Article Originally Posted By PhoenixBusinessJournal On November 23, 2021
Homebuyers across the country are furious with Zillow Group Inc. (Nasdaq: Z) for canceling contracts after Zillow promised to stick with all the deals it had under contract as it shutters its Zillow Offers division.
Compounding the issue is the fact that many of these homeowners are waiting for their new construction homes to be completed, pushing the sale of their existing homes to Zillow until early next year.
It's these types of deals that Zillow Offers seems to be backing out of.
"For a small subset of customers closing later in 2022, we determined we can no longer support their closing and are releasing our earnest money to them," said Zillow spokesperson Matt Kreamer. "Typically, homes close in 30 to 45 days."
As more homeowners are reaching out to the Phoenix Business Journal to share their frustrations, Kreamer said Zillow Offers is cancelling nearly 400 transactions of the 8,172 contracts it has with home sellers nationwide.
In the Atlanta, Georgia, area, Ellen Bell received a call on her birthday from Zillow Offers, offering to refund her $1,000 deposit, plus another $4,000 if she terminates the contract by Nov. 30 for her 3,500-square-foot home she had planned to sell to Zillow for $360,000.
That consolation prize is a far cry from the $10,912 Zillow offered to Tony and Sarena Miller in Buckeye on Nov. 18 for their 1,580-square-foot home in Buckeye that was set to sell to Zillow for $418,872.
When Bell got the call from Zillow, she quickly showed her contract to her nephew, who is an attorney.
"He said the way the contract is set up, the most I would be entitled to is the deposit if they default on the contract," Bell said. "It's frustrating."
She hasn't signed the contract yet, but she feels she doesn't have much recourse. She hopes she can find another ibuyer or investor to buy her home so she can use those proceeds for her new home under construction.
Bell wonders why she was only offered $4,000 when the Millers were offered $10,000.
"Each customer's circumstances and homes are unique, but unfortunately, we don't discuss the particulars of each situation," Zillow's Kreamer said in response.
Meanwhile, Jerry Culpepper had a sale agreement with Zillow for $351,085 for his home in Marietta, Georgia, that was set to close in February in time for their new home to be completed in Florida.
However, Culpepper's offer was only $2,500 in addition to the $1,000 deposit.
He also has until Nov. 30 to accept the deal.