Seattle-based Zillow is getting into the home-flipping business.
The company on Thursday announced it will test a pilot program in which, in select markets, it will directly buy and sell homes for the first time.
Most people simply list their home and wait for the best offer. But Zillow is hoping people who don’t want to go through the expensive and time-consuming process will instead accept an “instant offer” from the company to purchase the home.
Zillow would then fix it up and get it ready to sell on the open market for a profit. It usually wouldn’t do drastic renovations, like you might see on an HGTV home-flipping show.
The program will start in Las Vegas and Phoenix within the next two months, and it’s unclear if it will ultimately expand to other markets. Zillow has deals in place to partner with two local brokerages in each region to help it buy and sell the homes.
“This is expected to be a vibrant line of business for us and for our partners in the real-estate industry, while providing homeowners with more choices and information,” Zillow Chief Marketing Officer Jeremy Wacksman said in a statement.
Zillow isn’t the first company to try this.
Seattle-based Redfin disclosed last year that it had begun an “experimental” service called Redfin Now to try to flip homes, as well.
For Zillow, the new service is an extension of the Instant Offers program it launched last May, where people can list their homes through Zillow’s website for investors to buy with cash (that service has been available in Las Vegas and Orlando, Florida, and is now expanding to Phoenix).
The difference now is Zillow itself will also be able to buy homes.
The question for home sellers is whether they want to give up potential extra profits from selling their home in exchange for the convenience of getting a lump sum quickly, with little hassle.
Although most people know Zillow for its website, which is the most clicked real-estate information site on the internet, 71 percent of the company’s $1.1 billion in annual revenue comes from its “premier agent” program that helps local brokerages advertise and generate leads.
In the first hour after the announcement, Zillow stock fell about 3 percent in after-hours trading.