Online property giant Zillow has launched a new service in the Twin Cities where it will make an offer to buy homes directly from sellers.
Zillow on Monday made Minneapolis-St. Paul the 10th metro area in the country where it operates Zillow Offers, a service where it buys homes, prepares them for showings, and then lists them for sale.
The service is designed to give homeowners more flexibility when they want to close on their house sale, as well not having to worry about getting their property prepped for a showing.
Zillow makes a "free, no-obligation cash offer," with the seller picking a closing date once they accept.
Zillow says that for each home it buys and sells, it will use a local real estate agent and broker, who will receive a commission on the sale. Sellers can pick their own realtor to act as an agent.
The company charges a variable realtor fee that sellers have to pay, which in other markets has averaged out to around 7 percent of the value of the home being sold.
This would make it more expensive than using a regular realtor, with Realtor.com noting that listing agents typically charge around 6 percent.
It's also more expensive than listing and selling through a rival website like Redfin, which charges around 4.5 percent in total commission upon a sale.
But Zillow is gambling that the added convenience of being able to dictate when you sell your home will prove an attractive prospect to some homeowners in the metro.
"It’s clear sellers are looking for a simpler, less-stressful way to sell their home – with over 100,000 homeowners having requested an offer from us since we launched a year ago," said Zillow Brand President Jeremy Wacksman.
"Zillow Offers gives homeowners an unprecedented level of control and convenience when selling, helping them move more seamlessly onto the next stage of their life."
Not just content with buying homes from sellers, Zillow is also making Zillow Home Loans available in the Twin Cities, allowing homeowners who sell to Zillow get pre-approved for a mortgage as they move up the ladder.
Since it first launched last year, Zillow Offers says it receives a request to buy a home every two minutes, representing some $200 million in transaction value per day, according to the Austin Business Journals.
It remains to be seen how successful it is in the Twin Cities, where housing supply is tight and most sellers don't usually have any problems finding buyers.
Nonetheless, we reported earlier this year that while houses in and around the $300,000 mark are being snapped up almost immediately – sometimes above asking price – there remains lower demand for houses in the $500,000-plus range.