You may have heard Zillow will assist in buying and selling homes through the real estate agents on their platform. If you are considering making an offer on a home you saw on Zillow and want to know if they will consider a low offer, we can help you. That said, let's dive in!
Generally, Zillow does not accept the offers on any of the homes listed on their platform. The ability to accept or decline low offers rests with the seller and their agent.
Zillow has nothing to do with the transaction from that standpoint.
Now that we know that Zillow does not take any actual offers, we'll take a closer look at how Zillow works. You might also have questions about Zillow Offers or if you can trust Zillow estimates. For the answers to these questions and more, read ahead!
How Does Zillow Work?
Zillow is the leading online real estate marketplace, with more than 135 million properties listed at any time. This platform offers property owners a place to list for-sale-by-owner, landlords to post rental property, and consumers to view homes and other properties for sale in their desired area.
Zillow pulls for-sale information from various sources, which are searchable by the user.
The searches begin with a geographic area, and you can then narrow them down by property amenities, price range, and other variables.
Zillow, though a free service in many aspects, does charge fees so that it can generate operating revenue.
Rental properties are charged $9.99 per week, advertisers pay for ad space, and real estate agents can pay extra money for enhanced seller profiles.
These incomes result in Zillow generating more than $1 billion in revenue each year.
Does Zillow Negotiate For You?
Zillow will list your property for free (for sale) and for a small weekly fee (for rent). It also serves as a great starting point for homebuyers who want a detailed list of available properties in a specific area.
The company does not involve itself in purchasing or renting any property after that. They will not negotiate on your behalf as a buyer, seller, tenant, or landlord.
They encourage you to work with your attorney and real estate professionals throughout your buying/selling/leasing process.
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Is Zillow Offer A Good Deal?
Zillow Offers began in 2018 as a new program with a growing platform. This involved Zillow purchasing properties from their website, making improvements, and then relisting the property as their own.
The idea was to give homeowners a chance to sell their properties quickly while simultaneously providing a steady stream of revenue for Zillow.
Consumers complained that Zillow would buy properties at as much as 15% of what the seller could have received had they used a realtor.
News reports have charged that this strategy backfired on the company, which has not been able to offload the homes that they bought as quickly as they thought they could.
The Zillow Offers program was short-lived and was a financial disaster for the company. With a sound business plan and so much ambition, what happened?
What Happened To Zillow Offers?
Soon after the brand launched Zillow offers, Zillow discovered that it had too many houses that they were unable to sell.
With much of their once free capital now tied up in non-liquid assets, the company began listing the homes they purchased at prices far below what they had invested.
The process of "flipping" these homes backfired largely because Zillow overestimated the value of these homes after the owner completed the projects.
In 2019, Zillow halted Zillow Offers and laid off 25 percent of its workforce. This left $2.8 billion in real estate owned by Zillow on the market, most listed below what the company paid.
Experts estimated that Zillow lost nearly $900 million on this short-lived endeavor.
Can You Trust A Zillow Estimate?
If you've spent some time looking at homes on Zillow, you may have noticed the Zillow "Zestimate" underneath homes that are no longer on the market.
Maybe you've been curious about how much your home is worth and don't want to bother with an appraisal. Or perhaps you're just curious how much money your friend's or neighbor's houses would bring.
The Zillow Zestimate is merely an estimated market value of your home. This should not be taken as an accurate value of your property, as Zillow doesn't rely on all the hard data that an appraiser will use.
While Zillow can get within the ballpark of what a home is worth, there are reports of Zillow way overvaluing a property or being laughably below what the appraised value turned out to be.
The data that Zillow uses is based on the sales trends in the area, as well as the age, size, and amenities your house has.
There is no way of them knowing accurate remodeling information, and they do not possess the ability to run accurate comps as an appraiser would.
Does Zillow Manipulate The Housing Market?
The internet was buzzing with reports that Zillow was responsible for the surge in house prices in 2021, blaming the real estate platform for manipulating the housing market.
These tales appeared everywhere, from viral Tik-Tok videos to blogs from consumer attorneys. But do these accusations carry any weight?
The professionals and experts weighed in on this dialogue. The most notorious viral Tik-Tok video charged that Zillow was underbuying some homes and overpaying for others in the same area.
According to the accusation, this deliberately drove up comps for the homes they were trying to sell.
Spokespersons for Redfin, one of the companies blamed alongside Zillow, stated that overpaying for any home would not be a sustainable business model and that the claims were categorically false.
Additionally, MSN points out that the rise in housing prices has nothing to do with either Zillow or Redfin and that a shortage of more than 5 million homes in the United States is the driving force behind home prices rapidly rising.
Is It Okay To Make A Lowball Offer On A Home?
You might be tempted to offer an amount far under the asking price. Maybe you think the property is grossly overvalued. Or perhaps you know the seller is desperate and wants to get the property as cheaply as possible.
Though not a practice you should engage in during every scenario, you can lowball successfully under certain circumstances. Homes that the owner lists repeatedly could get hit by a lowball offer, according to Realtor.
They also state that homes in great need of updating/remodeling should be considered for a lowball offer. And if your gut (and your agent) tells you that the house is severely overpriced, go for it.
But a lowball offer will almost certainly backfire if all things are market value. Use common sense and sound discretion. And trust the guidance and advice of your real estate professional.
To Wrap It All Up
Zillow does not engage in the buying or selling process of property to the point that they accept offers or negotiate.
This company briefly bought and flipped homes but halted this practice as it was a financial disaster for Zillow. Experts in the industry have debunked accusations that Zillow has manipulated the housing market.
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