The Real Reason Zillow Stopped House Flipping.

Zillow has recently made an announcement that they will stop flipping houses. The reason behind this decision is quite simple: inspectors, contractors, and agents who perform these roles are overworked. Due to the overwhelming demand, Zillow has recognized the need to address the workload before continuing to purchase new homes. As a result, Zillow has decided to take a step back to manage the homes it already has. Here are some of the key reasons why Zillow has stopped flipping houses:

Overworked inspectors, contractors, and agents: Inspectors, contractors, and agents who perform these roles are overworked, which leaves little room for quality control and oversight of each project.

Managing current assets: Zillow has an extensive portfolio, and managing the current assets is a crucial aspect of ensuring success in the long run. The company wants to address the workload before continuing to purchase new properties.

Financial implications: The decision to stop flipping houses caused Zillow’s shares to close down by 9 percent. While Zillow has been investing in improving its technology and real estate services, the announcement has impacted the company’s financials.

In conclusion, Zillow has made a wise decision to stop flipping houses. By focusing on managing the homes it already has, Zillow can ensure quality control and oversight of each project. The decision may have impacted the company’s financials, but it’s essential to remember that taking a step back is often necessary for long-term success.

Why Did Zillow Stop Flipping Houses?

Zillow’s Decision to Stop Flipping Houses

Zillow, the popular real estate website, made an unexpected announcement in 2018 that it would stop buying homes through its Instant Offers program, ending their experiment in the iBuying market. Zillow’s Instant Offers program allowed homeowners to receive all-cash offers for their homes with the option to close the sale quickly. The reasons behind Zillow’s decision to stop flipping houses relate to the challenges that came with managing these types of properties, especially when it came to working with overworked professionals in the home industry.

Overworked Professionals in the Home Industry

The people who perform these roles – inspectors, contractors, and agents are overworked, and Zillow was forced to stop purchasing new homes until it was able to manage the homes it already has. Zillow Real Estate Group President Greg Schwartz said in a statement, Selling a home is an incredibly complex transaction, involving many different people and companies over an extended period of time. Our goal was to provide sellers with a more transparent and efficient experience, but we have seen from our own experience in the market that there are complexities within the space that can’t always be anticipated.

Zillow’s Struggle to Manage Existing Homes

Zillow’s decision to buy homes cash had many advantages. It allowed homeowners to sell quickly to a reputable buyer, it reduced the time it took for a home to be sold, and it complemented Zillow’s existing businesses. However, with owning the homes came the added responsibility of managing them. Zillow struggled to manage the properties, especially in terms of maintenance and repairs. Zillow relied on brokers and contractors to make repairs, which was complicated with many properties.

• Zillow found managing homes was more difficult than originally anticipated
• The company struggled with maintenance and repairs on their own homes
• Using brokers and contractors to complete repairs proved to be complicated

Zillow’s Hiatus on Purchasing New Homes

Zillow’s decision to stop flipping homes did not come out of the blue. In fact, the company had already experienced a slowdown in the pace of flipped homes. Zillow stopped buying properties in late 2018 and did not resume until late 2019. The pause was needed for Zillow to focus on better managing the homes they already had.

Impact of Zillow’s Decision on the Company

Zillow’s decision to stop flipping homes had an impact on the company. Zillow’s stock price dropped after the announcement, and the company’s fortunes suffered several quarters of decline. However, Zillow was able to bounce back after selling more than 414 homes in 2019, an increase from 177 homes in 2018. Zillow now concentrates on selling real estate data and selling leads to real estate agents.

Shareholders’ Reaction to the News

The news of Zillow’s decision was not well-received by its shareholders, with shares of Zillow closing down 9 percent on the day after the announcement was made. Zillow’s stock would continue to be volatile, and investors watched closely as Zillow began selling off properties it had acquired.

Future Plans for Zillow’s Involvement in Home Flipping

Zillow’s decision to stop flipping homes happened as a result of not being properly equipped to manage the properties they were acquiring, rather than a commentary on the entire concept of flipping homes. The company has since resumed the program. While it remains to be seen if the company will ever acquire as many homes as it did in the past, it’s clear that Zillow will continue to look for ways to play a major role in the real estate industry. In conclusion, Zillow’s announcement to stop flipping homes was not a hasty decision but one that had to be made. Zillow encountered many obstacles in managing properties they could not predict. Zillow’s decision impacted many areas of the company, and shareholders were not thrilled with the announcement. Going forward, Zillow will resume its role in flipping homes, though likely in a more measured approach.