Zillow iBuying Program Failure
This month real estate portal Zillow announced they would lay off 25% of the workforce and shut down their iBuying arm after taking millions in losses.
- Real Estate Prices - They had a hard time predicting prices – did not buy enough homes in 2020 before the big price pump and bought to many this last summer as prices started going flat – predicting real estate prices is very hard
- Maintenance Prices – Zillow had a hard time predicting the amount of maintenance needed to get these home ready to resell – predicting maintenance cost is very hard and eat up profits fast
- Real Estate Disruption – The real estate markets are being disrupted by technology but is much harder than other business because it requires so much labor and attention to details – real estate agents are essential
- Not Using Local Expert - Zillow did not use local real estate agents or property managers. As a result, they did not understand the local markets and tried to treat every property as a “National Market”
Real Estate investors – large or small – need local experts with local knowledge and ability to deal with the many issues involved in real estate sales and investing.