Zillow’s New Insight on the Unit Economics of the iBuyer
To this point, we assumed that the iBuyer model would target homeowners willing to pay for convenience and that the average consumer would continue to employ a real estate agent—and earn more money for their patience. But Zillow’s Q4 numbers reflect that homeowners can actually make MORE selling to the platform than they would with a realtor. So, how does this information impact the potential market share of iBuyers moving forward? And how will it affect the way agents do business?
Today, Rob and Greg are discussing the change in leadership at Zillow, debating the company’s performance under Spencer Rascoff and Richard Barton’s motivation to return as CEO. They explore the possibility of a merger between Opendoor and Zillow, uniting the former’s mastery of workflow with the latter’s proficiency at lead flow.
Rob and Greg also speak to Redfin’s potential to adopt the iBuyer model and the way of thinking shared by Redfin and Opendoor. Listen in to understand the full implications of Zillow’s Q4 iBuyer unit economics learn how the iBuyer market may impact the industry in light of this new information.
What’s Discussed:
Barton’s motivation to return to Zillow as CEO
Zillow’s performance under Rascoff’s leadership
Opendoor’s complementary mastery of workflow
Zillow’s hiring of Arik Prawer to run iBuyer operations
The shared philosophy between Redfin and Opendoor
The implications of Zillow’s Q4 iBuyer unit economics
How iBuyer unit economics may impact realtors
Connect with Rob and Greg:
Resources:
‘Homeowners Net More Selling to Zillow Than with a REALTOR’ in Notorious ROB
‘Spencer Rascoff Out as CEO of Zillow’ in Vendor Alley
Mike DelPrete’s Presentation at Inman Connect
Our Sponsors:
Great podcast guys
Redfin+Opendoor makes a lot of sense. Redfin is in extremely few markets, just dipping their toes, unlike Zillow who is aggressively expanding markets. Redfin would gain a lot more immediately by joining with Offerpad or Opendoor.
Maybe I’m not getting the finance aspect from Rob’s point of view. So, 50 to 60 percent of the residential market will be iBuyer at some point?? In part because Zillow $1 Billion in cash lying around.
The current value of residential real estate is roughly around five to six Trillion dollars per year in closed sales. Where does the money come from? Who finances 2.5 to 3 Trillion dollars? That is a lot different than Zillow having $1 Billion dollars to buy homes.
I’d LOVE to see that explanation. Like I said, I’m just a simple realtor and maybe not getting the financing angle of it. 🙂
Fun podcast to hear by the way.