Zillow Group will start buying and selling homes for the first time later this month, expanding its real estate business and creating new competition for real estate agents and companies like Opendoor and OfferPad.
Starting in the Phoenix and Las Vegas markets, Zillow announced today that it will partner with local brokerages and agents to buy and sell homes. Homeowners in Phoenix and Las Vegas will be able receive an offer directly from Zillow, which will get the home ready to list on the open market and sell it with a local brokerage. The homes will be listed in the local MLS and on Zillow.
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This is an expansion of Zillow’s Instant Offers program, which launched last year and connects homeowners to offers from investors, as well as a comparative market analysis from a local real estate agent. Instant Offers launched this past May in Las Vegas and Orlando, Fla.; it will expand to Phoenix later this month.
Zillow said the new business is a way to provide more options to sellers. The company has hired former Invitation Homes executive Arik Prawer to oversee the program.
“Even in today’s hot market, many sellers are stressed and searching for a more seamless way to sell their homes,” Zillow Chief Marketing Officer Jeremy Wacksman said in a statement. “They want help, and while most prefer to sell their home on the open market with an agent, some value convenience and time over price. This expansion of Instant Offers, and Zillow’s entrance into the marketplace, will help us better serve both types of consumers as well as provide an opportunity for Premier Agents to connect with sellers. This is expected to be a vibrant line of business for us and for our partners in the real estate industry, while providing homeowners with more choices and information.”
Companies like Opendoor and OfferPad — which partnered with Zillow for Instant Offers last year — offer a similar service. Fellow Seattle real estate giant Redfin has RedfinNow, which launched last year and lets the online real estate brokerage buy homes directly from customers.
Update: Here’s a statement from Opendoor CEO Eric Wu:
“Welcome, Zillow. Seriously. We are genuinely excited, having invented this new category in 2014, and it’s invigorating to see a host of others in the industry recognize the importance of removing hassle and time from the transaction. We are excited to have serviced over 15,000 customers, to be expanding to dozens of markets, and to be reaching market share numbers that demonstrate the significant demand and love for our experience and product. We continue to be focused on building technology to remove friction from the transaction through a world-class pricing model, a suite of vertically integrated applications, All-Day Open Houses, our Buyer Guarantee, and a few new products we will be launching shortly. Most importantly, we are here to service our customers, buyers and sellers who crave and deserve a best-in-class experience as they transition from one home to their next.”
Speaking about Instant Offers last year, Zillow Group CEO Spencer Rascoff said the service was a way for listing agents to get leads.
“There are several startups and real estate brokerage websites experimenting in this space, but Zillow is the only one that has designed a product to keep the agent involved in every part of the transaction, most notably by giving them the opportunity to secure new listing agreements,” Rascoff said. “Ultimately, Zillow Instant Offers has the potential to deliver the highest intent, highest quality listing leads at scale to our Premier Agents.”
Rascoff has shifted his rhetoric about Zillow over the years as the business expands. Speaking on Bloomberg TV in 2013 about competition from Redfin and others, Rascoff said “we sell ads, not houses,” and repeated that again in 2015.
Excited to announce our newest business segment, an expansion of @zillow Instant Offers. Big things ahead. #MoveFastThinkBig #ZGLife https://t.co/H1GgbUucps
— Spencer Rascoff (@spencerrascoff) April 12, 2018
Zillow Group topped $1 billion in revenue for the first time in 2017. The company makes a majority of its revenue from advertising.