How many times have you visited Zillow.com to get a quick overview of what your home (or a neighbor’s) might be worth, according to the Zestimate website? Some people thought that Zillow’s Instant Deals were just too good to be true. And maybe they were right.
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The popular real estate website has ceased all buying activity and laid off 25 percent of its workforce.
In 2006, a guy named Richard Barton saw a future in which the real estate industry would be transformed in less than a decade. And he was right.
Zillow brings together information on almost every home for sale or rent in the United States and allows users to find this information easily and quickly in one place.
In just a few years, Zillow has grown into the most popular real estate marketing site on the Internet.
Since then, Zillow has finally decided to transform into a one-stop-shop, not only offering free information, but now helping consumers find loans, insurance, home guarantees and even closing lawyers.
Additionally, in 2018, Zillow announced Zillow Offers, a massive company that makes cash offers on homes for sale and then repairs them to resell them as soon as possible with a profit.
One of the keys to Zillow’s success has, from the beginning, been a series of algorithms (or mathematical formulas) that have been used to make an educated estimate of the value of a home, if it were offered for sale. at this moment.
Zillow called these numbers Zestimates, and their accuracy has varied considerably over the years. It is usually directly related to the availability of public data in a particular state, and this information is not very good in Georgia.
In the computer world, we say inbound waste – outbound waste, which means the Zestimate is probably no better than the data available to the estimator. So in some states, like Georgia, Zestimates just weren’t very accurate, even as estimates of a home’s value.
This becomes important in 2018 when Zillow decided to embark on the house flip. In other words, they would buy a house for cash, make cosmetic upgrades, and then try to sell for a nice profit.
The reason they thought it would be successful is because the company believed in their own estimate of the home’s value as is and their own estimate of what it would be worth once it was smoothed out.
And they got into this business in a very big way.
The company stunned the industry earlier this month when it announced it would be shutting down Zillow Offers, its company’s home-reversal arm. He also said he would try to unload more than 7,000 homes and quit the iBuying – or “instant buy” – business altogether.
This represents $ 2.8 billion of homes. And a recent report says nearly two out of three homes owned by Zillow are now listed for less than the price Zillow pays.
Zillow is now in the process of trying to quit this business, which worries thousands of sellers who are under contract with Zillow to buy their homes. Only time will tell how many of the 7,000 homes will be put back on the market. And that will make a lot of sellers angry.
The bottom line for FOX 5 real estate expert John Adams is that the Instant Offers business can be of value to a seller who wants to close quickly and sell their home as is. But this form of selling, especially to a business buyer who has never seen the home, is still in its infancy, and sellers are well advised to explore all of their selling options.
In many areas of life, when something sounds too good to be true, it is often too good to be true. Let the buyer of iBuying services beware! A more traditional approach to selling may be a salesperson’s best bet.
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