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To Sell or Not To Sell? The Debate About Working with Zillow and Other iBuyers

In many major Real Estate markets across the country, iBuyer companies are becoming increasingly more popular. Companies like OpenDoor, OfferPad, and of course – Zillow – have shaken up traditional Real Estate and the options presented to home sellers. More recently, Zillow has taken it a step further by offering Zillow Offers™, a self-proclaimed “no-obligation offer with no staging, no hidden fees, and no surprises.”

What is Zillow Offers™?

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To apply for an instant offer from Zillow Offers™, you simply go to their website, complete an application about your home to check eligibility. Then you just wait for a Zillow advisor to contact you within three days. They will look at the price of comparable homes in your neighborhood, make you an offer, schedule an inspection, and buy your house from you. Simple as that!

But if it’s that simple, why is there even a debate?

Although the process sounds easy, many people don’t realize that the original offer is often reduced because of needed repairs or renovations. Therefore, the seller is promised a price and then beat up during the inspection period without anyone representing the seller’s best interest – such as a Real Estate agent.

So, let’s break down the advantages and disadvantages of working with an iBuyer.

Working with iBuyers such as Zillow is advantageous if you need to sell your home quickly and want a more convenient process.

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Advantages of Working with an iBuyer

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Quick Turnaround Time:

Say the seller needs to sell quickly, then iBuyers are a great option to the seller because many of them can close in as little as ten days.


Most of the process is done without the seller ever having to leave the house. There is no need to have to get their home ready to sell or spend time showing potential buyers their home. Plus they get to choose the closing date that works best for them.

An As-Is Sale:

No repairs or renovations are required when working with iBuyers. However, what seems like a convenient and easy solution, also masks some serious drawbacks. Sellers should keep in mind that instant home purchase offers are not designed to benefit the seller, they are designed to benefit the investor. Which is why there are several disadvantages to consider before working with an iBuyer.

Disadvantages of Working with an iBuyer

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High Transaction Fees:

What a lot of homesellers don’t realize is that you’re not avoiding fees just because you’re not using an agent. In most cases, sellers end up paying more fees than if you had a Real Estate agent representing you. Homesellers should think about fees this way: would you rather pay an agent who represents your interests or a company that represents itself? Zillow Offers™ fees are 6% for the selling costs and additional 1 – 3.7% in “Zillow Service Fee.”

That is much higher than the cost of closing and commission for a traditional real estate sale. The highest agent commission structure in the U.S. is 6% (split between the buyer’s and seller’s agents).

Lower Profit:

The big downside of iBuying is that all of the convenience comes at a price. Selling to an iBuyer often means you make less money on your sale than through the traditional route. Zillow and iBuyers use the strategy of offering below market value, to then turn around and sell it and make a bigger profit. Like any business, iBuyers need to make a profit.

As a result, people who sell their home to an iBuyer often end up paying for that convenience, netting less money themselves. You are basically selling your home for a discount, which is not ideal in a current seller’s market. In a downturn market, you’d expect to see investors swooping in with low offers. But in the current housing market, there’s little need for sellers to accept less than what their home is worth.

No Representation:

Transactions with iBuyers are ultimately designed to benefit the investor. Home sellers are left without representation of someone looking out for their best interests. In a traditional home sale, a good Real Estate agent has your back. They can sell your home quickly for the best negotiated price, without any extra hidden fees.

When an agent sells a home, it’s a mutually beneficial transaction. The agent gets a fee or commission, and sellers get the best possible price for their home.

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Should You Use a Real Estate iBuyer?

With the pros and cons on the table, it’s time to get back to the original question: to sell or not to sell to an iBuyer?

Well, it depends on what is most important to you! If convenience and certainty are what you’re looking for, then iBuying is a viable option. However, if profit is your chief priority, a traditional home sale using a licensed Real Estate agent is your best bet. At the very least, sellers should do their research and get a Comparable Market Analysis from a licensed Real Estate agent before considering an instant offer. Real Estate agents offer free, no-obligation home evaluations. Know your options and make an informed decision!

About Lauren Rosin

Lauren Rosin

Lauren Rosin holds a Masters in Real Estate Development from the W.P. Carey School of Business – and almost two decades of real-world experience in one of the nation’s most competitive Real Estate Markets. In addition to buying and selling Real Estate for her clients, Lauren actively does so for herself, therefore she knows the market inside and out.

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