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Zillow Will Make Cash Offers Based on Its Estimates

Company expands 'Zillow Offers' program
By John Johnson,  Newser Staff
Posted Feb 25, 2021 1:21 PM CST

(Newser) – Zillow doesn't just want to provide an estimate of your home's worth—it wants to actually buy the place, too. The company is expanding a test program it calls Zillow Offers to more parts of the country, reports CNN Business. Under the program, prospective sellers would receive a cash offer from the company based on its "Zestimate" of the property's worth. The pitch is that the process takes the hassle out of selling, with COO Jeremy Wacksman using the phrase "one-click nirvana." While it would eliminate the typical 6% commission to real estate agents, Zillow charges its own fee of about 7.5% on average, according to CNN. For now, the program covers more than 500,000 properties in more than 20 markets from Florida to California. (The list can be found here.)

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As Bloomberg notes, the company's "Zestimates" have had a shaky history since their rollout in 2006. But while they could be notoriously inaccurate in past years, Zillow says they are now off by only 2% or so, sometimes less depending on market variables. Before the final sale, Zillow would send someone to inspect the home, assess needed repairs, and adjust the final price. Another company, Opendoor, already offers this type of online buying, though a post at Seeking Alpha thinks there is room in the market for both. It ticks off selling hassles such as haggling and showings, and adds, "Online buying and selling cannot fix all this, but it can create a much better experience." Bloomberg adds that Zillow aims to profit through the strategy based on scale—small margins on high volumes. (Read more Zillow stories.)

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