Zillow Group, the most regularly visited real estate website in the US with almost 40m monthly visits, plans to start buying houses directly from sellers to test its ability to make money by flipping real estate.
The listings-website is building on a program called Zillow Instant Offers, in which sellers upload information about their homes and receive offers from local investors within 48 hours. The sellers also get an assessment of the home’s market value from an agent allowing them to choose between choosing a quick sale and selling their property the traditional way.
Now, Zillow is going to start playing the role of investor, bidding on homes in Las Vegas and Phoenix using cash from its balance sheet to finance acquisitions. The firm has described the new program as a test, projecting the company will own 300 to 1,000 homes by the end of this year.
Unlike traditional home-flippers who bet they can make money on home appreciation, Zillow plans to profit by charging sellers a fee in addition to agent commissions. Zillow joins a field of companies in the US that are using tech platforms to make fast decisions to buy homes. Opendoor and OfferPad have similar business models.