SAN DIEGO — The cost of buying a house in San Diego is going up while sales are going down. Now a major real estate company wants to expand a program to San Diego that it says would make selling your home a lot easier. But there may be pros and cons for both homeowners and sellers.
Real estate website Zillow is bringing its “Offers” feature to San Diego where the dot-com says it will buy your home for cash on your schedule.
"If you didn’t want to go through the hassle of listing, doing prep work, fix-ups to sell house as it is, we're doing it for you,” said Zillow President Jeremy Wacksman.
The company is already in 15 cities and wants to expand to 26 - including San Diego and L.A. in the near future. It has a lofty goal of buying up to 5,000 homes a month – but they don’t call it “flipping.”
"We are paying market rate for homes and we’re quickly turning around and finding buyers,” said Wacksman. “We think of it much more like market-making.”
Zillow’s home purchases would average out to about 5% of all homes bought in San Diego County or around 200 a month.
“200 in that scheme of things is not much, but will they look to grow that number? Obviously, anything that we as realtors consider traditional process is a disruptor,” said Robert Calloway.
Calloway is president of the Pacific Southwest Association of Realtors and cautions buyers about the price of convenience.
Companies currently pay up to 10% less for similar services or charge higher fees.
“Always try to get a professional who will stand out and help you,” said Calloway.
Zillow says it targets homes in the middle of the market. Its own data puts the median home price in the city of San Diego at more than $630,000. Leaving little room for first-time home buyers to get an edge in.
Zillow counters those fears saying its service could actually help them by giving reluctant owners an easy way to sell.
"Any time you can bring cost down so it’s cheaper for you to sell and we can bring inventory online – I think that helps with affordability and options - especially for first time buyers,” said Wacksman.
Zillow Offers isn't currently making money - in fact the program lost more than $70 million last year. So, Calloway suggests taking a wait-and-see mentality.
“Zillow's been around since 2008,” said Calloway. “They’ve been here, and we thought the world was coming to an end, but it hasn't. So I think it’s another business model decision that we'll live with and see how it goes.”