Zillow and Opendoor Partnership: Something STINKS

Zillow and Opendoor announced a new partnership where buyers and sellers shop on the Zillow website and then can buy homes directly from Opendoor, bypassing real estate agents and using Zillow's preferred vendors for a mortgage, title insurance, escrow, and other services. In a press release, Zillow explained that the multi-year partnership that combines two category leaders to "transform how people start their move. The partnership will allow home sellers on the Zillow platform to seamlessly request an Opendoor offer to sell their home."

Hmmmm, what could be wrong with that? Doesn't it make sense for the transaction to be so easy and efficient?

Well, depends on who you are.

If you were going to hire a person to sell homes for you, how would you react if the week of the interview the applicant had been fined by the Federal Trade Commission (FTC) for alleged misrepresentations to customers? This is even before taking the time to correct processes and procedures to correct the practice.

That's exactly who Zillow hired to sell to their customers. Opendoor, the largest iBuyer (online investor buyer of property) in the United States and Wall Street darling, recently agreed to pay a $62 million fine and change its procedures in an agreement announced online on August 1. Link here to the FTC press release with details. So, on August 1, Opendoor files this settlement, and on August 4 Zillow hires them to offer their service to their best clients.

And understand what the settlement says. While Opendoor claims to help homeowners save money using their platform, they said in the press release in fact, the vast majority of consumers who sold to Opendoor lost thousands compared to what they would have realized in net proceeds from selling on the market because Opendoor's offers have been below market value on average and its costs have been significantly higher than what consumers typically pay."

So, what does this say about Zillow? I would love your feedback.
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Bill Gross, The LAProbate Expert
I am a real estate broker in Los Angeles, CA focused on probate real estate and the leader of a team of over 1,100 agents nationally probate experts.

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