Zillow Tried To Screw Homebuyers...Got Screwed Themselves

There is increasing talk in Congress of banning corporations from buying single family homes. This market is primed for regulation.

Zillow tried to scam me. I asked for an offer from them to buy my house and they gave me a lowball offer (60% less than it was worth). I obviously said no, but after I rejected their offer, their "Zestimate" of my house, you know, the public estimated value of my house that prospective homebuyers see when they research the property, dropped from $720,000 to $220,000 (they offered me $250,000). If I had actually been trying to sell my house, this could have made me unable to do so because Zillow LIED and said my house was worth so little. I know the Zestimate is BS but that's what your average home buyer has to go by. Zillow was basically trying to make it so I HAD to accept their scam of an offer because their artificially low Zestimate value would have scared legitimate buyers away. This company should be completely dissolved and the owners put in prison.

So they set the standard for looking up average pricing in neighborhoods to help buyers, then they bought a bunch of real estate, inflated the value of property in the area and tried to cash in on an overinflated value set by themselves....did I get that right? That sounds like a case of very obvious market manipulation, shouldn't they be defending themselves in court at this point? I feel no sorrow for Zillow, the top end should be fighting not to go to jail and should be fined into the dirt.

F Zillow, they're "Zestimate" is part of the reason why Housing is still way too overpriced

I do not feel sorry for Zillow.

Zillow let their competition takeover. Their site used to be good until they let people delete the sales history of properties and relist properties over and over without showing they had already been listed.

There was about 18 months there where Zillow was buying everything that hit their math targets per square foot, without regard for very localized external traits. These houses were "unsellable" because of things like: trashy neighbors, on a busy street, next to commercial/industrial lots, criminal activity, etc. We sold one of our rentals to Zillow in early 2019. This house couldn't attract quality renters due to a persistent drug house next door. Zillow offered us about 1% under the median square foot price, and we jumped at it.

The part that Zillow agreed to offload their homes but to INSTITUTIONAL INVESTORS is pure evil 100%. These homes should never be owned or even temporarily held by investing firms.

Zillow learned the hard way what the rest of us already knew, which is that the Zestimate was a really flawed estimate with little relation to reality. By simplifying the selling process down so much, most of the sanity checks went out the window.

Zillow sounds like it should be the name of a pillow company

Oh no I feel so bad for the billionaires who were trying to pray on average people 😢

As a Realtor in the Houston Area, if your agent is using Zillow, other than for marketing—you need a new agent. Since the pandemic house prices went up largely in part to “algorithms” like mentioned. Once a property is sold at “higher market value” it’s hard to tell your seller to sell it for less even if the reason: disruption the housing market can trickle down negatively. Conversely, agents did have incentives to get homes sold for higher. But here we are. I understand we needed to bounce back from the stagnant COVID market (some not others) but, driving prices up for houses/apartments (places we need for survival) is/was devastating for everyone. I think using algorithms for things like: housing food vehicles— is evil.

And because Zillow artificially inflated home values in my state...that is the number that the county assessors used when levying our property taxes. So now we're getting scr...ed by the state when we didn't even sell!

Gen Z has almost no chance in buying a home anytime soon. Rent of shoebox rooms cost more than mortgages of a decent house just a few years ago. Inflation and interest rates are skyrocketing. Wages are simultaneously shrinking in proportion. College degrees are the least valuable they ever have while costs are at an all time high. We're fucked.

Zillow bought 2 homes in my neighborhood 4 year's ago. One for 566K they resold 11 months later for 528K plus paid for minimal fix-up ( paint, fixtures ) and lawn care. The other one they paid 440K and probably paid 150K in renovation costs and sold it 18 months later for 542K. Today those houses would sell for 610K with Zillow value 630-640K. You gotta get damn lucky to make a profit when you start the transaction 50-60K in the hole.

As someone who worked at one of those 4 companies and was let go when the market was correcting. It was a wild ride… that’s for sure.

I live in most competitive housing market, Realestate agents use same approach as Zillow to make offer, they look at SqFt, no of bed/bath, lost size of recently sold homes and come up with a number, and most of the time they don’t even negotiate with sellers, they even push buyers to pay more than market value.

The fundamental thing that makes massive corporations less successful than local experts is fungibility. The concept that you can freely substitute between different examples of the same kind of thing is crucial to money, the norm for stocks and bonds and the ideal for commodities. On the flip side, segments like used cars and houses all have their own stories that affect the value of specific examples, so the coarse data-driven operations of companies that can't grasp the fine example-specific details are unable to adjust to the realities a local expert can see, resulting in self-inflicted information asymmetry.

Algorithms. Nothing ever went wrong putting all eggs in that basket. 🤦‍♂️

This is a business that should not be legal.