Zillow offers los angeles

Zillow offers los angeles DEFAULT

Two months after launching its direct home buying and selling operation in the Inland Empire, Zillow said Thursday, May 9, it will expand Zillow Offers into Los Angeles, Orange and San Diego counties within a year.

The announcement was made simultaneously with an earnings report showing the company’s iBuyer division almost doubled the number of homes purchased in the first three months of and nearly tripled the number it later resold.

In addition, Zillow Offers plans to expand to Sacramento, San Antonio and Tampa.

Together with previously announced expansions in five other metro areas, the company expects to be buying homes in 20 markets by the end of March

Zillow Offers is one of at least five iBuyers operating in Southern California since the start of

iBuyers are real estate’s answer to the on-demand economy, making home sales almost as easy as Uber makes hailing a ride.

Homeowners fill out online questionnaires, usually getting cash offers within days. iBuyers use market data and algorithms like Zillow&#;s Zestimates to determine their offer price. After buying a home, they make repairs and relist it for sale within weeks.

Experts say iBuyers are banking on consumers accepting a discounted price in exchange for the convenience of selling to an online buyer. Sellers avoid the hassle of home showings and open houses and can time the closing to coincide with the purchase of a new home.

iBuyers maintain their prices often are competitive with the traditional sales process once the costs of marketing, staging and repairs are taken into account.

Zillow, the nation’s leading real estate website, has launched an aggressive effort to transform itself by entering the business of real estate transactions, mortgages and other related services. Company officials said they expect Zillow Offers to generate $20 billion a year in revenue within three to five years. That would be 15 times more than the $ billion in total revenue Zillow generated in

Earnings results released Thursday showed Zillow Offers purchased homes during the first quarter, 80% more than in the fourth quarter of The company reported it sold homes in the first quarter, nearly triple the fourth-quarter total.

Zillow Offers now receives an offer request every two minutes, compared with one every five minutes at the end of That’s significant since the company also makes money off its referral business, referring “motivated sellers” who fail to sell to Zillow to its Premier Agent network. Zillow collects a portion of commissions those agents earn from subsequent sales.

“It’s clear people want a simpler, easier and less stressful way to buy and sell homes,” Zillow Brand President Jeremy Wacksman said in a company release. “To meet the needs of today’s on-demand consumers, Zillow is rewiring real estate to create a seamless and integrated transaction experience. We’re rapidly innovating on a number of services that span the entire transaction, including Zillow Offers, mortgages through our affiliate lender Zillow Home Loans, and the ability to tour and unlock Zillow-owned homes on any schedule.”

Zillow Offers is available in Phoenix, Las Vegas, Atlanta, Denver, Charlotte, Raleigh, Houston, Dallas and portions of the Inland Empire. The company previously announced plans to launch in Miami, Minneapolis-Saint Paul, Nashville, Orlando and Portland, Oregon, by next year.

The online company, which relies heavily on selling advertising to real estate agents, uses local brokers in its transactions. While Zillow pays a commission on each sale, it has declined to say how much commission it pays.

Related links

Sours: https://www.ocregister.com/zillow-offers-announces-plans-to-expand-ibuying-in-l-a-orange-counties

Homeowners in Los Angeles, Orange counties can sell their home directly to Zillow

Selling your home can sometimes prove to be a nightmare. Now, residents in Los Angeles and Orange counties have the option to sell their homes directly to Zillow.

Interested sellers can go to Zillow Offers and get a cash offer which the real estate company said eliminates the "hassle" of going the traditional route and listing a home for sale.

Once homeowners enter their address and answer a few questions about their property, within 48 hours, they can receive a "fair market value offer" from Zillow and pick a closing date, the company said.

When Laguna Woods resident Donna Kish was selling her Riverside County home, she said it was exhausting to think about especially with up to $35, in estimated repairs.

"We didn't want to deal with contractors, hiring contractors, having them traipse through the home, tear it apart. We did not want people traipsing through our home with real estate agents," Kish said.

She and her husband decided to try out Zillow Offers. They filled out an online form, Zillow came for a walk through of the property, and within 48 hours, they were given a cash offer.

"It was seamless, comfortable. I didn't stress one bit," Kish said.

Kish didn't have to deal with repairs, an open house, and got to choose her closing date. They paid six to nine percent in fees for the transaction, and felt it was fair.

"You might think that it's a millennial thing, but it's not. The consumer is demanding ease and simplicity and it's pretty consistent across the board," said Suzanne Seini with Active Realty, a company working with Zillow in Orange and Riverside counties.

"It's very, very simple. Mainly done over the phone, the consumer doesn't have to go out of their way to meet with anyone if they don't want to," said Seini.

This is why traditional real estate agents aren't on board. Rob Pocock with TMG Real Estate Consultants still believes in the realtor relationship.

"For the easiness and convenience, there's a cost to that. As the consumer, if you're OK paying that additional cost, then that might be the way to go, but if you're trying to net the most money for your property, you need a traditional real estate agent," said Pocock.

According to an analysis by Zillow, sellers who declined an offer and decided to sell traditionally sold their homes for an average of % more than Zillow's offer.

The company also said it will take care of necessary repairs to the home after closing a sale. Zillow also gets 7% of the selling price.

Zillow Offers has been available in Riverside County since the beginning of the year and is expected to expand to other locations across the country by the middle of
Sours: https://abc7.com/zillow-offers-selling-your-home-sale//
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Home shoppers in Los Angeles may soon have some competition from one of the nation’s largest online real estate databases.

Zillow announced plans Thursday to expand its growing Zillow Offers program into six new cities, including Los Angeles.

Through the program, homeowners can sell properties directly to Zillow, rather than listing them on the traditional real estate market. The company pays cash and will then fix up the property and quickly list it for sale, using its own website to advertise the home.

Zillow Offers is one of several instant buyer platforms launched in recent years by tech companies like Redfin and Opendoor. The concept is similar to traditional house-flipping, but at a scale that few individual investors could match.

According to a press release from Zillow, the company receives requests for cash offers “every two minutes” through the program, which launched last year and is only available in nine cities so far. Zillow also announced plans earlier this year to eventually buy and sell 5, homes per month in the cities where the program is available.

Los Angeles is the largest real estate market the company has announced plans to move into so far.

Dana Cuff, professor of architecture and urban planning at UCLA, tells Curbed that the program could be attractive to sellers willing to make do with what’s likely to be a lowball offer from the company in exchange for a less stressful sale process.

But Cuff argues that the flipping process can artificially inflate the value of homes because investors are likely to skimp on costs when fixing up properties.

“We already have a housing crisis on our hands,” she says. “This is not going to make that better. It treats housing only as an investment.”

Zillow spokesperson Matt Kreamer disagrees.

“If anything it will make the market more stable,” he writes in an email. The program, he argues, “allows people to sell (and buy) more easily, and creates a more reliable equilibrium.”

Kreamer says homes sold through Zillow Offers will also be “turnkey,” making them more attractive to potential buyers.

Cuff says the Los Angeles area is already awash in speculators doing that work, and that those in the market for a home may be better off purchasing from a local seller.

“I think it’s a buyer beware circumstance because it’s a large corporation running it,” she says. “It’s all remote. There’s no human there.”

Sours: https://la.curbed.com//5/9//zillow-offers-ibuyer-house-flipping

Zillow stops buying homes, citing the coronavirus

Zillow will temporarily stop buying homes through its Zillow Offers arm in response to local public health orders intended to prevent the spread of the coronavirus and a desire to preserve cash, the real estate company said Monday.

The Seattle company had been buying homes directly from sellers in 24 U.S. markets, including the Los Angeles metropolitan area, Orange County, the Inland Empire and San Diego.

Sellers pay a slightly higher fee to Zillow than they would to a typical real estate agent. In exchange, sellers can choose the closing date, and Zillow is responsible for repairing, staging and reselling the home.

During the last three months of , Zillow sold 1, homes and purchased 1, It ended the year with 2, homes in inventory across the nation, the company said Monday. By Thursday, Zillow had sold about of those homes. The company declined to break out Southern California figures.

Zillow has spent the better part of two years transforming itself from an online marketing company into one that also acquires homes directly from sellers, makes minor repairs and resells the properties.

The new strategy required a massive investment — Zillow lost an average of about $6, on each of the hundreds of homes it sold in last year’s fourth quarter. The company is also carrying $ billion of long-term debt, according to its annual report. But investors rewarded the company’s progress: Its stock price reached an all-time high in February after the company’s latest earnings report.

Zillow isn’t the only company to suspend its direct buyer program. Last week, real estate firm Redfin said it, too, would pause home buying through its RedfinNow arm. The company buys homes in the Los Angeles area, Orange County, Ventura County, the Inland Empire and San Diego, as well as other markets.

“With whole cities shutting down nearly all commerce [to slow the spread of the coronavirus], no one can say what a fair price is right now, so we’re not making any instant offers” to buy homes, Redfin said in a statement.

Because many aspects of a typical real estate transaction can be completed without in-person contact, the California Assn. of Realtors says home sales can continue under the state’s stay-at-home order. But it recommends that its members stop in-person marketing or sales activities, such as open houses and property inspections, to keep in line with the new rules.

Zillow works in multiple states, though, and some counties in California have put forth their own stay-at-home rules. Chief Executive Richard Barton said the complexities were one reason for suspending purchases.

It “became increasingly difficult to navigate the local ordinances while trying to ensure the safety of our team, our customers and our partners,” Barton told investors in a conference call Monday.

He said the company would resume buying homes once the coronavirus outbreak stabilizes and “we feel the housing market is functioning.”

As recently as last month, the real estate industry was largely still preparing for a busy The market, juiced by a combination of cheap money and a steady economy, was heating up after a prolonged slowdown. Though the virus was here, it had caused no known deaths in California, and officials hadn’t yet imposed major social distancing measures.

Now, things have changed. Real estate agents have canceled open houses, opting for virtual tours instead. Some agents are reporting canceled deals and price cuts.

Zillow’s decision to pause home buying doesn’t necessarily signal a larger trend in the market, though, because the company is not a major player, said Richard Green, director of the USC Lusk Center for Real Estate.

However, the company’s business model depends on buying and selling houses quickly and at a higher profit, which doesn’t work well when prices are expected to fall over the next few months.

The overall effect of the coronavirus on the housing market isn’t yet clear. Real estate experts say the damage will depend on how long the virus lingers and how many jobs it erases.

If the economic fallout is like it was during the Spanish flu pandemic, a recession could last seven months, Green said.

“If this looks like what we had years ago in terms of how quickly we recovered, no, I don’t think it will have a long-term effect,” he said. But it depends on how long a recession lasts — “and none of us really knows that.”

Bloomberg was used in compiling this report.

Sours: https://www.latimes.com/business/story//zillow-offers-halts-home-buying-coronavirus

Los zillow angeles offers

Zillow launches its high-stakes home-flipping business in LA

Zillow President Jeremy Wacksman

When Zillow Group pivoted from an advertising-based business model to algorithm-based home-flipping in , its executives knew this day would come.

Zillow and other tech-driven companies were able to refine their technology enough to make tiny profits on cookie-cutter houses in deserts and small metropolitan areas.

But to make $20 billion a year in revenue from Zillow Offers within five years as executives boldly projected, Zillow would need to crack major coastal markets, where homes are at least twice as expensive, and prices can change dramatically from one block to the next. To not do iBuying would represent an “existential threat” to the $ billion company, CEO Rich Barton said in October.

On Monday, Zillow announced that it would make its biggest play yet, launching an iBuying business in Los Angeles with field staff and two veteran brokers.

In L.A., Zillow plans to hire a significantly larger staff to accommodate the growth — more than double the size of any of the other 21 markets where it already operates, including San Diego, Sacramento, Houston, San Antonio, and Atlanta. Traditionally, it has hired a dozen staffers in local markets, but in L.A. it will hire about 24, though much depends on consumer demand, Zillow president Jeremy Wacksman told The Real Deal.

The company also will establish two offices to cover the city, including one in highly urbanized Irvine in Orange County to the south, according to Wacksman.

“L.A. is easily the biggest and most complex market that we are going into,” said Wacksman. “It is not a market, but a whole bunch of markets. Of the ones that we’ve opened in, it’s the biggest geographically, population and the average home price.”

The iBuying model offers sellers a chance to quickly offload their property, giving them fast access to cash to buy other homes. It’s a business with extremely thin margins, and requires Zillow to set aside large pools of money to make the purchases, perform simple updates to the property, and sell it again, with the ultimate goal of financing the buyer’s purchase through its new mortgage arm.

Zillow lost an average of $4, on each home sale in the third quarter, after interest expenses — up from $2, in the second quarter, the company revealed last month. Still, Zillow does make money on the transaction fee, which runs between 6 and 9 percent. And that’s the focus.

“We’re looking to move it as quickly as possible and earn our money off the transaction fee,” Barton said last month. “And ultimately because this transaction sits at the nexus of all of these adjacent markets that we know so well, that are big businesses in and of itself, they’re dying to be integrated into one thing.”

For Zillow, the L.A. launch will be a defining test on how far its Zestimate technology has come, and whether it can gain an edge in higher-stakes markets.

The median home price in L.A. for October was $,, where homes sat on the market for an average 47 days, two days longer than a year ago, according to the nonprofit listing service, California Real Estate Technology Services. That’s more than double what Zillow averaged in terms of gross revenue of $, per home sold. Some observers believe that the metric is expected to grow now that it has entered Southern California in a big way.

The region is so gargantuan, according to Wacksman, that Zillow plans to open one office in Glendale and the other in Irvine, to handle newly hired field staff who will fan out across the region to snap photos of homes, and generally kick the tires to see what’s under the hood before Zillow makes an offer.

JohnHart Real Estate's John J. Maseredjian and Active Realty's Suzanne Seini

Zillow Offers also has brought on two broker partners to help: John Maseredjian, vice president of JohnHart Real Estate, who will run Zillow Offers in Los Angeles; and Suzanne Seini, partner and chief operating officer with Active Realty, who is leading the Orange County expansion.

The plans to scale are daunting.

“To be honest, it’s an unknown, given that this is a considerably larger market than all others, Maseredjian said. “All we have are these submarkets and neighborhoods with different nuances. It’ll be interesting. We are prepared for everything.”

Zillow is initially targeting certain zip codes and neighborhoods in San Gabriel Valley, Pasadena, Monrovia, Glendale, Burbank, parts of Hollywood, Long Beach, Culver City and West Hollywood, according to Wacksman.

Wacksman declined to state how much capital Zillow has set aside for its L.A. operations. However, Zillow secured an additional $ million undrawn credit line in October, bringing its total credit capacity to $ billion to support its Zillow Offers business, he said. Its total liquidity with cash and other investments is double that amount.

“We are comfortable that we have the equity and debt to handle all of this,” said Wacksman, of its L.A. gambit.

Still, its iBuying business has struggled to become profitable, as it juggles big changes to its business model, using advertising sales from its online marketing business Premier Agent — which has been in L.A. for a decade — to fund its push into buying and selling homes. Last month, the company said it sold 1, of the 2, homes bought in the third quarter, generating $ million, up from just $11 million in the same period last year.

The rapid growth of Zillow Offers has come with mounting losses. The company reported a net loss of $65 million, with the results weighed down by the new business, which has bought and sold more than $ million in total home sales since its inception.

Wacksman declined to say when Zillow Offers might hit break-even.

Zillow is still casting an eye over its shoulder on its iBuying rivals. That includes the likes of virtual brokerage eXp Realty, Redfin, Realogy and Keller Williams and Softbank-backed Opendoor, which just last month opened its first L.A. office in Silver Lake. The Wall Street Journal reported that OpenDoor would spend up to $, for a home in L.A., and Redfin would pay up to $,

Zillow Offers also plans to open in Cincinnati; Jacksonville, Florida; Oklahoma City and Tucson, Arizona, by mid

Sours: https://therealdeal.com/la//12/09/zillow-launches-its-high-stakes-home-flipping-business-in-la/
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