It was just announced that Zillow launched a pilot program called ‘Instant Offers’ for home sellers in Las Vegas and Orlando. This programs allows for investors to submit an all cash offer directly to the seller through Zillow’s platform without the need of a real estate agent. In an effort to save face with real estate agents, Zillow will have its participating Premier Agents submit a comparative market analysis with the investor’s offer so the seller can decide if they want to accept the offer and close quickly, accept the offer and have the transaction managed by a real estate agent or hire a local real estate agent to list and sell their property.
Zillow will not be charging for this service for obvious reasons. If they were to charge for this service, Nevada law would require Zillow to be licensed as a real estate broker due to the fact they would be receiving compensation for selling real estate.
Zillow acquired DotLoop, a real estate transaction system, back in 2015 and ‘Instant Offers’ will utilize Dotloop’s transaction system to streamline the real estate transaction. I know I, like many other real estate agents wondered why Zillow would acquire an online real estate transaction system when they claim their platform is designed to connect buyers and sellers with real estate agents.
If the pilot program, ‘Instant Offers’ is successful, what’s stopping Zillow from becoming a real estate brokerage and taking a percentage of each sale? This is why I believe it’s just a matter of time before Zillow attempts to replace the real estate agent based on the following facts:
- Zillow dominates the online market share with Zillow.com, Trulia.com and RealEstate.com
- Zillow is now testing ‘Instant Offers’ with 15 Investors
- ‘Instant Offers’ will be streamlined with the use of DotLoop’s real estate transaction system
- Zillow can provide the home seller with a Zestimate instead of a comparative market analysis from a real estate agent.
I’m not the only one that believes Zillow is trying to replace real estate agents, Ben Kinney stated the following:
Zillow launches instant offers to potential sellers eliminating the agent for a 9% fee. Selling the home off the market with out the full exposure and opportunity to get the highest and best offer for your home. If this isn’t one step closer to all my agent friends and their families losing their careers and jobs and my clients not getting fair market value I don’t know what is.
I’m hoping with Zillow’s ‘Instant Offers’ announcement, real estate agents will now see that paying Zillow for leads is allowing Zillow to grow their market share, finance acquisitions and the development of new technology that will ultimately lead to the real estate agent being replaced.