I have always been a Zillow skeptic. For years, I have had sellers quote inflated numbers based on their "Zestimates," and now in this incredibly active real estate market, I am actually seeing the opposite – "Zestimates" that cannot keep up with the movement that we are seeing. Unfortunately, without boots on the ground, it is difficult for the online real estate giant to understand what each individual market is experiencing. With the introduction of Zillow Offers, Zillow actually became an active participant in the purchase and sale of real estate in 25 US markets, and that experience has proven much more challenging than it anticipated.
Zillow Offers was designed to simplify the process of selling your home. An interested seller in markets ranging from Atlanta to Miami to Tucson could simply sign up through the website, answer a few questions about their home, wait 1-3 days for a representative to contact them and present an offer. It was a no-haggle way to sell your home, which Zillow would then flip and sell. However, Zillow announced recently that the program, which was launched in 2018, will be shutting down.
In the announcement that Zillow Offers would be shuttered, Zillow’s CEO and co-founder Rich Barton said, "We've determined [that] 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." Zillow Offers has tried to pay fair market value for the homes it buys, and those numbers have gone up. Combine that with the supply chain issues and higher commodity prices that we are seeing, and the risk was greater than the reward for fixing and flipping homes.
As a realtor, I would always recommend working with a real estate professional and not an "iBuyer" like Zillow Offers when it comes time to buy or sell a home. There is no match for experience in a complicated real estate market.