By Nancy Pieper
Over a week ago Zillow announced it was exiting its home flipping business. Am I surprised? Absolutely not. Why? Because good agents know that you cannot commoditize the buying and selling of people’s homes.
It’s just way too personal of a transaction. You are dealing with the largest asset a family will every own, who may have raised a family there. Getting out “fast and cheap” just doesn’t feel good. Nor should it. No one wants to watch Zillow flip their home for $40k more than what they sold it for, after slapping on some paint and filling some nail holes.
Although Zillow didn’t like to be called a home flipper, it had spent the past three years building out an operation that aimed to simplify the buying process and, eventually, make money (aka home flipping). The hope was the company could leverage its high-tech pricing-algorithms to dominate the space. But the company had cited labor shortages and a lack of builders to fix up the properties it bought as the rationale for ending its home purchases.
Does this sound like a commercial for a real estate agent? It should. Because great agents bring so much to the table – they bring a team who can do repairs, painters and other craftsmen that can maximize your home’s sale price. Great agents have relationships with other agents. There is always a buyer and a seller. It takes two to tango as they say!
So Zillow’s financial models failed, and was left holding the bag. They now have 7000 homes that they are trying to offload to institutional investors. Why not sell to people looking for a place to live? Because institutional investors can buy large blocks of homes and get Zillow out of the market – FAST. House flippers to the bitter end…
Nancy Pieper was a Flower Mound resident for 30 years and currently resides in Lantana. A Realtor for close to a decade, she is a a 1% top producing real estate agent in the DFW Metroplex. Learn more about her here.
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