Buying a new car and selling your old car has a certain simplicity when you’re trading it in. Drive into the dealer’s parking lot in your old vehicle and you can drive right out in a new one. Zillow’s ambitious Zillow Offers program seeks to make the process of selling your old home and buying a new one that simple.
The Current Home Buying Process
Typically, there’s a lot of stress and risk involved in selling your current home and purchasing a new one. Most homeowner’s top concern is that they’ll find their new home well before they sell their own. Carrying two mortgages is financially challenging and could incentivize homeowners to sell their current home for less than it’s worth, which loses them even more money.
Another concern with new-build homes is that construction will be delayed, while their current house is close to a sale, or even sold. This could leave homeowners in a precarious condition while they wait for their new home to be completed. No one wants to move twice, but in this situation, you don’t have much of a choice.
That is, unless you’re willing to cancel your purchase. Cancellation rates on new builds are, according to John Burns Real Estate Consulting, at an average of 16%. Builders are therefore also motivated to find solutions for homeowners who are trying to smoothly transition between their old home and a new one.
The Zillow Offers program will allow homeowners who are buying a new-build home to sell their house to Zillow, with a huge and flexible closing time. According to Market Watch, it could be anywhere from seven days to eight months. For this privilege, Zillow Offers will charge more than a typical real estate agent’s commission of 6%, to 7.5% on average, including a service fee and estimated repair and closing costs.
This service is only available where Zillow Offers operates, in eight cities such as Dallas, Phoenix and Atlanta. However, the program is going to be expanded into 26 total cities by 2020.
That’s not to say that this program is necessarily the best bet for a strapped homeowner. Similar firms that buy homes, like Offerpad and Opendoor, have been criticized for charging homeowners too much or giving them below market-value offers. HooQuest argues that these “iBuyers” will cost you $5,000-$7,000 dollars. Is that worth the security they offer?
Get a Simpler, More Secure Closing with Lakeside Title Company
If you’re purchasing a new build home and selling your old home, there are other ways to get more security and simplicity in the process. Lakeside Title Company offers buyers and sellers a smooth real estate transaction. We review your title and ensure that there are no hidden title issues or defects.