Last week, Zillow Group said that it was going to invest more in its Zillow Offers service. Zillow Offers allows consumers to sell homes to Zillow. This announcement was revealed in the company’s fourth-quarter results. Zillow also announced that there will be a shuffling of the company’s co-founders. Zillow CEO Spencer Rascoff will be stepping down from the head position and will be retaining his board seat. Zillow co-founder Rich Barton is now taking the CEO role.
Barton is known for launching Expedia while working at Microsoft in 1994. Then he spun Expedia out and turned it into a public company in 1999. Barton is also known for being the brains behind the employment platform Glassdoor.
Zillow revealed that the Zillow Offers business could add $20 billion in annual revenue for the company over the next 3-5 years. “I see lots of parallels here as we take Zillow Group into the next phase with what we saw at Netflix when we moved from DVDs by mail to streaming and then to originals,” said Barton on a conference call via MarketWatch. “It’s that kind of change.” Barton is a Netflix board member.
Launched in April 2018, Zillow Offers enables homeowners who want to sell their property to receive an offer from Zillow based on the home value. Zillow then sets a goal to buy, renovate, and resell the homes in about 90 days or less. And Zillow believes it can buy about 5,000 homes per month and originate 3,000 loans per month — which would achieve an annual segment revenue of $2 billion and more than double the size.
However, Zillow has a long way to go in order to achieve these goals. Zillow purchased 686 homes ever since Zillow Offers launched. However, only 177 have sold — of which 141 of those happened in the fourth quarter. Currently, Zillow Offers is available in seven markets across the country and the company is expecting this to expand to fourteen by the end of the year. To scale the business, Zillow is partnering with real estate agents.
