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Zillow ready to flip houses as its home buying business expands to the Triangle

Zillow is expanding its home buying business to Raleigh.
Zillow is expanding its home buying business to Raleigh. The News & Observer

The Triangle’s hot housing market has attracted another internet homebuying startup to expand to the region.

This time it’s Zillow that is getting in the game, bringing its new service, called Zillow Offers, to the Raleigh and Charlotte markets this winter.

Zillow’s new service is part of a growing segment in the real estate industry, in which homeowners can submit information about their homes from their smart phones and can receive a cash offer to buy their home.

The companies use algorithms to produce an offer price that they believe is fair, and then, after making small repairs to homes, they put them back on the market a few weeks later. Essentially the companies are attempting to flip the homes for a profit.

Already, startups such as Opendoor — which has bought hundreds of homes in the area this year — and Knock have opened operations in the Triangle.

All three companies tout that their services help simplify the process of selling a home and take away some of the stress by providing a guaranteed buyer — something that can help when homeowners are trying to sell and move quickly into a new home.

According to the company’s internal research, about 61 percent of sellers are also buying a home at the same time, and timing the sale of their home with the purchase of a new one is a big concern.

“In 2018 and beyond, the consumer expects something quite different. Some portion of those consumers expect a fully seamless and nearly instantaneous sale of their home,” Zillow CEO Spencer Rascoff told analysts earlier this year, according to CNN Money.

But some say that using these services means missing out on demand-driven bidding wars, which can help homeowners reap selling prices way above asking prices. This has especially been the case in the Triangle, with most homes receiving multiple offers within days of being put on the market.

“I don’t think it will work in this market. The Triangle has a lot of upward pressure on (home prices) right now ... when sellers are using Opendoor they are leaving money on the table,” Tammi Brooks, a managing broker at Inhabit Real Estate, told The N&O when Opendoor entered the Triangle market. “There is so little inventory and so many buyers in our market, we are seeing five, 10, 15 offers per listing. People are offering a lot of money over list (price).”

The Raleigh market is the sixth area that Zillow has entered, along with Charlotte, Phoenix, Las Vegas, Atlanta and Denver.

Zachery Eanes: 919-419-6684 @zeanes
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