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The End of Zillow Offers: 3 Things Real Estate Professionals Can Learn
In early November, 2021, it became real estate industry news that Zillow shut down its iBuying program Zillow Offers. The real estate industry giant has said its decision was made due to a $420 million Q3 loss, market instability, and a lack of necessary human resources.
For over 15 years, Zillow has been known well in the home buying and selling market mainly for its free access to real estate listings across the country, along with its Zestimate. Its Zillow Offers was a relatively new business, launching in 2018. In the new business, Zillow would buy homes from their owners, make any repairs necessary, and get the home back onto the market to sell for a profit as soon as possible. This iBuying division was aimed to “digitize and accelerate the homebuying experience.” Zillow also announced that approximately 25%, or around 2000 people, will be laid off as a result of this closure, and it will take a loss of more than $500 million. So, what happened to Zillow Offers, and what can we learn from it?
Keep Your Business Client-Focused, Not Just Market-Focused
If there’s one thing the last two years have taught us is that the real estate market can change, and you can’t base your business model on market stability alone. It’s important to put focus on client development. Zillow Offers was extremely market focused. It dove right into certain areas of the country and worked to purchase and flip homes there, quickly. In fact, according to theclose.com,” In the second quarter alone, Zillow purchased more than 3,800 homes nationwide.” But when it came time to sell these homes, the community-side of this business equation didn’t always add up. The selling wasn’t as fast as the buying. Good real estate agents know that selling homes isn’t just a supply and demand transaction, that there’s a lot of relationship development, strategy, and knowledge of the clientele involved. Staying client-focused is a must for any type of real estate endeavor.
As a real estate professional, take advantage of the relationship aspect of your business, and be sure to focus on your clients’ needs and expectations. The personal touch will never be able to be matched or replaced. Yes, much of the real estate experience will be digitized in the years to come, but buyers and sellers will always need experts to depend on.
Real Estate Agents Understand the Local Market Better than iBuyers
One of the initial advantages to Zillow Offers was its ability to streamline the online buying and selling process. It used a complex algorithm to figure out the value of a home, and then came up with the best offer to purchase and resell the home in order to make a profit. The issue with this algorithm is that it didn’t know the ins-and-outs of the homes in the communities it was calculating for. It doesn’t have the local understanding that real estate agents have. Agents have the human expertise and knowledge of the homes in the towns they help their clients settle into. This knowledge is key in ensuring homes are purchased at the right price, and sold for their highest possible value.
As a real estate agent, be sure to use your knowledge and expertise to your advantage. When you’re meeting with potential clients, or marketing yourself to them, use this as a selling point as to why they can trust you to help them move forward in their home buying/selling journey.
There’s a Process to Buying and Selling Homes, it’s Not as Simple as One Click
Let’s keep it real, no two real estate transactions are the same, and sometimes they take time. Ideally, not too much, but in some cases things can become complex. Online home buying and selling platforms, like Zillow Offers, try to attract business by sharing the idea that these common real estate hassles can be avoided by using an iBuyer platform. It turns out, that’s rarely the case.
Buying or selling a home isn’t as simple as one click. It’s not like placing your Grubhub order for dinner. Real estate transactions are a big deal. Sometimes it’s the biggest “deal” a person will ever make. And it needs to be treated accordingly. Real estate professionals understand the process that goes on behind the scenes, and how to help their clients navigate it. Being able to connect on a personal level with the seller or buyer is something that will never go out of style. It’s this human involvement that makes the process truly effective. Remember that when creating your next marketing strategy.
Velocity Title Moves Your Clients Forward
At Velocity Title, we know the human side of the real estate equation is invaluable. This is why our agents, lenders and their clients are more than just a number to us. We treat every transaction with the time, care and commitment it deserves. With our in-house real estate attorneys and our leading title experts—along with the latest title technology—we make the home buying process easy, efficient and informative. To learn more, click here or contact us today.