Zillow shifts out of the home selling business

Shutting down its Zillow Offer Program

The real estate marketplace Zillow has recently announced that they are shutting down its Zillow Offer Program, which is their home buying program that makes selling individual's house with little to no stress.

After just a day of reports surfacing that recent report that Zillow had to sell over 7,000 homes that they purchased with the intention of selling them to new home buyers. Zillow in a recent press release has stated that the Zillow Offer program served only a small portion of their customers and that they have "determined the unpredictability in forecasting home prices far exceeds what we anticipated and continuing to scale Zillow Offers would result in too much earnings and balance-sheet volatility.”

The company is trying to grow the program but found the scale of growth that they hoped for was "risky" and would provide little opportunity for the company's return of equity. The shutdown of the program will affect Zillow by the company will now be reducing their estimated values of homes that they have purchased during their third quarter (Q3) or their upcoming fourth quarter (Q4) purchases.

It will affect Zillow by shifting their focus towards their core business which is providing individuals who are looking to buy a house to browse houses that are on the market and be able to get a pricing estimate for them. Besides the estimated values of homes being affected as well as the shift in the company's focus, the shut down of the Offer program will cause about 25% or 2,000 employees to lose their jobs.

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