The death of Zillow 2.0

The most common refrain I hear from people who are long on iBuying is that the end goal isn't about flipping houses. They say it's really about companies like Zillow or Opendoor establishing a marketplace through which they can digitally package services like home financing, title/escrow and concierge services.

Was this newsletter forwarded to you? Sign up here. Good afternoon —   The most common refrain I hear from people who are long on iBuying is that the end goal isn't about flipping houses. They say it's really about companies like Zillow or Opendoor establishing a marketplace through which they can digitally package services like home financing, title/escrow and concierge services. If it's easy, convenient and reasonably priced, homebuyers and sellers will pay those fees. And the old way of doing things will disappear. There's logic to that.    For the iBuyers to establish themselves as viable businesses, they have to be darn good at all of those components, especially valuation. But if those companion services are tethered to a failed valuation model, as is the case for Zillow, what becomes of them?    Plenty of companies that only do mortgage or title & escrow or appraisal/valuation fail to persevere through cycles of the housing market. Even during its best-ever quarter, Zillow's mortgage business generated $70 million in revenue and lost $6 million. Pretty much every other mortgage company out there made money in the third quarter. (Even the embattled LoanDepot, for example, reported a $154 million Q3 profit.) None of the iBuyers have yet cracked the code on mortgage or title and escrow, though it should be noted that Opendoor and Offerpad also insist Zillow's problems were isolated to Zillow. What do you think the future holds for iBuying? What will Zillow 3.0 look like? Please share your thoughts with me at jkleimann@housingwire.com.   James Kleimann Managing Editor, HousingWire Logan Mohtashami on Zillow's imploding iBuying business Real Estate Logan Mohtashami on how Zillow destroyed its iBuying business and why home prices will not decline for a while. Listen now Zillow to kill its iBuying program Brokerage Zillow CEO Rich Barton announced Tuesday that his company is exiting the iBuying business, a mind-boggling about face that completely changes Zillow's business model and will result in the loss of about 1,605 jobs. Looking to increase production and recapture more business? Data shows only 18% of refi borrowers stay with a servicer. Boost retention and recapture with Black Knight's Capture℠ lead analytics platform. The solution helps you identify actionable leads and outperform competitors. Get Started → Sponsored by Black Knight Citigroup taps into the red-hot reperforming loan market Mortgage, HW+ Exclusive Content Citigroup's RMBS arm in 2021 has securitized some 45,000 reperforming loans valued at $6.8 billion through five private-label offerings. And they are truly scratch-and-dent loans. How servicers can access timely, accurate data insights Presented by CoreLogic Learn how to effectively navigate the challenges in today's market – for example, the need for ongoing, on-demand access to near-real-time data and the ability to access those data insights in a timely and accurate manner. HousingWire, 433 East Las Colinas Blvd., Suite 830, Irving, TX 75039 Manage preferences

Share this

Share on FacebookPlus on Google+