Another day, another Zillow update!
It’s no secret that Zillow has been making headlines quite often in recent months. And If you haven’t been paying close attention to the world of IBUYERs in real estate, you may have missed some recent, important news. Today on the blog, we’ll be talking all about the latest Zillow Update and what it means for the market.
Zillow Announces They Will Be Closing Their Zillow Offers Division
As of November of 2021, Zillow announced that they would no longer be buying, renovating and reselling homes on their own. Along with ceasing this service, they announced a cut in 25% in their more than 6,400 member workforce as a result. According to NPR, they cite their reasoning as being “bogged down by a backlog of renovations and closings caused by labor and supply shortages in the U.S. housing market.” And their Q3 Zillow Offers letter to shareholders detailed their shortcomings when it came to sales. In fact, they shared that they were “negatively impacted” by about $304 million in the third quarter from the program after purchasing homes at a higher price than they currently estimate future selling prices to be. They bought 9,680 homes in the third quarter but sold only 3,032 of those.
Zillow Continues to Back Out of Promised Deals in Q4
And just when we thought it was the end of some big changes for this instant buyer for a while, we thought wrong! The Phoenix Business Journal reported that: “More homeowners across the country are getting breakup calls from Zillow Offers, offering thousands of dollars to break off homeowners’ contracts to sell their homes to Zillow.” And it’s a move that could possibly cause some litigation according to their experts. Why? Homeowners and sellers are, understandably, angry that Zillow is backing out of deals that it promised to complete despite their recent closing of their Zillow Offers division. And Zillow spokesperson Matt Kreamer told the Phoenix Business Journal that: “For a small subset of customers closing later in 2022, we determined we can no longer support their closing and are releasing our earnest money to them. Typically, homes close in 30 to 45 days.” So, just how many people are being affected? Kreamer said that Zillow Offers is cancelling almost 400 transactions of the nearly 8,172 contracts it has with people selling their home across the nation.
Your Real Estate Agent Truly Does Matter
What does that mean for us over here at The Cusick Group? Our most important takeaway is that from its inception, Zillow has tried to convince the public that agents are obsolete and the Zillow formulas for home valuations would be all buyers and sellers would need in order to conduct transactions without agents. We think the outcome of this experiment has proven agents are more valuable than ever in real estate transactions, not just from a valuation standpoint, but the entire process.
That’s precisely where our trusted experts at The Cusick Group come in.
No more than ever, we are proud of our passionate, dedicated team. Our many years of Valley real estate knowledge sets us apart from the rest, solidifying us as experts that can better serve you. If you are looking for more market information, or want to buy or sell, we are here to help. Start working with us by calling us or texting us today at 602.790.7966.