![]() ![]() Zillow’s meltdown showed us that proper pricing, knowing the area, and finding buyers is no small task, and even a company with billions of dollars and all the technology in the world can struggle to do this correctly. ![]() This means the average homeowner likely doesn’t have a lot of experience in this transaction. The average homeowner only owns 2-3 houses throughout their life meaning they only go through this process 1 or 2 times if they do sell. The home selling process is complex with many moving parts, and the average homeowner rarely goes through the process in their lifetime. While it seems like everything in our lives is going digital, a story like this really makes you appreciate having a real person guiding you through some of life’s biggest events, one of which is moving and selling a home. House Selling Is Complex – Agents Are Still the Gold Standard As a large home inspection company, our internal numbers can be an indicator, and we can analyze these numbers to draw some opinions.įirst, let’s talk about what we believe some of the takeaways from this story are. While we are not data analysts or deeply studying this issue, we can give you our opinion on what we are seeing every day in the Colorado market. However, many other markets without major iBuyer players were experiencing a similar situation. ![]() Most of the markets in which the program was available saw massive price increases in 2021, resulting in a very competitive market for buyers. While Zillow Offers was not available nationwide, it covered many large housing markets in the county including the Colorado Front Range. Stats over the 2021 summer proved this to be true. ![]() Naturally, if you are a seller and you are offered the benefits of an iBuyer program paired with an above-market offer for your home, you are likely to take that deal. However, reports stated that the proprietary algorithm based on artificial intelligence used internally by Zillow was overvaluing homes and making move out offers that far exceeded what the market rate of the home was. The catch of course was that the offer that Zillow would send was intended to be “below market rate” for the cost of the convenience. This is a popular prospect for sellers, who enjoyed less stress, no showings, and an easily scheduled closing date. This model was not used by Zillow alone, but Zillow appears to have made some mistakes in its approach. The home would be sold directly to Zillow, who may make modest improvements and list the home themselves in the future. If you aren’t aware of what Zillow Offers was, here is a quick recap: If you were looking to sell your home over the last year, you could go the standard route and use an agent, or you could contact Zillow Offers which would give you a cash sum for your home without you having to physically find a buyer. This appears to be an abrupt rethink for the recent iBuying business model and also a big win for agents who offer a much more personal approach to selling a home. This included a layoff of 25% of their staff and left over 7000 homes on Zillow’s balance sheet that needed to be sold. Zillow announced at the end of October that it would be completely closing its “Zillow Offers” division and would immediately stop buying homes. Unless you have been ignoring the everyday news cycle, you’ve probably heard the story of Zillow’s great rise and recent fall in the iBuyer real estate world. ![]()
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