Every red-blooded American is familiar with Zillow, the home buying, selling, renting, leasing, and/or ogling-mansions-for-fun website. It can be an extremely helpful resource when looking for a new pad in particular. But with the recent addition of “Zillow offers” — available in 25 U.S. markets including Cincinnati as of late March 2021 — more sellers are asking what exactly is going on with these Zillow instant offers. How does it work? Can you get a good deal through the program? What fees does Zillow offer charge? These are important questions, so let’s dive into each one.
How Does Zillow Offers Work?
Zillow Offers is simply the direct buying arm of the Zillow internet empire. If you’re wondering what direct home buying is, the very basic answer is that direct buying is when a company buys your house from you without a realtor or real estate agent.
But not all direct buyers operate exactly the same. On one hand, you have reputable home buyers and those who will pay all of your costs, bring in a third-party title company, and generally make sure you’re apprised throughout the whole process. We might call these “all-inclusive home buyers.” On the other end of the spectrum, there are outright scammers, many of whom will put up those tacky signs you see on the sides of streets and near highways.
While we really don’t recommend doing business with companies who put up home buying signs, it’s probably true that not every single person who puts up a street sign is going to scam you out of your money. Likewise, not every “reputable” is also going to cover your costs or treat you right.
It’s in that middle ground that Zillow Offers seems to be operating. They may be a reputable company, but they’re also a very large one. Zillow instant offers may sound great, but you have to factor in a couple of things.
- A Zillow Cash Offer may not give you the most competitive price.
- You’re going to get hit with some fees.
What Fees Does Zillow Offer Charge?
A Zillow cash offer may be instant, but it isn’t free. You’ll pay fees before the process is over. Now, these are mostly all fees you’re going to pay if you sell through a real estate agent too, but you actually could avoid them by finding a direct buyer that doesn’t charge them. They do still exist! But more on that later. Say you trust Zillow and you really want to go with them. I get that. So are those fees worth it? Let’s take a look at what exactly they are so you can make an informed decision.
Average Ohio closing costs in 2021 are expected to run around 2-3% of your home sale price. That’s not nothing! Again, you’ll pay this in the majority of selling scenarios, but not all. Just be aware of what that percentage will mean for your bottom line before signing anything with Zillow.
Yup. Zillow Offers make you pay selling costs, unfortunately.
If there’s anything wrong with your home, a Zillow cash offer will not help to cover those costs. This may not be a big deal if your home is in great shape and market-ready, but some pre-sale home renovation costs get insanely pricey.
Honestly, this one is a little frustrating. They say on their website that there isn’t a charge to get your Zillow cash offer, but admit that there are “fees associate with the offer.” While making sellers pay repair costs, selling costs, and closing costs is pretty standard fare for a lot of direct buyers (we cover ’em for you at UHS though… wink, wink), the high service charge that Zillow Offers reportedly charges is a bit of a slap in the face to home sellers. It kind of feels like you’re made to pay for the name at that point.
Can I Really Get a Good Deal By Letting Zillow Buy My House?
Maybe. Here’s how I see it from my vantage point: Zillow Offers straddles a line in the home buying world. They probably won’t be your best option when it comes to direct home buyers unless you legitimately cannot find anyone trustworthy to give you a cash offer and cover all of your fees. On the other side of things, Zillow Offers also isn’t set up to get you more money than a traditional listing will (although they do claim willingness to work with your real estate agent should you want to use one). It’s a hybrid, quick-sale machine with the built-in, socially perceived trust of a massive corporation. But they make you pay a bit for that safety net.
So Zillow Offers seems to function as a reasonably safe bet; one that is as unlikely to knock your socks off as it is to leave you feeling abjectly cheated.
If you need a fair, cash offer in Central Ohio, give us a call at Upward Homes. We won’t run you through a bunch of hoops or tack on any hidden fees. We’re a husband and wife renovation team that has been working to revitalize Columbus area neighborhoods for over 15 years, and we truly care about finding win-win home sale solutions.
Have you received a Zillow instant offer or even sold? We’d love to hear about your experience.
As always, please let us know if you have any questions about your selling options.