In a move that is likely to send shockwaves through the housing industry, real estate behemoths Zillow and Opendoor announced a new partnership Thursday that will let users of the portal get cash offers from the iBuyer.
The companies described the partnership in a statement as a “multi-year” deal that will let would-be homesellers request and see Opendoor cash offers directly inside of Zillow’s websites and apps. The program will also allow consumers to compare the Opendoor offers to “an open-market sale using a real estate agent,” according to the statement.
“Opendoor offers will be available on Zillow, and customers will be able to use the service as a standalone offering or package it with other Zillow home shopping services such as financing, closing and agent selection,” the statement adds. “Additionally, Zillow customers will be able to work with a licensed Zillow advisor who will serve as a helpful guide in understanding these options.”
The news comes less than a year after Zillow abandoned Zillow Offers, its own iBuying effort. Before the announcement, Zillow Offers had been the second largest iBuyer in the U.S. The company, which is still wrapping up the winddown of that program, said at the time that it was too difficult to predict home prices months down the road — something it needed to do in order to profitably flip properties.
The move raised questions about how exactly Zillow might execute on it’s much-touted “Zillow 2.0” vision, which has been about evolving the company beyond its bread-and-butter portal offerings.
Tuesday’s announcement of a deal with Opendoor offers an answer to those questions: Partnerships to keep Zillow in the iBuying game.
The news also came the same day that real estate analyst and iBuying expert Mike DelPrete said at Inman Connect Las Vegas that he expects Opendoor, with its massive cash reserves, to successfully weather whatever shift or market downturn is happening right now.
Additionally, just days ago the FTC announced a $62 million fine against Opendoor for what it described as efforts to “trick” consumers.
Both Zillow and Opendoor also reported their second quarter earnings Thursday.
The new partnership is likely to be controversial among real estate’s rank and file. Both Zillow and Opendoor are highly polarizing companies with both passionate fans and vocal detractors. Case in point: Zillow’s announcement last year that it was getting out of iBuying last year was one of the biggest pieces of industry news in recent memory, and more than a few agents cheered the stumble.
The fact that the company is getting back into iBuying via a partnership with Opendoor is similarly likely to elicit intense responses, both in favor and against.
For their part, both Zillow and Opendoor were upbeat about their new relationship. In the statement, Zillow Chief Operating Officer Jeremy Wacksman said that “choice is important for customers and they can make the best decision when they see all of their selling options up front.”
“This exclusive partnership will pair Zillow’s audience and brand power with Opendoor’s selling solution in one easy place, so customers can evaluate their selling options and easily package it with other Zillow services to buy and finance their next home,” Wacksman said.
Opendoor President Andrew Low Ah Kee added in the statement that the partnership should ultimately allow “more consumers will have the option to sell to Opendoor and save themselves the stress and uncertainty of a traditional sale process.”
“For parents looking to upsize, a young professional moving for a new job, and millions of others who regularly use Zillow to explore their home selling options,” he concluded, “we will provide them with the ability to move with a tap of a button.”
