Zillow Gives Up | Urban Living
DONATE

Wednesday, December 8, 2021

Zillow Gives Up

Posted By on December 8, 2021, 4:00 AM

  • Pin It
    Favorite
click to enlarge urbanliving1-1.png

Real estate platform Zillow announced last month that it would give up its iBuying program. It worked like this: a homeowner could go online, get an offer to buy their home within 24 hours and get a check in the mail by the end of the week. But methinks the reason they gave up the program was that the buyer—Zillow—was paying what its "Zestimates" said the homes were worth. I believe those "Zestimates" are notoriously, and wildly, off in so many instances.

The point of iBuying was for Zillow to buy a home, then update it and sell quickly at a higher value. It's a growing market that many real estate investment groups are using these days and that's why Zillow got into the game in 2018. But Zillow told CBS affiliate WUSA in November that "We've determined the unpredictability in forecasting home prices far exceeds what we anticipated and continuing to scale Zillow Offers would result in too much earnings and balance-sheet volatility." In other words, Zillow ended up buying houses that they then realized were overpriced upon close of escrow.

According to a Zillow earnings report this quarter, the company lost millions of dollars. A spokesperson said the company had to lay off 25% of its workforce when the decision was made to shut down Zillow Offers.

What is the wisdom here? There are plenty of online real estate sites offering homeowners cash for their properties, promising fast closings with no hassles. Take your belongings and leave any crap you want—just walk away, grab your cash and head off to Disneyland. Studies of these types of purchases have found that the demographic for a seller prone to take this kind of offer is typically someone who is over 50 years old, living in a property that may not be updated and could be run down. These homeowners are looking for an easy way out, without having a plethora of buyers traipse through their property if it were to be listed on the MLS.

How do you maximize your potential sales price in a smoking hot market? The average homeowner who's not a real estate agent doesn't have access to sales data of properties in their neighborhood, nor is versed in how to determine potential property value based on comparable data. For example, the basic rule of thumb for appraisers in determining value is to find sales of similar properties in the past 90 days in an area of about ten blocks surrounding the subject property, of similar age, square footage and condition. They draw their information from the same MLS that we as realtors use, rather than randomly searching the web for people bragging about how much they sold their home for this year.

What we as realtors and appraisers don't use is your evaluation from the tax assessor to determine what your home is worth. This comes out during the summer of each year and is based on a mathematical formula and data provided by realtors to determine value.

About The Author

Babs Delay

Babs Delay

Bio:
De Lay is realtor/broker/owner of Urban Utah Homes and Estates. She is a former member of the Utah Transit Authority's Board of Trustees.

More by Babs Delay

  • Good Friends

    Did you wait too long to buy a home or condo? Have prices gone too high to even think you could buy something? Have no fear, ownership can happen ... with friends and family!
    • Jan 19, 2022
  • Free Fares Now!

    I had the opportunity to serve for two years on the Utah Transit Authority Board of Directors before the Utah State Legislature put a kibosh on a board of any kind and turned over the major decisions to a few people appointed by the Governor.
    • Jan 12, 2022
  • My 2021 Review

    Everyone in news media has a Top 10 of 2021, followed by predictions—so I'll be cheeky here and give you my thoughts as well, in no particular order.
    • Jan 5, 2022
  • More »

Latest in Urban Living

  • Good Friends

    Did you wait too long to buy a home or condo? Have prices gone too high to even think you could buy something? Have no fear, ownership can happen ... with friends and family!
    • Jan 19, 2022
  • Free Fares Now!

    I had the opportunity to serve for two years on the Utah Transit Authority Board of Directors before the Utah State Legislature put a kibosh on a board of any kind and turned over the major decisions to a few people appointed by the Governor.
    • Jan 12, 2022
  • My 2021 Review

    Everyone in news media has a Top 10 of 2021, followed by predictions—so I'll be cheeky here and give you my thoughts as well, in no particular order.
    • Jan 5, 2022
  • More »

© 2022 Salt Lake City Weekly

Website powered by Foundation