Sellers checking their home’s Zillow listing will see a home-purchase quote, part of Zillow Offers, which the company says made about $20K profit per home in 4Q 2020.
SEATTLE – Homeowners across the country will soon see a live offer through Zillow’s home buying and selling website platform, replacing the “Zestimate.”
A live offer is essentially Zillow’s initial offer for a home, while the Zestimate is an automated valuation model that attempts to estimate what the home might get on the open market.
Nearly three years after it launched its direct-to-consumer home buying and selling platform Zillow Offers, the company is finally making money on each home it buys and subsequently sells, according to the company’s fourth-quarter earnings report. In a letter to shareholders, Zillow revealed it made, on average, a return of $19,206 per home sold in the fourth quarter of 2020.
Zillow Offers’ strong performance was attributed to a number of factors, including stronger-than-expected home price appreciation, a higher portion of homes sold that were acquired recently, and improved operational rigor across the business.
The company is also reaping rewards from the closing services division it launched in late 2019. The division expanded to 25 markets in the past 12 months, and the vast majority of the company’s customers now use that in-house closing service.
The increased profitability doesn’t reflect the ongoing migration from having partner agents manage Zillow Offers transactions to managing them in-house with licensed agent employees. The company began making that change recently – in the first quarter of 2021.
Source: Inman (02/10/21) Kearns, Patrick
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