At the beginning of the month, Zillow made a huge announcement regarding their “iBuyer” program.
The business plan and algorithm that Zillow planned to use to purchase and resell homes completely failed them.
The plan involved utilizing an algorithm to price homes to purchase directly and resell all through their website used by millions of homebuyers. However, they were unable to predict the volatility in housing prices. Zillow’s founder Rich Barton said, “We’ve determined the unpredictability in forecasting home prices far exceeds what we anticipated”.
As much as real estate agents appreciate Zillow for giving their buyers unlimited access to homes, we’ve started butting heads with the company in the past year with the changes they’ve been working towards.
Zillow’s failure to automate the homebuying process only goes to show the importance of having an experience, professional human on your side through the transaction of buying or selling a home. A computer just can’t do what we can do!
With all the nuances that go into just pricing a home, that’s just the tip of the real estate iceberg!
- The Zillow Machine has never been inside your home.
- The Machine can’t understand the location and perks of your neighborhood.
- A “Zestimate” is a numerical calculation from limited data. The data is important but only part of the formula we use to price a home.
What we’ve learned from the Zillow failure is this: