It’s been a big couple of weeks in the real estate industry despite the lulls we often see in Q4. While the Federal Reserve has been center stage shaping the future of mortgage interest rates, Zillow, one of the largest online real estate marketplaces in the US, has endured significant layoffs and stock decline.
1. Leave it to the experts. As we all know, real estate is harder than it looks. Zillow found out the hard way when they strayed from what they were doing well and started buying and selling their own homes. Even in the digital age, Zillow’s failed iBuying venture is a great reminder of how important relationships are when selling and buying homes. Real estate agents are therapists, negotiators, marketers, and paralegals all in one, and they’re paid on a performance basis only.
2. The right value for the right house. Zillow’s Zestimate valuations, though easily accessible to the novice buyer and seller, mismanage expectations with 30% variances in both directions. Doing that across the country without knowing all the nuances of what is happening in each community is a fool’s errand. Even in this historic appreciating market, it was never going to work.
3. A few good men (and women): Labor and supply shortages have been well documented. Even if you were a contractor by trade, inconsistency with material and employee availability made a hard job harder. Zillow was having to hold onto homes longer while dealing with an unreliable workforce and surging costs.
Though Zillow has been a sore subject for realtors, their failed attempt at iBuying is not something to celebrate. It’s easy to understand the validation agents feel right now, but it’s important to remember that Zillow ending their home buying efforts was a business decision based on overpayment for homes and properties, not because consumers were unhappy with their product.
Zillow’s clientele isn’t interested in what we know as a traditional buying or selling experience. What are they looking for and how can we give it to them is the question we should be asking?
In a competitive business, like Real Estate, few will mourn the loss of a big box competitor like Zillow. I believe this is an opportunity to assess the way we help our clients buy and sell homes. Can we make the process faster? Smoother? Cheaper?
My promise to all of you is that we’re going to keep doing our part. I wake up every morning thinking about how we can make home financing faster, easier, and less expensive for our shared clients. It starts with relationships and referrals then ends with going out of our way to ensure a 5-STAR experience.
Thank you for allowing us to be your choice mortgage broker and have a great week!
President & CEO, Hall Financial