Skip to main content

Zillow Closing Zillow Offers, Laying Off Staff

Nov 03, 2021
Zillow Logo

After pausing purchases by its home-buying unit, Zillow says it will wind down the business.

KEY TAKEAWAYS
  • Company says it will lay off 25% of its staff as it eliminates Zillow Offers.
  • Zillow will look to sell off 7,000 homes for $2.8 billion.

Zillow is getting out of the home-flipping business.

As it reported third-quarter earnings Tuesday, Zillow Group Inc. announced it will “wind down” Zillow Offers, the company’s iBuying service.

Zillow had announced last month that Zillow Offers — which buys, renovates and sells homes — would not sign any new contracts to buy homes through the end of the year, citing a backlog in renovations and “operational capacity constraints.”

Tuesday, that pause in home-buying became permanent.

"We've 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," co-founder and CEO Rich Barton said Tuesday. "While we built and learned a tremendous amount operating Zillow Offers, it served only a small portion of our customers.”

Barton said Zillow’s core business and brand are strong, “and we remain committed to creating an integrated and digital real estate transaction that solves the pain points of buyers and sellers while serving a wider audience."

Zillow said winding down Zillow Offers will take several quarters and will include laying off about 25% of the company’s staff.

"The most difficult part of this decision is that it will impact many of our colleagues," Barton said. "This is not something we take lightly. We are grateful for their efforts, and we are committed to providing a smooth transition."

The Zillow Offers unit has bought and sold houses in dozens of markets nationwide over the past three years. In the second quarter of this year alone, the company bought 3,800 homes. Bloomberg reported Monday that Zillow is looking to sell 7,000 homes and hopes to raise approximately $2.8 billion from the sales.

Meanwhile, Zillow reported a consolidated net loss of $328 million in the quarter ended Sept. 30, 2021, compared to net income of just under $40 million in the same quarter a year earlier.

It reported consolidated third-quarter revenue of $1.7 billion, up 164% from $656.7 million in the third quarter of 2020.

Other highlights of the earnings report include:

  • IMT segment revenue growth of 16% year over year to $480 million, and Premier Agent revenue growth of 20% year over year to $359 million, both within the company's third-quarter outlook ranges.
  • Homes segment revenue of $1.2 billion, below the company's third-quarter outlook of $1.45 billion at the midpoint of the range, due primarily to renovation and resale capacity constraints.
  • Mortgages segment revenue growth of 30% year over year to $70 million, exceeding the high end of the company's outlook range.

In addition, Zillow said the results include a write-down of inventory of approximately $304 million within the Homes segment as a result of purchasing homes in the third quarter at higher prices than the company's current estimates of future selling prices. It said it further expects an additional $240 million to $265 million of losses to be recognized in the fourth quarter.

About the author
David Krechevsky was an editor at NMP.
Published
Nov 03, 2021
Rocket Pro And Vetted VA Join Forces

What started as a Facebook group now educates 100K+ veterans monthly — Vetted VA and Rocket Pro working to bring ethics, clarity to a broken system

Jun 17, 2025
MBA Urges Shift To Single Credit Report Model, Citing Cost Savings And Efficiency

MBA says tri-merge credit checks cost lenders up to $100 per loan, doubling since pre-COVID, as industry pushes for a cheaper, single-report model

Jun 16, 2025
Fairway Acquires Hallmark Home Mortgage Through Asset Purchase

Hallmark to become new Fairway division, gets access to Fairway's Fairway's product portfolio, tech, and support resources

Jun 13, 2025
Trigger Leads Bill Clears Senate

Final push now left to House; reconciled bill needed next

Housing Market Outlook: Brighter Days To Come

NAR Chief Economist Yun calls lower mortgage rates ‘magic bullet’ to boost home sales

Jun 11, 2025
Redfin Shareholders Say Yes To Acquisition By Rocket

Nearly 99% of Redfin shareholders vote to approve merger, though fewer vote yes to compensation for company’s execs

Jun 10, 2025