“Will Zillow buy my house instantly?” is a common question as the real estate game changes. As of today, the answer is yes, in 24 cities. On March 23, Zillow paused all instant buying (aka iBuying) in response to market risk and COVID safety concerns. They’ve been incrementally resuming, with the last 4 cities resuming today. Below are all cities where Zillow will buy your home instantly, fees for instant vs. traditional home selling, and how COVID has changed our views on “home.”
WILL ZILLOW BUY MY HOUSE INSTANTLY?
Yes, Zillow (or other iBuyers like Opendoor) will buy your home instantly.
The primary benefits are speed, certainty, and convenience. But you might pay a bit more for these advantages.
Instant buying, aka iBuying, is surprisingly simple. You fill out a quick form, they send you an offer, and you can close within days.
No open houses, no fixing up the place, and no moving your stuff out so a realtor can “stage” your home with cooler furniture.
Rough cost to list and sell your home using a realtor is about 5-6% of sale price as realtor commission, plus costs of repairs and staging.
Rough cost to sell your home directly to an iBuyer is about 7% of sale price.
Each home seller’s situation is different, but if your place needs work or you’re in a hurry, the total costs of selling to an iBuyer can compare competitively to a traditional listing.
When costs are comparable, it starts to sound pretty good to close right away using an instant offer.
The part I like about how the iBuyer model has evolved is there’s minimal downside to explore it.
Why? Because if you don’t like initial offers from iBuyers like Zillow and Opendoor, they’ll connect you with a local agent to list your home the traditional way.
Here’s Opendoor explaining that concept.
As for Zillow, I believe their financials reveal their motivations — while iBuying is a growing business for Zillow, they still generate about $1 billion per year in revenue by selling leads to real estate agents.
So iBuying has turned into a great way to generate interest from sellers like you. Then if you don’t like an iBuyer’s offer, they’ll charge a local agent to connect with you to list your home.
That’s no skin off your back. You achieve your endgame either way. And you find out up front if the instant sale is worth it before you go the listing route.
IN WHAT CITIES WILL ZILLOW BUY MY HOUSE?
Zillow will buy your home instantly in these 24 cities. Note that real estate and finance types also refer to these “cities” as regions, markets, or metropolitan statistical areas (MSAs):
– Colorado Springs
– Fort Collins
– Las Vegas
– Los Angeles
– San Antonio
– San Diego
– South Florida
– Tampa Bay
Here’s a twitter thread I’ve been updating since Zillow first shut down iBuying. It shows the dates and press releases as Zillow resumed iBuying in each of the cities listed above.
Zillow restarts home buying (aka iBuying) in 4 more markets: Las Vegas, Houston, South Florida, Tampa Bay
Zillow stopped all iBuying 3/23 and is now buying homes again in all 24 markets they were doing before. Other cities in thread. Here's today's link https://t.co/why3hPHNyh
— Julian Hebron (@TheBasisPoint) August 5, 2020
And if you really want to understand whether iBuying is here to stay, here’s a piece you’ll like. In it (my column for real estate trade publication HousingWire), I detail the endgame for iBuyers, real estate brokers, and lead providers. Spoiler alert: they all share the same endgame.
WHY DID ZILLOW & OTHER iBUYERS STOP BUYING HOMES WHEN COVID HIT?
Zillow stopped buying homes instantly through their Zillow Instant Offers program on March 23, 2020. Other iBuyers stopped around the same time. They said it was because of COVID health risks, which is partly true.
The other reason they all paused was to manage company risk and navigate frozen financial markets.
It requires a ton of cash to instantly buy homes in bulk, and iBuyers didn’t want to burn cash when COVID froze markets in March and April. Nobody knew then if home prices would plummet like they did before and after the 2008 crisis.
But iBuying resumed as financial and housing markets have proven resilient in recent months.
And Zillow did a particularly good job on COVID health and safety protocols for iBuying.
COVID MAKES ‘HOME’ MORE IMPORTANT THAN EVER
To close, here are two important notes on how COVID has changed what we think home is and should be.
First, I’m finishing this post at my dining room table before my wife and kid prep a quick family lunch break. And I know I’m not alone.
Millions of us are at home for most of life and work right now.
And a recent Zillow survey recently says 75% of remote workers would like this to continue at least half time.
I’m definitely one of those 75%. I love my family’s workday lunch breaks!
Also the survey said that of this group, 66% of us would move if we could work at home, and that one-third of us would move for a home office, larger home, or more rooms.
Second, I think Zillow’s CEO put it well in this quote from 1Q earnings in May:
COVID has indeed changed what home is and needs to be.
Good luck with your home selling (plus buying, improving, financing!) adventures in this crazy new world.
Please reach out if you have questions, and I’m placing more related reading below.