A row of colorful, well maintained homes, with green grass in the foreground, and a crystal clear blue sky above.

You could sell your home without ever having to put a For Sale sign in the front yard. (Getty Images)

In April, real estate information company Zillow announced it would begin testing the direct purchase and sale of homes. The move is a new feature of Zillow’s Instant Offers program, which helps connect homeowners with real estate investors willing to purchase their property with cash and skip the process of preparing a home for the market and listing with an agent.

Starting in the Phoenix and Las Vegas markets, the first venture into the direct purchase and sale of real estate expands Zillow’s reach when it comes to being a part of the transaction process (Orlando, Florida, is also testing Instant Offers, but not direct purchase). Now, not only can Zillow help market a property and help people find a real estate agent, but the company is also connecting sellers with buyers directly and even becoming a player in the transaction.

But Zillow isn’t the only real estate site getting into the direct purchase and sale of houses. National brokerage Redfin has also been dipping its toes into the role of real estate investor with Redfin Now, currently purchasing homes in the San Diego and Inland Empire markets in Southern California. And other online real estate companies like OfferPad have built their businesses around the model of direct purchase from the buyer.

[Read: Why You Should Sell Your Home in 2018.]

For Redfin and Zillow, the relationship with homebuyers and sellers is changing. They’re no longer serving only as a source of information or as your agent; they're now becoming the individual on the opposite side of the deal as well. And with the goal of investing in a home for profit in mind, a deal directly with a major real estate site can be a risk for both sides, like any investor transaction.

“Real estate companies have rarely smoked their own dope – it’s one thing to say we have an algorithm to tell you how much your home is worth. It’s another thing to buy the home based on that algorithm,” says Glenn Kelman, CEO of Redfin.

Before you opt for an expedited home sale, however, it’s important to understand when it is and isn’t in your best interest.

Sitting at the Other Side of the Table

Kelman says a major concern of delving into real estate investment is the potential to change the relationship between the company and consumer. “We’re being careful because we want to make sure we’re always on the consumer’s side,” he says.

To avoid appearing as competition in the eyes of consumers looking to gain from the sale of their home, both Zillow and Redfin seem to be treading carefully with their purchases, trying not to scam sellers while also avoiding bad investments for themselves.

To do this, the Redfin Now program connects interested homeowners with a Redfin agent at the same time the company appraises the property. Similarly, Zillow Instant Offers connects inquiring homeowners with local real estate agents to determine the difference in sale price should they choose to list with an agent instead of the fast-track sale option. Homeowners can inquire about the program, or they may be contacted if they've expressed interest in selling and their home appears to fall in the midlevel value range. At that point, Redfin will send a professional to appraise the property and put together a report. Additionally, a Redfin agent will weigh in on the possible profits from a market sale so the homeowner can compare the two options for selling.

“That choice and that transparency has been really appealing to a lot of consumers,” says Jeremy Wacksman, chief marketing officer for Zillow.

For Mark Stark, CEO of Berkshire Hathaway HomeServices for Arizona, California and Nevada properties, providing multiple options for the homeowner is a key part of moving toward the best possible transaction for both sides. Berkshire Hathaway HomeServices is part of the Zillow experiment, with some experienced sales executives providing their insight and services should the homeowner find listing the property a better scenario.

“When people focus solely on discounts for the consumer, they’re basically trying to speak for the consumer instead of asking the question of what’s most important to you,” Stark says.

[See: The 25 Best Places to Live in the U.S. in 2018.]

When the Market’s Right

The relationship between real estate sites and the consumer isn’t the only factor to consider, but you must also take into account if the market allows for both parties to see a solid profit at the same time. In tight seller’s markets – currently the case for many parts of the U.S. – real estate investors don’t see as much of a profit because they have to purchase the property for more to begin with.

“We’re trying to buy these homes as close to market value as possible,” Wacksman says. “It’s really about if you don’t want to go through the prep work and the process yourself.”

Because there’s often little room for error to profit, both Wacksman and Kelman note direct purchase is still in the testing phase, with Zillow and Redfin trying to determine if they are able to provide the option of a quick cash sale to consumers and still profit.



“Is every city in America open to this model? We’re not sure, because … we’ve discovered that higher-price coastal cities are pricing houses above where institutional purchase makes sense,” Kelman says.

Stark expects platforms like Zillow Instant Offers to be able to take on the cyclical nature of real estate markets, both on a local and national level. “Once they get down the process, they can take that process virtually anywhere, and it can get a colder, warmer, medium scenario based on the market they’re in,” he says. Zillow's direct purchase of property is only part of the Instant Offers program, which is in itself a smaller part of the overall Zillow platform. As a result, Zillow can afford to make an offer only when it appears to be a solid investment, and such investments may be more lucrative in different parts of the country at different times due to the cyclical nature of real estate.

[Read: The Homebuying Strategy You Haven't Heard Of: Going Off-Market.]

You can never go wrong exploring all your options for selling your home, including investor offers – whether that’s from a local company or a major real estate site. Here are four scenarios when you may want to consider selling your home to an investor directly without marketing it first.

You’re in a time crunch. You may be relocating to another part of the country or across the globe, or debts may have piled up. If your ability to relax financially hinges on selling your current home and being able to move on, the slight decrease in sale price may be worth selling to an investor.

You can’t buy a new house until you sell. When the market is particularly tight and homes on the market are few and far between, offloading your current house first can make buying a little less stressful. When you’ve already liquidated your biggest asset, you can make an offer faster and with fewer contingencies, which can help beat out competing buyers for your next house.

You can’t make updates to your house. Especially if you’ve lived in your house for a long time – we’re talking decades – there’s a good chance some updating is in order to get the maximum price when you sell. But that’s not always possible when that updating includes gutting the kitchen and landscaping the yard. If the difference between an investor’s offer and the price an agent plans to list the house for doesn’t bother you, there’s no need to for the extra stress.

Your market’s low on buyers. If you live in a part of the country where the seller’s market seems to have passed, selling to an investor may be the best option for you. Especially if your home fits in your market's mid-to-low price range, an investor’s purchase may be worth more than the higher price you’ll get only after your house sits on the market for six months. Always factor in what your time and effort is worth compared to the difference in prices.


10 Secrets to Selling Your Home Faster

Time your listing for a fast sale.

For sale sign with sold sticker in front of a new modern house. Front door is visible. Copy space

(Getty Images)

Selling your home quickly not only allows you to move on with your life, it also means fewer days of keeping your home in pristine condition and leaving every time your agent brings prospective buyers for a tour. Real estate information company Zillow crunched data from 2008 to 2016 and found the optimum time to list a home for sale was on a Saturday between May 1 and 15 – at least looking at national numbers. Homes listed during those times sold nine days faster and for 0.8 percent more than the average annual home price, according to Zillow’s analysis. In more moderate climates, the optimum time came in March or April.

Timing isn't everything when selling your home.

Timing isn't everything when selling your home.

House on the corner

(Getty Images)

As you list your home, remember those numbers are historical averages and this spring may be different. "With 3 percent fewer homes on the market than last year, 2017 is shaping up to be another competitive buying season," Zillow chief economist Svenja Gudell said in a news release. "Many homebuyers who started looking for homes in the early spring will still be searching for their dream home months later." But how fast your home actually sells, and at what price, depends on a lot more factors than when you list it. A National Association of Realtors survey published late last year found that the average home was on the market a month in 2016, down from 11 weeks in 2012.

Here are 10 secrets to selling your home faster, no matter when you list it.

Take great photos.

Take great photos.

Close-up of a man photographing with a camera

(Getty Images)

According to an NAR survey, 51 percent of homebuyers found the house they eventually bought online and 95 percent used the internet in their home search. If your listing photos don’t show off the features of your home, prospective buyers may reject it without even taking a tour or going to the open house. Hiring a professional photographer and posting at least 30 photos of your home, inside and out, is a good way to attract a buyer.

Clean everything.

Clean everything.

Not prepared to miss a spot!

(People Images/ Getty Images)

Nothing turns off buyers like a dirty house. Hire a company to deep clean if you can’t do it yourself. That includes washing windows inside and out, removing any clutter and cleaning the garage, basement, baseboards, ceilings and closets – and anywhere else the buyer can see.

Depersonalize the home.

Depersonalize the home.

Modern living room

(Getty Images)

Remove all your family photos and memorabilia. You want buyers to see the house as a home for their family, not yours. Remove political and religious items, your children’s artwork (and everything else) from the refrigerator and anything that marks the house as your territory rather than neutral territory.

Let the light in.

Let the light in.

Sunlight through a bedroom window.

(Getty Images)

People love light and bright, and the best way to show off your house is to let the sunshine in. Open all the curtains, blinds and shades, and turn lights on in any dark rooms. If your house is on a lockbox and your real estate agent isn’t going to be there to open blinds and turn on lights before showings, leave everything open when you leave for work every morning.

Make your home available.

Make your home available.

Woman realtor talking to a young family

(Getty Images)

Buyers like to see homes on their schedule, which often means evenings and weekends. Plus, they want to be able to tour a home soon after they find it online, especially in a hot market where they're competing with other buyers. If your home can be shown with little or no notice, more prospective buyers will see it. If you require 24 hours’ notice, they are likely to see and perhaps choose others homes first.

Set the right price.

Set the right price.

House with for sale sign in yard and open wooden fence

(Getty Images)

No seller wants to leave money on the table, but the strategy of setting an unrealistically high price with the idea you can come down later doesn’t work in real estate. Buyers and their agents have access to more information than ever, and they know what most homes are worth before viewing them. A home that’s overpriced tends to stay on the market longer, even after the price is cut, because buyers think there must be something wrong with it. Set the right price from the beginning, otherwise you might cost yourself precious time and money.

Remove excess furniture and clutter.

Remove excess furniture and clutter.

Self storage units

(Getty Images)

Nothing makes a home seem smaller than too much big furniture. Rent a PODS self-storage container or a storage unit and remove as much furniture as you can. It will immediately make your home seem calmer and larger. Remove knickknacks from all surfaces, pack them away and store the pieces upon which you displayed them. Take a minimalist approach to books, CDs, throw rugs and draperies, and clear off your kitchen and bathroom countertops, even appliances you normally use. If you can remove half the stuff in your closets, that’s even better, because it makes the home’s storage space look more ample.

Spread the word.

Spread the word.

African American neighbors greeting each other over fence

(Getty Images)

Your neighbors are often the best salespeople for your home because they love the neighborhood. Make sure they know your home is for sale and are invited to your open house. Share your listing on social media and ensure your agent does the same. Put flyers on neighborhood bulletin boards and share the news on neighborhood email lists and Facebook groups. If you have the skills, make a video to tell the story of how much you love the house and the neighborhood and put it up on YouTube.

Repaint in neutral colors.

Repaint in neutral colors.

Couple preparing to paint living room

(Getty Images)

A coat of paint will do wonders to freshen up your home, both inside and out. This is the time to paint over your daughter’s purple bedroom and cover up your red dining room accent wall. You want to create a neutral palette where buyers can envision putting their own personal touches. Warm neutrals such as gray, taupe and cream are better than bright white.

Spruce up the front of your home.

Spruce up the front of your home.

With white pillars, steps in the entry way

(Getty Images)

You’ve heard it 100 times before, and it’s still true: Curb appeal matters. You don’t get a second chance to make a first impression. A new or freshly painted front door, new house numbers and a new mailbox can breathe life into your entryway. Fresh landscaping and flowers in beds or in pots also enhance your home’s first impression. Trim trees and bushes, and pressure wash walkways, patios and decks. Leave the outdoor lights on, too, because prospective buyers may drive by at night.

Read More

Tags: real estate, housing market, home prices, home improvements, existing home sales, investing, pending home sales


Devon Thorsby is the Real Estate editor at U.S. News & World Report, where she writes consumer-focused articles about the homebuying and selling process, home improvement, tenant rights and the state of the housing market.

She has appeared in media interviews across the U.S. including National Public Radio, WTOP (Washington, D.C.) and KOH (Reno, Nevada) and various print publications, as well as having served on panels discussing real estate development, city planning policy and homebuilding.

Previously, she served as a researcher of commercial real estate transactions and information, and is currently a member of the National Association of Real Estate Editors. Thorsby studied Political Science at the University of Michigan, where she also served as a news reporter and editor for the student newspaper The Michigan Daily. Follow her on Twitter or write to her at dthorsby@usnews.com.

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