{"id":24555,"date":"2026-04-27T08:30:44","date_gmt":"2026-04-27T08:30:44","guid":{"rendered":"https:\/\/incredipros.com\/?p=24555"},"modified":"2026-04-27T08:30:44","modified_gmt":"2026-04-27T08:30:44","slug":"what-zillows-exit-from-ibuying-means-for-you","status":"publish","type":"post","link":"https:\/\/incredipros.com\/?p=24555","title":{"rendered":"What Zillow\u2019s Exit From iBuying Means for You"},"content":{"rendered":"
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Whether you do sales for a living or have ever tried selling Girl Scout Cookies, you know selling is hard. And selling something as big as a house is even harder.\n <\/p>\n

That\u2019s why online real estate companies like Zillow started \u201ciBuying\u201d services that make cash offers to home sellers who want a simpler, faster way to sell their house\u2014if possible\u2014at the click of a button.\n <\/p>\n

But is selling your house to an iBuyer worth it? Let\u2019s unpack what exactly is iBuying, how it works, why Zillow is leaving the iBuying market and what that could mean for you.\n <\/p>\n

What Is an iBuyer?<\/h2>\n

First, instant buyers<\/em> (or iBuyers<\/em>) are real estate companies like Zillow, Opendoor and Redfin that use cash to instantly buy homes from private sellers, then attempt to resell them for a profit. If you\u2019ve never heard the term before, you\u2019re not alone\u2014less than 1% of home sellers use iBuyer programs.1<\/sup>\n <\/p>\n

Why Is Zillow Leaving the iBuying Market?<\/h2>\n

In November 2021, Zillow announced its plan to shut down Zillow Offers<\/em>\u2014their iBuying service. The reason for this is because the \u201cunpredictability in forecasting home prices far exceeds what we anticipated,\u201d reported Zillow Group co-founder and CEO Rich Barton.2<\/sup>\n <\/p>\n

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Keep in mind, the housing market has been wildly unpredictable\u2014especially since the pandemic. The number of homes available for purchase have been at a historical low. Mix that in with the extremely high buyer demand and you\u2019ll get why home prices have been shooting up like crazy.\n <\/p>\n

Meanwhile, in an attempt to catch up with top iBuying competitors like Opendoor, Zillow started rapidly increasing the number of homes they were purchasing for resale. To outbid the competition, Zillow adjusted their digital home valuation tool (Zestimate) to make higher, more attractive offers on homes\u2014which, as you can imagine, made sellers very happy.\n <\/p>\n

Here\u2019s the Bad News<\/h3>\n

This gets pretty scummy when you think about it: With housing inventory looking like a desert wasteland and home prices shooting up like fireworks, in comes a big tech company with massive cash offers to swallow up even more<\/em> of the inventory! This completely bulldozes real<\/em> people dreaming of becoming homeowners.\n <\/p>\n

And that\u2019s not all.\n <\/p>\n

A large part of iBuying is flipping the homes for resale. But supply-chain and labor issues are slowing down renovations. So Zillow was having trouble getting the massive number of homes they purchased back on the market fast enough\u2014which led to huge revenue losses. And that brings us to Zillow\u2019s decision to exit the iBuying business.\n <\/p>\n

How Will This Impact the Housing Market?<\/h3>\n

Overall, closing down Zillow\u2019s iBuyer division is expected to take several quarters and will mean the loss of around 2,000 jobs\u2014a 25% cut of its employees!3,4<\/sup>\n <\/p>\n

Word on the street is that Zillow plans to offload the 7,000 remaining homes they purchased as an iBuyer for $2.8 billion.5<\/sup> About 2,000 of those homes will be sold to an investment firm that plans to use them as rental properties.6<\/sup>\n <\/p>\n

Did you catch that? In a housing market already starving for inventory, there\u2019ll be 2,000 less homes available for house hunters who actually want to become homeowners!\n <\/p>\n

And even when an aspiring homeowner finally finds a house they want, the home prices in those markets will probably rise so fast that they\u2019ll be priced out of the market. Like we said, scummy.\n <\/p>\n<\/p><\/div>\n

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What Is a Zestimate?<\/h2>\n

Remember, Zillow\u2019s Zestimate is the tool that misinformed the company on what to pay for the homes they purchased. A Zestimate<\/em> is just a computer-generated \u201cbest guess\u201d at how much your home is worth\u2014and what Zillow is willing to pay for it as an iBuyer.\n <\/p>\n

Be careful not to confuse a Zestimate with a home appraisal. A home appraisal is your local government\u2019s official estimate of the value of your home. If you choose a non-cash buyer to purchase your home, they\u2019ll be required to get an appraisal before a lender approves them for a mortgage.\n <\/p>\n

Are Zestimates Accurate?<\/h3>\n

In May 2021, Zillow reported that their Zestimates for off-market<\/em> homes were within 7% of the selling price, while on-market <\/em>homes were within 2% of the selling price.7<\/sup>\n <\/p>\n

So suppose you sell your house for $300,000. Before you put it on the market, Zillow\u2019s Zestimate might\u2019ve priced it at $21,000 more or less than that\u2014yikes!<\/em>\n <\/p>\n

Now imagine an algorithm trying to maintain the same level of accuracy at predicting home prices while Zillow rapidly increases its purchases in this roller coaster housing market\u2014and you\u2019ll start to see more clearly why the company wants out of the iBuying business.\n <\/p>\n

How Are Zestimates Calculated?<\/h3>\n

To craft a Zestimate, Zillow uses a fancy formula it came up with that churns out a home price based on real estate information from several forms of data, including:\n <\/p>\n