Zillow Offers Expands, Hiring More
As more buyers are looking online for their next home, popular sites like Redfin and Zillow are taking it one step further. As mentioned previously, Redfin relaunched their online buy now program on their site. This may have been in response to the battle for online real estate market audience with Zillow. Similar to Redfin’s program, Zillow was the first to promote and even successfully buy and sell homes through their online iBuyers market. Zillow Offers is now expanding into four more cities and accounts for nearly half of Zillow’s profits in the second quarter.
Zillow Offers is the same idea and process of Redfin Now. Sellers can avoid the uncertainty of the real estate market and the hassle of selling. Once a homeowner makes an inquiry and provides some basic information about the home, Zillow has a local agent conduct an analysis on the home in order to receive a cash offer. If the homeowner likes the offer, they can accept and choose their closing date.
Initially launched in April 2018 in Phoenix, Zillow Offers is now operating in 15 cities nationwide. Cities include Nashville, Houston, Portland, Charlotte, Atlanta, and Dallas. Coincidentally, Redfin Now also operates in Phoenix and Atlanta. In a short 16 months, Zillow Offers grew rapidly and plans to continue expanding – already planning to operate in Tucson, Oklahoma City, Jacksonville, and Cincinnati. By next year, they plan to have a total of 26 cities in their repertoire.
Despite Zillow’s loss in the second quarter, Zillow Offers did better than originally planned. It accounts for 40% of Zillow’s net profits. Its expansion also means a hiring spree in the cities they will be launching. Hundreds of new jobs will be available.
However, many analysts aren’t convinced Zillow will be able to continue to turn a profit. Zillow hopes to purchase about 5,000 homes per month, which is only 1% of the monthly transactions. Analysts are focusing on the numbers and knowing that the sector that Zillow Offers is part of, in the greater umbrella of Zillow Group, is still reporting a loss. Still, Zillow remains optimistic. Only time will tell if either of these iBuyer markets will set foot in Seattle.