next to each other may differ broadly, he said.

While iBuyer transactions make up a small slice of home sales, the companies are selling more properties and rapidly moving into new markets. Opendoor launched in San Antonio last year, followed by Offerpad in March and RedfinNow earlier this month.

Traditional firms are also jumping in. Keller Williams announced in April it would partner with Offerpad to expand iBuyer sales.