As Zillow has moved into iBuying, investors and realtors across the nation could potentially miss out on listings and opportunities to acquire properties direct from homeowners. Essentially, Zillow’s algorithm is making offers to owners who list homes on their site below market value and then buying these FSBO (For Sale By Owner) homes before other investors have a chance to make a competitive offer.
Zillow quickly re-lists the property at a higher amount to capture the profits. This has some concerning implications. For one, many realtors who market to FSBOs as a means of ultimately listing properties or earning a commission if they have a buyer, will now miss out on these opportunities. For a company that has made a living on the backs of agents paying for ads, I’d say it’s time to evaluate if Zillow has agents’ best interests at heart. Fundamentally, they are no longer helping to solve problems for realtors and are creating an even bigger problem by competing with us for seller leads.
Zillow is ultimately going to drive values up, as they quickly re-list these properties for significantly more using their data and algorithms for pricing. In some cases they may be able to essentially “steal” a home from a seller and capture the profit for themselves rather than allowing the seller to benefit from a marketplace where buyers can compete for their property. Zillow is too big to care about individual realtors and sellers, and this is why for years I called them out as the pimps they are. They pimp listings for profit! Now, they are “stealing” homes from hardworking Americans!
