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Property Management Blog

Zillow’s iBuying Failure: What are the Lesson Learned Every Real Estate Investors Needs to Know!

Zillow iBuying Program Failure

This month real estate portal Zillow announced they would lay off 25% of the workforce and shut down their iBuying arm after taking millions in losses.

Lessons

  • Real Estate Prices - They had a hard time predicting prices – did not buy enough homes in 2020 before the big price pump and bought to many this last summer as prices started going flat – predicting real estate prices is very hard
  • Maintenance Prices – Zillow had a hard time predicting the amount of maintenance needed to get these home ready to resell – predicting maintenance cost is very hard and eat up profits fast
  • Real Estate Disruption – The real estate markets are being disrupted by technology but is much harder than other business because it requires so much labor and attention to details – real estate agents are essential
  • Not Using Local Expert - Zillow did not use local real estate agents or property managers.  As a result, they did not understand the local markets and tried to treat every property as a “National Market”

Takeaways

Real Estate investors – large or small – need local experts with local knowledge and ability to deal with the many issues involved in real estate sales and investing.