(Zillow Photo)

Zillow Offers debuted in Los Angeles and neighboring Orange County today, the second largest housing market in the nation and the biggest yet for the real estate giant’s direct home sales program.

Zillow Offers was already available in San Diego and the Inland Empire area, so the expansion to Los Angeles means the program now blankets much of Southern California. Zillow  available in 22 markets, and Zillow has announced it will expand to Cincinnati, Ohio, Jacksonville, Fla., Oklahoma City and Tucson, Ariz. by the middle of next year.

In addition to the overall size of the market, this expansion of Zillow Offers is notable because crosstown rival Redfin kicked off its own home sales business in Southern California. The two companies have taken different approaches to their home sales businesses, with Zillow going all-in on expansion and Redfin growing at a slower pace.

Under the program, some homeowners in Zillow Offers markets see a button on the Zillow site that says “get an offer.” The seller fills out a short questionnaire and sends in a couple photos. About 48 hours later, Zillow comes back with an offer and an agent to work with. The seller and Zillow set up a call to walk through the offer and schedule an inspection. Then Zillow sends a revised offer after seeing the house. If both sides are happy with the situation, the seller signs forms digitally and picks a closing date. Zillow takes care of the rest.

Contractors working for Zillow undertake small renovations to prepare the home for sale. Zillow works with local agents to list and sell the homes and pays commissions to agents on each transaction. Zillow attaches a service fee for the seller in exchange for avoiding the hassle, time commitment and uncertainty of a traditional home sale.

Zillow went all-in on buying and selling houses directly through Zillow Offers in February, including an ambitious projection of $20 billion in revenue in three to five years on home sales alone. Zillow as a whole brought in $1.3 billion in revenue for all of 2018.

The company is off to a good start as home sales made up the majority of the company’s business for the first time last quarter. Zillow’s “Homes” segment brought in $384.6 million in revenue in the third quarter, 51.6 percent of the company’s total revenue of $745 million. Zillow sold 1,211 homes and purchased 2,291 homes in the quarter, ending the period with 2,822 homes on its balance sheet. The segment also took a net loss of $87.9 million.

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