33,000 sign petition opposing Zillow Instant Offers
09 Jul 2017
Zillow’s Instant Offers program, which allows prospective home sellers to receive instant offers on their homes, has been controversial with real estate professionals from the get-go. Now a large group of real estate agents from across the country have signed an online petition opposing Instant Offers.
Greg Hague, a lawyer and real estate broker in Arizona, organized the petition, which is directed at the National Association of Realtors and now has more than 33,000 real estate agent signatures.
Hague’s concern: Instant Offers minimizes the need for realtors and will “sucker home sellers into making a mistake that is going to cost them an education for their kids, an amazing family vacation or just sleeping better at night, because they have more money in their bank accounts,” Hague told the Orlando Sentinel.
Sellers may sacrifice sales profits in order to receive an instant, but highly discounted price under pressure from investors, Hague added.
Zillow is testing Instant Offers in two locations: Orlando and Las Vegas. Zillow hasn’t said anything yet about how Instant Offers has performed, or whether there are plans to expand beyond the two trial cities.
There has been a houseful of speculation about why Zillow launched the program – the AIM Group’s Mike DelPrete looked at several potential models and concluded that Zillow doesn’t want to disrupt the industry – 70 percent of its revenue comes from agents – but sees an opportunity to expand its existing lead marketplace and to make more money from seller leads.
Zillow may be also looking to capitalize on the success (at least in terms of financing) of competitor Opendoor which has raised $300 million U.S. for a model that promises quick, hassle-free cash sales.
Hague’s petition – which you can find at StopZillow.com – asks the National Associations of Realtors to intervene with Zillow. A NAR spokesperson responded that, while Instant Offers had “created a stir,” NAR could not “sponsor or encourage a boycott of Zillow,” adding that such an action would be unlawful.
Not everyone is up in arms over Instant Offers. One Realtor interviewed by the Sentinel said that he “personally would rather have more opportunities to connect with people. Without Instant Offers, there may be people out there I would never get to talk with.”
Hague disagrees. “The real estate industry has been Zillow’s biggest supporter,” he said in a release. “For the company to now take bread off the table of these professionals is an unconscionable knife in the back, as well as an equity grab from the homeowners we serve.”
It’s bad for consumers too, he adds. “My concern is that homeowners will unknowingly transfer tens of thousands of dollars of equity into the hands of profit-driven investors who don’t care about them.”
Will a petition stop Zillow? Unlikely. Lack of sales or success could still make this test just that. We’ll have to wait and see.