Author: Eric Block

Zillow gets broker’s license in Arizona, but has ‘no plans’ to represent homebuyers and sellers

The Arizona Department of Real Estate is requiring the license so the Seattle tech giant can keep operating its Zillow Offers homebuying and selling service in the state.

Zillow is getting a broker’s license in Arizona, but it has no plans to begin hiring real estate agents anytime soon, and it will continue to rely on other brokerages to represent it as it wades further into homebuying and selling transactions, according to Errol Samuelson, the chief industry development officer at Zillow Group.

Samuelson made the comments in an interview with Inman on Monday, regarding Zillow’s just-announced acquisition of Mortgage Lenders of America, a mortgage lender that will help Zillow expand beyond its initial informational and home search purposes and provide home searchers with more services to convert them into homebuyers, directly on Zillow’s popular namesake website.


The Arizona Department of Real Estate (ADRE) contacted Zillow in April 2018 when it first launched Zillow Offers,the company’s direct-to-consumer homebuying and selling platform, in the state. The ADRE said that Zillow needed to be licensed as a broker in the state to operate the program, according to Samuelson. The agency administers broker’s licenses for two-year-periods.


“We came back to them and explained — and they understand — that we are not the broker of record when we do these deals,” Samuelson said. “We use local third-party brokerages to represent us when we buy, we use local third-party brokerages when we sell.”


Despite the explanation, ADRE said it felt it was necessary for Zillow to get the license, so the Seattle-based company complied, Samuelson said.

“It’s not going to change anything about the way we operate the Zillow Offers program,” Samuelson said. “We’re still going to keep using local agents and brokers representing us as the brokers of record. We’re still going to use our representatives to list our properties.”

“We’re not going to have Zillow employees listing properties, we’re not going to have Zillow employees representing buyers and sellers,” Samuelson added. “This is strictly about getting paperwork in place.”

Zillow has actually held broker’s licenses in the past, Samuelson confirmed. When it acquired Trulia and RealEstate.com, those acquisitions came with licenses, and when the company first started, it had some licenses. Over the years, Zillow let those lapse. The company is licensed as a brokerage in Texasand perhaps other states, Zillow spokesperson Kate Downen told Inman via emai. Inman has asked where else the Zillow is licensed as a brokerage and why the company is licensed in Texas and will update this story when we hear back.

“Zillow has had broker’s licenses off and on over the course of 11 years and it hasn’t really changed our perspective in that — we don’t have any plans to become a brokerage in the sense of representing buyers, representing sellers, having agents that list,” Samuelson said.

“As we expand Zillow Offers expands, if Zillow needs to gets licensed in other states, it will comply on a case-by-case basis,” he added.

Zillow just sent the ADRE its letter letting the state agency know the company is complying today and Zillow is not sure how long the licensing process will take, Downen said.

Asked what exactly Zillow Offers is doing that Arizona says requires Zillow to get a real estate license and what policy or law the state agency cited that compelled Zillow to become licensed, Zillow declined to comment.


“The laws about this are really broad. They’ve asked that we get a license, and we’re complying,” Downen said.


Read the full article here

The Cost of Selling Without a Real Estate Agent

You’ve heard of buyer’s remorse; but without your market expertise and sales skills to back them up, sellers who choose to sell their home on their own just may experience “seller’s regret” when they see how much less they get for their properties. FSBOs earn an average of $60,000 to $90,000 less on the sale of their home than sellers who work with a real estate agent, according to the National Association of REALTORS®. Here’s the breakdown:

  • All agent-assisted homes: $250,000 (median selling price)
  • All FSBO homes: $190,000
  • FSBO homes when buyer knew seller: $160,300

With this kind of discrepancy, why would any seller choose to go it alone? Some may want to avoid paying an agent’s commission—but even factoring that in, FSBOs still stand to make less on their home sale. “Talk to an agent and find out what they suggest for the commission, and then do the math yourself,” researchers write on NAR’s Economists’ Outlook blog. “The closing price for the agent-assisted seller is likely going to be way above a FSBO. [But] in reality, homes sold by the owner make less money overall.”

Homeowners seem to be hearing the message: Only 8 percent of sellers last year—an all-time low—chose to sell their home themselves, according to NAR’s 2017 Profile of Home Buyers and Sellers. That figure has been falling since 2004, when 14 percent of homeowners sold their own homes.

Of the share of FSBOs last year, 38 percent of the homes were sold to a buyer that the seller knew, such as a friend, neighbor, or family member. The majority of FSBO transactions, however, were sold to buyers the owner did not know.


Read the full article here

The Real Reason Your Client’s Offer Was Rejected

So, your clients fell in love with a home and made an offer that they felt was a very good one. Now they want to know why it was rejected. It’s not always cut-and-dried, but realtor.com® recently featured some of the reasons sellers don’t accept certain offers, including some surprising logic.


The buyers revealed too much.

Personal letters have become a popular strategy that some real estate professionals recommend, but it’s important to ensure the letter doesn’t hurt your clients’ chances. “When the bids are very close, things like a personal offer letter can either help or hurt, depending on what it says,” Andrea Gordon, a real estate agent with Red Oak Realty in Oakland, Calif., told realtor.com®. “In one case, the buyer went on and on about the huge remodel he would do when he owned the house. But this was a slap in the face to my sellers, who had spent a considerable amount of money in the past five years remodeling the property.” Make sure your clients don’t unintentionally insult the sellers or their personal tastes in trying to convince them to take their offer.


The offer was too high.

Sellers may want to bypass those offers that seem too good to be true because they could be an appraisal nightmare. “I had a listing in a very sought-after neighborhood, and we immediately received two offers over list price,” says Gail Romansky at Pearson Smith Realty in Ashburn, Va. Romansky says the first offer was $15,000 over the list price and the second one was $40,000 above asking. “While the latter higher offer was tempting to take, I explained that the house was not likely to appraise for this higher amount, which meant the loan might not close,” Romansky told her clients. “So we went with the lower offer of the two.”


Buyers nickel-and-dime everywhere else.

The full-price offer may be enticing to the seller but the request for, say, $10,000 in closing costs may sour them on it. Tracey Hampson, a real estate professional with Realty One Group in Valencia, Calif., says buyers making attractive offers should avoid feeling like they have the right to collect elsewhere in the transaction.


The financial picture raises questions.

Of course, sellers want to feel assured that the buyer can actually complete the transaction. “I had a buyer who made an offer on a house, but they came in with a low down payment, a very high debt-to-income ratio, and a subpar credit rating,” says Kevin Deselms at RE/MAX Alliance in Golden, Colo. “This spooked the seller because it called into question the buyer’s ability to get their loan funded and close the transaction.”