Zillow announced Thursday a new partnership with D.R. Horton, the nation’s largest homebuilder by volume. Through the partnership, homebuyers working with the builder will have the opportunity to sell their existing home to Zillow with a flexible closing date, and in some cases, cash credits at closing and free local moving services.
“New build is about 10 percent of the overall activity, so we’ve always thought that it was a really important channel,” Arik Prawer, the president of Zillow’s home division, told Inman. “To provide that certainly and bridge the time table uncertainty for both the customer and the builder is important.”
The partnership aims to simplify timing issues for buyers looking at new construction homes, while simultaneously trying to sell their existing home. The consumer can chose their closing date if they sell to Zillow, which allows an extended closing of up to eight months and the flexibility to modify that closing date to align the transactions.
“It really allows people to avoid the double mortgage and the double move,” Prawer said. “It provides certainty and convenience, they don’t have to have a contingent offer so they can go in with more strength.”
Homebuyers purchasing a home from D.R. Horton — which also sells to Zillow — may also be eligible to receive some cash credits at closing and free local moving services, depending on their local market. Zillow declined to disclose the amount of the cash credit.
Despite the involvement of the homebuilder, Zillow is still being represented by a local agent in each market for its homebuying transaction. Prawer also praised D.R. Horton for being an agent-friendly builder.
The Zillow Offers service is the same that’s offered to all sellers. A quick-close, all-cash sale, as well as a sales process that doesn’t involve open houses, showings or prepping the home. Sellers can get a no-obligation initial offer in about 48 hours after answering a few questions about their home and uploading photos.
The new partnership is an extension of an existing program Zillow launched in September with a number of homebuyer partners across the country and has since grown that program to more than a dozen partners.
Scaling the platform through partners with homebuilders is just another strategy for Zillow, outside of its direct-to-consumer approach.
“The service that we provide dovetails with [homebuilder’s] needs almost perfectly,” Prawer said. “It’s even exacerbated in the homebuilder scenario sometimes because of the distance between when a transaction takes place and when you can close a transaction.”
Tapping D.R. Horton gives Zillow a partner that’s unrivaled in volume. D.R. Horton closed 56,975 homes in the 2019 fiscal year, the company’s 18th consecutive year as the largest homebuilder in the United States, according to its earnings filing. Zillow will be the company’s exclusive iBuyer partner and D.R. Horton operates in every single Zillow Offers market.
“It’s a great endorsement of what we built that they’re trusting us as their exclusive partner,” Prawer said. “We’re super excited about it means.”
He added, “We have tremendous alignment on customer service, on customer trust and we have a geographic overlap that’s almost one-to-one.”