HOUSINGNEWS REPORT
THE OFF-MARKET HOUSING MARKET
Those billions of dollars are attractive to disrupters looking for ways to make the process more efficient by lowering gross costs to consumers or raising incomes for brokers and salespeople. And now the nascent success of iBuyers in some local markets has drawn industry giant Zillow — which a decade ago entered the real estate marketplace as a disrupter — into the fray. Zillow Jumps on iBuyer Bandwagon In May Zillow announced that it would begin “testing the Zillow Instant Offers™ marketplace, a way for homeowners to sell their homes quickly by providing them with offers from investors and a comparative market analysis (CMA) from a local real estate agent, as an estimate for what the home might fetch on the open market. In addition to investors being required to use an agent, should a homeowner select an investor’s offer, Zillow will also offer to connect them with a local agent to represent them throughout the transaction.” The Motely Fool explains the program this way: “The buyer makes an all- cash offer for the property, allowing the homeowner to sell without the hassle of putting the home on the market. As a result, Realtors are up in arms that the homeowner can complete the transaction with or without their services.” Not everyone is happy with Instant Offers. StopZillow has alleged that “Instant Offers is designed to attract sellers before they call you. Zillow will
then try to influence those sellers to list with a Zillow agent… instead of you.”
“We’re not seeing it hardly at all, because most of the sellers realize they want to maximize the rate of the return … that offer is not going to come from an iBuyer who is looking for a discounted purchase,” said Mahon, adding that pocket listings oftentimes offer the happy medium for high- end sellers. “In the luxury market, for instance, we have some sellers that don’t want it listed on the MLS. … They want private channels in marketing the home. If the seller wants maximum exposure, then yeah put it on the MLS.” MLS Taking Notice The growing number of acquisitions by iBuyers like Opendoor and Offerpad are catching the attention of the Arizona Regional MLS, which in its August STAT report devoted three pages of commentary to an analysis of off-MLS sales in the market, including those by iBuyers.
For its part, NAR explains that it “cannot sponsor or encourage a boycott of Zillow. It would be unlawful for NAR to discourage members from using any product or service provider. Those decisions are made independently by MLSs, brokers, and agents.” Will the Instant Offers plan offend large real estate licensees to the point where they cut back their ad buys? Or, will licensees stick with Zillow? As The Motely Fool asks, “is Zillow about to disrupt the residential real estate industry and put over 70 percent of its ad revenue at risk?” Mahon, with First Team Real Estate in Southern California, doesn’t see the iBuyers as an immediate threat to his market, which tends to skew higher end.
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OCTOBER 2017 | ATTOM DATA SOLUTIONS
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