Compare Orchard and Zillow Offers

Editor's Rating

Users' Rating

Editor's Rating

Users' Rating

For Sellers

Cash Offers
15%-20%
Home Equity
Perch does not provide real estate services to home sellers. Instead, the company buys homes directly, repairs and resells them to consumers or investment companies that rent them to tenants. Perch make an offer equal to 80%-85% of home value accounting for fees and any cost of the repairs and resale.

For Sellers

Cash Offers
15%-20%
Home Equity
Zillow Offers does not provide real estate listing representation. Instead, the company buys homes directly, repairs and resells them to consumers or companies that rent them to tenants. Zillow Offers typically makes an offer equal to estimated 80%-85% of home value accounting for fees and any cost of the repairs and resale.

For Buyers

Not Applicable
0
No Rates
Perch does not provide real estate services to home buyers. Perch does resell some of the homes it buys on the open market, just like any other real estate investor aiming for the highest return on investment.

For Buyers

Not Applicable
0
No Rates
Zillow Offers does not provide real estate services to home buyers. Zillow Offers does resell some of the homes it buys on the open market, just like any other real estate investor aiming for the highest return on investment.
You are now comparing two different service models: Orchard is a direct home cash buyer while Zillow Offers is a direct home cash buyer
Compare Orchard and Zillow Offers for home buying and selling. HomeOpenly is an impartial and an open resource focused on trending real estate services, portals and start-ups.

First published: 17 February 2019
Last updated: 29 March 2020

Buying and Selling with Orchard

Orchard (formerly known as Perch) is a Texas-based VC-backed real estate investor that operates across highly specific locations. Where available, Orchard mainly focuses on homogeneous homes built before 1978 and where the valuation of the home is between $125,000 and $500,000. In determining the offer, Orchard discounts from the estimated retail value after home is fully renovated. Alternatively, Orchard sometimes acts as a real estate broker and represents consumers as Orchard Realty.

Orchard Pricing

Orchard makes money with a difference between buying and selling each home. This difference is a combination of fees and home value appreciation between what Orchard buys and seller each home for. Sellers can expect to receive 80%-85% of their home value from this type of sale after any fees, cost of the minor repairs, and resale. For Sell Only service, Orchard Realty charges a 6.9% listing fee.

Listing Services

  • This Service Does Not Represent Sellers

Buyer's Agent Services

  • This Service Does Not Represent Buyers

Orchard Editor's Review:

Orchard will buy a home at a price that is below market value due to necessary repairs, renovation, and other factors. After Orchard buys the home, it renovates and resells it for a profit to other buyers or companies that rent homes to qualified tenants.

Orchard claims that its fees are limited by 8.5% Orchard fee, but this fee does not mean that Orchard will offer consumers a fair offer. Orchard is not obligated to present consumers with a fair offer for their property because, unlike a real estate agent, it does not represent consumers when selling a home.

Additionally, similar to a traditional home sale process, the seller is responsible for covering their closing costs. This typically includes (but is not limited to) title insurance policy, attorney and escrow fees, and any HOA transfer fees. With higher fees comes a convenience of an all-cash closing when selling a home. Orchard claims to provide convenience, speed, and certainty of a fast sale.

Dubbed as an iBuyer, Orchard makes an offer on a house within days or hours, but this offer is highly conditional. Each offer Orchard makes is just an estimate, it is non-binding until the company makes a home inspection. At the inspection Orchard will often find reasons to lower its original offer when it finds items that need repair or if it has made a mistake in its original valuation.

When the company is unable to make an offer, it simply redirects consumers to a random real estate agent in exchange for an undisclosed referral fee. When using Orchard consumers agree that company and “any of its affiliates, agents, service providers or assignees may call you, leave you a voice, prerecorded, or artificial voice message, or send you a text, e-mail, or another electronic message for any purpose related to your home sale or purchase.”

Orchard offers fast home sales, but these are typically accompanied by higher fees. Orchard only makes offers to select homes in select regions.

The main disadvantage of using Orchard is high losses in homeowners' equity. Orchard is a "heavy" model, backed by a large amount of VC capital ready to buy homes in all-cash transactions. As any real estate investor, Orchard is susceptible to losing money in any given transaction.

This model is susceptible to a number of risk factors, high operational costs and a continued need for higher-than-average Return on Investment (ROI) with each flip. Orchard is not legally bound to represent consumers, its main legal obligation is to its shareholders.

Orchard's fast transaction and easy move-out experience typically come at an extremely high price because this model incurs "double" transaction costs during the purchase, holding period, rehab work and final sale that includes real estate agent fees.

Orchard pays real estate agent commissions like any other buyer and seller of real estate, so these costs must be accounted for in the company's fee structure. The facts continue to point against Orchard's claims that it offers fair value for the houses it buys.

Moreover, because most homes in the United States are financed, homeowners own only partial net equity in their home. Banks receive the same amount of the remaining mortgage sum regardless of how any given home is sold, whereas only homeowners’ net equity is lost in transaction fees paid to Orchard.

Typically Orchard uses the following factors when determining the offer: existing condition of the home including repairs needed, time it will take to finish needed repairs, value of a home compared to other comparable homes in the area, real estate commission required to resell, costs associated with maintaining a home during repairs, including taxes, payments, insurance, utilities and homeowner dues.

Today, there are a number of highly qualified real estate agents who offer competitive listing rates and flat fee listings across the United States. Unless a situation absolutely requires a quick sale, HomeOpenly recommends that consumers first consider using a licensed real estate agent working on competitive terms to properly list their homes on the open market before turning to Orchard option.

Some real estate agents are now offering Concierge services that include painting, landscaping, and other services that help consumers place their home on the open market without upfront costs and high loss to home equity.

Orchard Service Areas:

San Antonio, Dallas-Fort Worth, and Austin

Buying and Selling with Zillow Offers

Zillow Offers is a real estate investor and an agent referral network that operates across highly specific locations. Where available Zillow Offers mainly focuses on homogenous homes. In determining the offer, Zillow Offers discounts from the estimated retail value after home is fully renovated.

Zillow Offers Pricing

Zillow Offers is almost entirely built to sell consumer’s data to Premier Broker and Premier Agent participating agents. Zillow also makes money with a difference between buying and selling homes, although only about 1% of all requests end up in successful Zillow Offer.

With these few actual buying transactions each year, Zillow makes money with value appreciation between what Zillow Offers buys and seller each home for. Sellers can expect to receive 80%-85% of their home value from this type of sale after any fees, cost of the minor repairs, and resale.

Zillow Offers further looks to push consumers to use its own mortgage company.

Listing Services

  • This Service Does Not Represent Sellers

Buyer's Agent Services

  • This Service Does Not Represent Buyers

Zillow Offers Editor's Review:

Skip the hassle, it is only 1% likely that sellers will accept an offer from Zillow Offers. Instead, Zillow will try to convert seller's request into a lead, sold to random Premier Agent.

Zillow Offers is a classic bait-and-switch sales model. First, consumers are "baited" by Zillow’s magical all-in-one home offer opportunity, but out of tens of thousands requests only a few dozen homes are actually sold to Zillow. Instead, Zillow’s business model aggressively converts consumer requests into seller leads. The interesting thing about this scheme is that Zillow is blatantly open about it.

Here are some excerpts from Zillow Offers website:

  • "Initial data from Zillow Offers indicates that of sellers who request a Zillow Offer, the vast majority end up using an agent."
  • "Zillow Group does not guarantee that it will make an offer or that any offer made will provide the best terms available or will result in the greatest net proceeds to you."
  • "If you do not accept our offer, we can refer you to one of our local partner agents who advertises on Zillow."

Zillow Offers suffers from terrible privacy policy. From one side Zillow states to consumers that "we do not share your contact information unless you request to be connected with an agent or a mortgage lender," and on another section directed at brokers it states that "if a seller is not yet working with an agent and they decline Zillow’s offer, Zillow will work to immediately connect them with a local partner brokerage and agent."

Here is how one of these Premier Brokers describes the process:

  • "We receive listing and buyer referrals directly from Zillow's Premier Broker concierge services. These leads have been scrubbed and vetted before they are directly handed off to you."Source: Sonoma County RE/MAX Marketplace, Zillow Premier Broker participant.

Zillow Offers will buy a home at a price that is below market value due to necessary repairs, renovation, and other factors. After Zillow Offers buys the home, it renovates and resells it for a profit to other buyers or companies that rent homes to qualified tenants. With low offer price, comes a convenience of an all-cash closing when selling a home. Zillow Offers claims to provide convenience, speed, and certainty of a fast sale.

Dubbed as an iBuyer, Zillow Offers makes an offer on a house within days, but this offer is highly conditional. Each offer Zillow Offers makes is just an estimate until it makes a home inspection. At the inspection, Zillow Offers will often find reasons to lower its original offer when it finds items that need repair or if it has made a mistake in its original valuation. When the company is unable to make an offer, it simply redirects consumers to a random real estate agent in exchange for an undisclosed fee. Zillow Offers only makes offers for select homes in select regions.

The main disadvantage of using Zillow Offers is high losses in homeowners’ equity, this is beside the fact that the program is designed to collect and sell user data instead of actually buying homes.

As any real estate investor, Zillow Offers is susceptible to losing money in any given transaction. This model is susceptible to a number of risk factors, high operational costs and a continued need for higher-than-average Return on Investment (ROI) with each flip. Zillow Offers is not legally bound to represent consumers, its main legal obligation is to its shareholders.

Zillow Offers’s fast transaction and easy move-out experience typically come at an extremely high price because this model incurs “double” transaction costs during the purchase, holding period, rehab work and final sale that includes real estate agent fees.

Zillow Offers pays real estate agent commissions like any other buyer and seller of real estate, so these costs must be accounted for in the company’s fee structure. Moreover, because most homes in the United States are financed, homeowners own only partial net equity in their home. Banks receive the same amount of the remaining mortgage sum regardless of how any given home is sold, whereas only homeowners’ net equity is lost in transaction fees paid to Zillow Offers.

Typically Zillow Offers uses the following factors when determining the offer: existing condition of the home including repairs needed, time it will take to finish needed repairs, value of a home compared to other comparable homes in the area, real estate commission required to resell, costs associated with maintaining a home during repairs, including taxes, payments, insurance, utilities and homeowner dues.

Zillow Offers Service Areas:

Raleigh, Charlotte, Phoenix, Denver, Atlanta, and Las Vegas