A newly launched Zillow feature called Instant Offers is causing concern with some agents who worry the company is pushing them out of the homeselling equation.
Instant Offers is a completely online approach to selling homes that has launched as a pilot program in Las Vegas and Orlando. Through the program, homeowners get all-cash offers from investors and receive comparative market analysis from a local real estate agent. Though they are not needed to list a house for sale, investors would be required to use an agent, and Zillow will also offer to connect the buyer with a local agent should they want to seriously consider any offers, the company said in a press release.
Instant Offers for an Instant World
“People today expect speed and convenience as the foundation for many of their transactions – including when buying or selling a home,” Zillow said in a release about Instant Offers. The company argues that Instant Offers gives sellers “additional control and certainty over aspects like closing date and price” during the home-selling process.
According to Zillow’s website, the program gives “sellers an opportunity to solicit offers from investors, an audience of buyers they may not have considered before, while connecting with an agent who can provide a CMA and real estate expertise.”
There’s just one catch: agents are not required during the process.
Agents’ potential lack of involvement upsets many in the real estate world — specifically those whose livelihoods are unconsidered in this model.
Backlash from Real Estate Community
In reaction to Instant Offers, Greg Hague, real estate attorney and Huffington Post writer, created StopZillow.com, where visitors can sign an online petition rejecting the program. According to the website, Hague intends to bring the petition to the attention of the National Association of Realtors (NAR).
Hague describes Instant Offers as “a costly, misleading program for the public and a stab in the back to Realtors who fund Zillow.” A self-proclaimed 50 year real estate veteran, Hague calls on those concerned to “draw a line in the sand” by signing the petition and potentially withholding “MLS IDX feeds and Realtor advertising” from Zillow.
The petition has more than 12,500 signatures since its May 31 conception. Its popularity prompted a response from NAR two days later condemning any boycotts.
“NAR cannot sponsor or encourage a boycott of Zillow. It would be unlawful for NAR to discourage members from using any product or service provider,” the post reads. “Likewise, it would be unlawful for local or state Realtor associations to encourage members to withhold listings or business from any third party, such as Zillow, or adopt policies that would preclude members from doing so.”
Zillow’s supposed lack of regard for real estate agents runs counter to what CEO Spencer Rascoff has stated in the past about Zillow’s business model, which relies heavily on revenue from real estate agents who purchase ad placements on the website. The statement reflects Zillow’s past intention to be a mediator in the real estate industry, but many real estate professionals are convinced Instant Offers turns the company into a home-selling trespasser.
Past Repeats Itself
The introduction of Instant Offers follows much criticism for another of Zillow’s tools; Zestimate. Buyers often consider Zestimate’s approximation as an appraisal— a much-contested issue, especially in Illinois courts. A Glenview lawsuit claims Zestimate offers unlicensed appraisals without sellers’ consent while another argues similarly that homebuyers understand Zestimates as appraisals despite not being so.
Peter Poulos, president of a Chicago-based real estate appraisal company called the Metron Group, confirms the Zestimate confusion is real.
“We get it all the time: Zillow says this is what my property is worth, so that’s what it’s worth,” Poulos said. “To the trained appraiser’s eye, we know that Zillow uses an algorithm to estimate the value of millions of properties, but to the consumer, it’s easy to mistake that for an appraisal.”