What happened to Zillow Offers?
Updated: Jan 27, 2022
The new real estate fad lately has been national iBuyer programs that had many forecasters predicting these companies with deep pockets and computer algorithms were going to dominate all real estate transactions in the near future.
However, just last month “Zillow offers”, one of the biggest I-buyers in the country, announced it was “pausing” its purchasing and sales program. Zillow claimed this was due to labor shortages and supply chain issues. Just a few days later after the actual sales numbers were released Zillow had to reveal that they were actually not very good at buying and selling property on a national scale and were holding billions in property that they overpaid for and are selling for less than purchased. Zillow’s apparent profit strategy required non-stop real estate growth.
It may seem like Zillow has been around forever but it’s a relatively new addition to the real estate arena. Zillow relied on their artificial intelligence (AI) algorithms to calculate buy and sell prices for homes. This strategy failed to acknowledge that markets run in cycles, and those cycles don’t continuously rise. But their biggest oversight was that real estate requires actual humans who provide a service by working and understanding the local market and what sellers and buyers need.
Just like “Zillow Zestimates” Zillow has shown relying on a computer program to make decisions on selling isn’t perhaps the wisest choice. What Zillow and other national iBuyer programs are finding out the expensive way is, real estate is hyper-local and constantly changing. An algorithm cannot see inside your house or talk with you to understand your needs. Only a local professional who lives in your neighborhood and knows your local market and trends can provide that type of assistance.
Contact us today and let’s see what solution we have for you!