The potential losses highlight the risks of the iBuyer business, which aims to buy and resell properties for a profit in a roller-coaster market.Īfter purchasing 5,661 homes across 25 metropolitan areas from Austin to Tucson since the beginning of 2021, Zillow announced on October 17 that it would stop buying homes for the remainder of 2021. Out of 155 homes, 104 - or 67.1% - were priced below what Zillow paid. Insider reviewed all the homes for sale by Zillow in the Minneapolis-St. It then fixes them up and resells them - along with services like mortgages and title insurance – for a profit plus additional fees. It has attracted sellers by allowing them to receive an offer almost immediately and offload their property almost entirely online. The iBuyer division, called Zillow Offers, uses artificial intelligence to help determine the prices it pays for homes. The $20 billion real-estate giant had embraced a strategy called iBuying, or "instant buying," until putting it on pause last month. Zillow is listing more than half of the homes it owns in its key cities for less than it originally paid for them, an Insider analysis found. The losses could point to larger issues for one of the biggest players in the hot "iBuying" space. We examined 155 Minneapolis homes Zillow is selling and found 67.1% listed for less than it paid.
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