Buying a Zillow owned property
Is your client going to be buying a Zillow owned property? That’s we’re going to talk about right here, that is Shawna Acquisto. She’s a luxury real estate broker and would be discussing what to expect when you’re kind of buying a property, what you should be looking for.
We’re going to give you a couple of links. We’re going to actually go over the contract and we can cover that and much, much more. So, Shawna, let’s first hit with what to kind of expect.
So the eye buyer program, I think they’re coming to a close. However, they have a lot of inventory. And when I say I buyer, it means like the Zillow owned homes and open door own home, for example. So I think we’re going to see more of these because as I said, I think they have an abundance of inventory for those that are they’re going to start releasing.
So I saw a stat the other day that one in five properties, I believe, was the number that went through and was bought by that has now been purchased by an institutional buyer that’s even larger than those companies that holds the real estate as an entity and then ends up selling it out, leasing it out. So I’ll hold it for an even longer term, then the I buyer, because the eye buyer wants to flip it.
Yeah. And then these institutional people are buying it from them at a discount. Mm hmm. These people are just like losing money, and it is just like, keep doing it.
I mean, the seller, though, what do they care?
Yeah, it’s always like, Hey, nice job, guys.
You know, in certain situations, I think it could be beneficial for a seller. You know, you see the commercial on TV with the person with like 10 kids and no showings. Oh, that’s great. But you know, I don’t know very few instances. Do I think it’s a good idea.
So we have a contract and we’re going to go over there.
This is one example. So this is where there is a listing and Berkshire Hathaway is a designated listing agent. But it is a Zillow owned home. So there’s a lot of things, and I’m sure that they went through attorneys to to get this all ironed out. But here’s some some things I think you should pay attention to. So the Trek contract is what we are required to use as agents.
Yep. So the Zillow owned home is required for you to. They said, You know, it’s fine. You want to use the contract fine, but once it’s accepted, it’s going to transfer over to the Zillow contract. So you might as well fill that out when you submit your offer.
So what I want? So I don’t know how that works. If you guys have been in the business for some time back when they had like foreclosures and bank owned properties, FHA Home Path properties like that, they had their own forms to fill out their own contract.
So but this isn’t a foreclosure. So that’s where it falls under different guidelines. But this contract takes the things that we have in our contract, but it just really expands upon it and provides a lot of different things that I think we should pay attention to.
So we’re going to link to this in the description. You can find it and review it at your leisure. But we’re going over it quickly there.
My what I want to stress is if you have someone purchasing one of these properties, please look at this contract in advance. Read through it, explain it to your client that you’re going to have to do your contract. That’s a promulgated form for Texas real estate, and they’re also going to have this contract that we want to make sure that we are going through looking at every detail. And I would suggest, since we’re not attorneys, that if you have something like this that you suggest.
Look, I would recommend that you have your attorney look over this. This is not standard for us as realtors, right? So I would really feel better if you had your attorney, just glance over it and take a peek. Tell them all that up front. But there’s a couple of things I do want to point out in here to pay attention to. Yes. One is the seller’s disclosure.
Ok says they don’t have to provide a seller’s disclosure, but then there’s some language in there that says, You know what, if we provide you material defects or if they’re material defects, will we’ll let you know about those. So my understanding is they don’t fall under right. They don’t fall under the exemptions of being able to not provide a seller’s disclosure.
Ok. Right. The other thing is on the contingency. So if you have a home to sell and it’s contingent upon the sale of another home, they have a disclaimer in there that they’re going to continue to market the property and accept offer.
And they’ll boot you out. Now we know that that that is in their kick out clause, right, that we have that option too, but their language kind of makes it feel like that’s what they’re going to do. So there’s just little things like that in the contract, but you have to make sure that you don’t assume, like I said before, that this is just basically our contract on their form.
No, there’s lots of other additions that they have that you need to understand and go through. And it’s not a standard form. So Zillow may have a contract, Opendoor may have a contract or these new entities that you’re talking about may have their own contract.
So we just want to make sure that we are protecting our clients and know that we’re giving them the best advice. Get an attorney if they’re not for sure and make sure that they read through that and you read through that properly so and thoroughly.
Ok, so if we were to have some big categorizations of what’s going on here, yeah, I think the people that sold a property to any one of these big institutional investors, you know, whether they’re buying them through some buyer program, I think the house is more apt to have a major issue and by major issue, I mean, either, you know, whether it’s a system issue that it doesn’t heat and cool right in certain spots, but just fundamental problems that may show up on an inspection but might not like this. Lowe’s not right. Why?
In a market of multiple offers that people are begging and doing everything in, you know, giving up their children as part of the deal? No, in all honesty, why would someone over the dogs, never their ducks? Why would someone just want to be done?
And like I said, I think there are instances, very few that if they’re elderly and they just can’t go through this process or they have a lot of children and they just can’t allow these showings, or if they’ve owned the home for a long time, they’re like, That’s fine. I’m totally happy with that, that price.
My issue is, I believe, the homes that were bought.
I believe that to that are the ones that are just super unique, but in a bad way, right? Like, there’s something in them that you just walk in and it’s maybe like a sunk down, you know, living room that’s like has one step in it or something like super unique or it just has a weird floor or the kitchen’s too small.
And on paper, it’s OK. But then when you see it, you’re like, Oh, this is just a little weird, right? Like the lights from the headlights shine directly into the house all the time.
I mean, those are things that see a material defect of the home, but something that could maybe there’s a dump behind the house or all of these factors that you’re unaware of. And you know, this is a situation that I know we’ve talked about before, but we had an open door property and I’m not bashing anybody.
I’m just giving you examples, real life examples so you can be aware of. But we had a property buyer went in. They had no weed. Here’s your disclosure we never lived in it. We don’t know anything, right? No survey. We don’t have a survey, but we found a survey and that survey had a pool in the backyard. Well, on the survey and you know, us looking at it, there was no pullback there.
They actually had a gazebo where the pool was. So in digging, we found out that actually that I buyer open door provided us with the survey and I said, Hey, there’s no pool here. They’re like, Yeah, we know you have to have a permit to remove a pool because there’s electrical and plumbing fixtures and things, gas fixtures. And they didn’t do that. So needless to say, our buyer terminated.
But those are just some of the things that if you didn’t stumble on it and you find it out later, that could be pretty catastrophic.
And I don’t think they want to deceive you. But I just think the properties they end up buying are super unique along those lines. I don’t know who goes and looks at it honestly
Or hears enough for who really digs into find the stuff. You’re not going to find it if you’re not local, if you don’t know if it’s not important, if it’s, you know, all those things and those programs are like, we’re going to buy it fast and fast has a problem. It does right there, buying it from, like New York City.
Just be aware, be a little extra cautious if you see something like that and you know, don’t take those little things for granted because it could cost you later.