As we enter November, I always try to take some time and reflect what I am thankful for. From a Real Estate perspective, this Thanksgiving season I am thankful that my clients and Colorado consumers have options when it comes to selling their home.
You may or may not know there is an emerging trend in Real Estate – instant offers. There are two companies that have recently entered the Colorado market providing instant offers: Zillow and Opendoor. This is not a new concept in Real Estate (ever seen those “We Buy Ugly Houses” signs?) but this new version is compelling given the companies entering the space. I predict we will soon see more Real Estate companies enter the Colorado market with an instant offer strategy.
There are lots of details, news, and reactions around instant offers, but I wanted to break down what they mean to you. I will focus on the Zillow model as 8z has a long running partnership with Zillow and was chosen as 1 of 3 brokerages in Colorado to help buyers and sellers in the program.
So, what does this new option of a Zillow offer look like? Let’s break it down…
What is a Zillow Offer and what is the process?
“Zillow Offers™ is a home-selling choice for homeowners who want a certain and predictable sale on their timeline. Homeowners can request a cash offer from Zillow by providing their address and answering some questions about their home. Zillow will review the home details and local market conditions, then respond to a homeowner’s request with a cash offer within a few days.
A few pieces of the process I want to highlight:
Not all homes will qualify for a Zillow offer. Zillow has certain criteria that must be met to make an offer. This doesn’t mean something is wrong with your home, it just means Zillow doesn’t see it as a good fit for their program.
If Zillow does make an offer, do not be surprised if it is lower than the Zestimate for the home. The Zillow Offers algorithm accounts for different factors, including what repairs and renovations may be needed.
In general, if you accept a Zillow Offer you can close in as little as 7 days or as many as 90 days. This is flexible based on your needs.
Once Zillow buys a home and makes any needed repairs and renovations, they then list it for a higher price than they paid.
What are the pros of a Zillow Offer?
Convenience! The hassle of preparing your home, allowing showings and open houses, and negotiating can be nerve-wracking. By taking an instant offer you skip this process and get a guaranteed sale, which can be a huge benefit.
Also, the transaction happens on your timeline. Zillow is committed to giving a good consumer experience and a benefit of instant offers is the ability to choose your closing date and move when it’s convenient for you.
What are the cons of a Zillow Offer?
There is a great chance you are leaving money on the table if you take a Zillow Offer or any other instant offer.
In a traditional listing, all the work to get the home in perfect condition, maximize exposure to the open market, etc. is designed to get you the highest sales price. You take all the risk, so it makes sense that you get the most money possible when you list your home traditionally.
Instant offers still incur the normal fees of a Real Estate transaction, and in some cases more fees. The company you work with takes on all the risk of selling and that is factored into the offer they present to you. In other words, you’re paying a convenience fee.
Is an instant offer right for you? It depends on what is most important when it comes to selling your home. I think we can all agree it’s nice to have options.
You can trust when the time comes for you to decide how you are going to sell your home that I will be here for you. As your trusted Real Estate advisor, I am committed to clarifying all your options, and making sure you are confident in your choice when all is said and done.
I am thankful for the trust you put in me. I wish you and yours a great holiday season and Happy Thanksgiving!
A Refreshing Look at the Question “What is my House Worth?”
Let’s take a look at some of the stats for our area to get a better idea of what is going on in the local housing market!
In El Paso County for October 2018, the average sales price* was:
- $302,500 for Single Family Homes (up 7.3% from 1 year ago)
- $208,500 for Condos/Townhomes (up 6.9% from 1 year ago)
I have access to detailed stats across Colorado and can help you find out the worth of your property any time. I can also help you determine what your home is worth even if it’s in a different area. As always, I am here for you. If it’s time for you to buy or sell, let’s talk.
*Median sales price based on a six-month moving average