Zillow shut down its iBuyer service, Zillow Offers, in November 2021. Zillow Offers was formerly called Zillow Instant Offers. The program provided homeowners a fast, convenient, no-obligation cash offer, usually within two days.
Learn more about the Zillow Offers service, why it was shut down, and iBuyer alternatives you can use if you want a fast, all-cash offer for your home.
What was Zillow Instant Offers?
Zillow Instant Offers was the earlier name for Zillow Offers, Zillow’s iBuying program. Homeowners listing on Zillow could sell their home directly to Zillow for cash if their property qualified.
How it worked: Zillow made cash offers on homes, aiming for a fast and hassle-free sale. Zillow would provide home sellers with an initial cash offer within 48 hours, often based on the Zestimate. Interested sellers would schedule an in-person home inspection. Then, they’d receive a final cash offer that they could accept or decline with no penalty.
Zillow Offers allowed homeowners to sell fast and for all-cash, similar to other iBuyers like Offerpad and Opendoor. But Zillow Offers service fees were often higher, especially combined with potential repair costs.
Why did Zillow Instant Offers shut down?
On November 2, 2021, Zillow Group announced it was closing its iBuying service, Zillow Offers.[1] The company stated the model was flawed and, as a result, Zillow bought too many homes at too high a price.
According to the CEO, Richard Barton, difficulties in forecasting home prices was a major reason for shutting down their house-flipping service. Essentially, Zillow ended up with homes worth less than what the company paid for them.
Additionally, the big price swings in the real estate market would create more risk than return. Zillow estimated more than $500 million in losses related to flaws with the Zillow Offers program.
Why Zillow Offers wasn’t always a good deal
Zillow Offers wasn’t always a good deal for home sellers due to the program’s high fees. Additionally, offers were likely to be below fair-market value, which is common for iBuyers, which need to sell the property for more than they spent to buy it in order to make a profit.
Based on available data, Zillow’s service fees could vary anywhere from an average of 2.5% to 7.5%. That’s before adding in other expenses like closing costs, agent commission, and repair costs. Sellers working with an agent would still have to pay realtor fees.
| Fee | Zillow Offers | Listing on Open Market |
|---|---|---|
| Zillow service fees | 2.5-7.5% on average* | - |
| Agent commission fees | 0-3% | 5-6% |
| Selling costs | 6%** | - |
| Repairs | 1-2% | 1-2% |
| Closing costs | 1-2% | 1-2% |
| Total amount | 10.5-20.5% | 7-10% |
| * Zillow reported the service fee average as 2.5%,[2] but other sources quoted Zillow fees were 7.5% on average.[3] ** According to Zillow, the selling costs included the buyer’s agent commission. As of August 2024, as part of the NAR settlement, sellers are no longer required to pay buyer’s agent commission. | ||
Sellers wouldn’t know the exact amount they would pay in fees until they received a line-by-line breakdown after the home inspection was completed. While sellers could turn down the offer without penalty at that point, the process might dissuade them from pursuing other options, such as listing traditionally or with low-commission agents.
By contrast, many iBuyer competitors, like Opendoor and Offerpad, have a flat-fee service rate, making the service fee more predictable. Alternatively, sellers also can save on fees by going with a discount real estate broker and selling on the open market.
Customer reviews & complaints about Zillow Instant Offers
One drawback to Zillow Instant Offers was the limited verified customer reviews available on third-party websites. Available reviews typically focused on Zillow’s agents, website, or app, not Zillow Offers.
This made it challenging to understand past customer’s experiences with Zillow Offers. We were able to find a handful of examples of customers’ experiences on sites like Reddit.
Of reviews available, common complaints about Zillow Offers included:
- The initial offer was fair, but the offer dropped after the home inspection.
- Fees were high.
- Repair deductions seemed high.
- If you don’t accept the offer, you’ll likely be contacted by a Zillow agent about listing traditionally.
For example, one Reddit user reported the initial Zillow Offer was $450K with net proceeds of $395K, which seemed like a fair offer.[4] But, after the home inspection, the final offer was $420K with net proceeds of about $372K. They did not move forward with the program or with the Zillow agent that followed up about listing traditionally.
A review on BiggerPockets.com felt the final offer from Zillow ($30K less than the initial offer) seemed too low, especially since the price reduction didn’t match the cost of repairs.[5] The reviewer declined the Zillow final offer of $181K and sold with a realtor for $224K.
However, some reviewers had positive experiences. This Reddit user was happy with his experience, selling for a net profit of $397K.[6] He had only a 1% service fee, no repairs, and $1,480 in estimated closing costs. His initial and final offer was the same.
Another Reddit user was also pleased with the experience, even though they knew the initial offer of $870K was going to be too high. They felt they had a fair offer with a low 1% service fee. Here is a portion of the review (see link for full details).
Zillow Offers vs. iBuying alternatives
While Zillow Offers is no longer available, home sellers do have other viable iBuying alternatives to choose from.
Opendoor is one of the largest iBuyers, operating in over 50 markets across the U.S. Opendoor typically offers competitive pricing and lets you choose your closing date. Opendoor fees include a 5% service fee plus repair deductions and closing costs. Its purchase criteria can be stricter than traditional home flippers.
Offerpad operates in 23 U.S. markets and also has a 5% service fee plus repair deductions and closing costs. The company has flexible selling options and additional perks like free local moves. But it charges a 1% cancellation fee if the seller backs out after accepting the final offer.
Clever Offers is a free, no-obligation program that connects sellers with multiple cash buyers for better comparisons, so you can get the most out of your home sale. Clever Offers is available nationwide. While the program is free, there may be a direct fee to the company or seller you select.
Traditional real estate agents vs. iBuying: If you want to maximize your profit, consider selling on the open market with a realtor. You can go with a full-service low-commission real estate agent to save on fees. However, if you want a fast, all-cash option, an iBuyer may be a decent choice. Keep in mind that iBuyers typically offer below full-market value, and the fees can add up.
Can you still get a Zillow Instant Offer today?
Zillow no longer buys homes. However, Zillow has a partnership with Opendoor, allowing you to sell directly for an all-cash offer to Opendoor.
Homeowners on Zillow can request an instant cash offer from Opendoor. Sellers who choose the cash offer will then work with Opendoor.
If you want a fast, all-cash offer, consider comparing multiple cash offers before making a decision so you get the best price for your property. Clever Offers allows you to find and compare offers from cash buyers in your area, and you can get started by filling out a simple quiz.
Alternatives to selling to an iBuyer
You can sell quickly and conveniently without turning to an iBuyer. Some options include:
- Selling to local real estate investors
- Listing with a low-commission real estate agent
- Considering home trade-in programs like Homeward
If you want to maximize your profits, consider working with a low-commission real estate agent who specializes in fast sales. A local low-commission realtor provides full-services but at a reduced cost.
If you’re buying and selling, a home trade-in program, or Power Buyer, can help you buy before you sell so you’re not juggling two real estate transactions at once. You will have to pay fees for those services.
Final thoughts: Is selling for a Zillow Instant Offer (or an iBuyer) worth it?
Selling to an iBuyer may be worth it if you want to sell fast, need an offer from an all-cash home buyer, or want to avoid aspects of selling on the open market, like hosting showings or living through repairs.
However, this convenience comes at a cost. You’re more likely to get an offer that’s below fair-market value. Additionally, service fees combined with other common transaction fees like repair deductions and closing costs can add up. Further reducing your profits.
Before signing a contract, consider comparing multiple offers so you can select the deal that gives you the most flexibility and profit for your home. You can do this quickly, easily, and with no obligation with Clever Offers by filling out some basic information.
FAQ
No, Zillow Offers is not still available. But Zillow now partners with Opendoor. Homeowners on Zillow can request an all-cash offer from Opendoor through Zillow’s platform. Zillow will receive a referral fee if the sale goes through.
Selling your home to Zillow Instant Offers was straightforward. You would:
- Submit an online form providing key details about your home.
- Review the initial cash offer if you qualified.
- Complete an on-site home inspection.
- Review your revised and final cash offer to decide if you would accept it or decline without penalty.
- Schedule a closing date in as few as seven days or up to 90 if you signed the sale contract.
You could consider selling to a cash buyer or iBuyer, who may be able to close as quickly as seven days.
If you want a fast sale, Opendoor and Offerpad can be good alternatives to the now-closed Zillow Instant Offers. Both offer similar quick sales with a convenient process and a 5% service fee. Offerpad offers extra perks, such as free moves, while Opendoor is available in more states.