If there was anyone left who still had doubt whether Zillow has the killer instinct, let this be the final piece of evidence to convince you.
Today they launched ‘Instant Offers’ which allows homeowners to submit a request for 15 investors to bid on their house.
Zillow thinks that if they encourage sellers to hire an agent, it will be enough to appease their big-money-spending Premier Agents, because sellers will also have the option to engage with an agent regarding their home’s value.
But there is recent evidence to know how effective that program will be.
Zillow rolled out their big Seller Leads program at the last Premier Agent conference that we attended in Las Vegas last year. We signed up for the 6-month program, figuring if it does catch fire, we’d want to be involved!
During our paid six months, we got one listing in Spring Valley.
Our advertising with them has been so ineffective that we quit all Zillow advertising this month. Our listings will still be prominently displayed, but you won’t see me being part of the three-headed monster on the right-side of the listings in Encinitas and Carlsbad.
They have a good shtick, but in reality, the Zillow advertising being sold to agents works most effectively in the lower-end areas, where buyers and sellers aren’t connected to several agents already.
The Instant Offers program is likely to find a similar fate.
Zillow is attempting to capitalize the Open Door model, which has 200 employees operating in the Phoenix and Dallas markets, and has raised $320 million in venture capital. Zillow probably feels the pressure, and figured they have to do something to compete with Open Door.
As we saw with Tom, not every homeowner is greedy. There are those who would rather cash out quick than navigate the path to a retail sale – heirs to the estate, long-time landlords, etc., who just want to get their money!
Things that are likely to happen with Zillow’s Instant Offers:
- The investors will hire great salespeople.
- Agents will attempt to game the system.
- Higher-end sellers will hesitate.
If the investors have great salespeople who convince sellers that their discount is worth the fast money, the program might work – whether the buyer is Open Door, Zillow, or Tom T!