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[godhandiscen]

Rumors started going around earlier this month that Zillow was struggling to flip homes, selling them online for less than they bough them for. Today. it was confirmed that they have a bag of 7000 homes which they cannot sell and are pitching to institutional investors for 2.8 Billion in order to stay afloat.

Zillow Seeks to Sell 7,000 Homes for $2.8 Billion After Flipping Halt

www.bloomberg.com

Also, later today during earnings release Zillow admitted to stopping all of their home flipping operations, and having to fire 25% of their employees to stay afloat. The loss in their home flipping gamble is estimated at $550 Million.

Zillow to stop flipping homes for good as it stands to lose more than $550 million, will lay off a quarter of staff

Zillow Group Inc. is calling it quits on the home-flipping business, while disclosing losses of more than $550 million on homes purchased in the second half...

www.marketwatch.com

This is great news for individual home buyers as it will hopefully stagnate the rising price of houses.

 

[Pagusas]

I feel for the people who just lost their job, but Zillow is a horrible company and deserved this.

 

[GeekyDad]

...

 

[godhandiscen]

I feel for the people who just lost their job, but Zillow is a horrible company and deserved this.

Exactly. All of their massive gains post pandemic came from a shady price arbitrage that was hurting American society. Fuck them.

 

[StreetsofBeige]

How does Zillow have so many properties under water?

The real estate markets are skyrocketing the past year, and even moreso compared to 2, 3, 5 years ago.

Zillow bought tons of homes just recently at bidding war prices?

 

[Taxexemption]

How does Zillow have so many properties under water?

The real estate markets are skyrocketing the past year, and even moreso compared to 2, 3, 5 years ago.

Zillow bought tons of homes just recently at bidding war prices?

My understanding is they had an algorithm making most of the decisions of what to buy sight unseen. Or at least some youtubers who do financial news are reporting that. More interestingly Zillow is one of several corporations doing this, so there may be more in the works.

 

[StreetsofBeige]

My understanding is they had an algorithm making most of the decisions of what to buy sight unseen. Or at least some youtubers who do financial news are reporting that. More interestingly Zillow is one of several corporations doing this, so there may be more in the works.

Yikes.

I'm hoping someone sheds light on the algorithm. Time to reprogram that bot!

 

[godhandiscen]

How does Zillow have so many properties under water?

The real estate markets are skyrocketing the past year, and even moreso compared to 2, 3, 5 years ago.

Zillow bought tons of homes just recently at bidding war prices?

Zillow’s pricing algorithm is awful, Redfin’s is even worse. They both overhype houses and are disconnected from reality.

 

[Bitmap Frogs]

Housing speculators going underwater? Sounds like a good time.

I mean sure sucks for people who lost their jobs, but on the other hand housing speculation does so much harm raising prices.

 

[PSYGN]

My girlfriend is no longer active in real estate but I heard a lot of the real estate agents hate them so they'll also be happy if for other reasons than the rest of us. So Zillow has made enemies with everyone

 

[poppabk]

I didn't even realize they were anything more than a listing aggregator.

 

[Pagusas]

I wonder how OpenDoor is doing?

 

[LordCBH]

Fuck Zillow and companies like it.

 

[zeorhymer]

So all the rumors about Zillow was artificially inflating housing prices more than it normally would was true.

 

[Punished Miku]

I didn't even realize they were anything more than a listing aggregator.

A listing aggregator with data on everyone's interests and salary who can corner markets if they want. Its actually a huge and relatively unknown issue.

 

[Hari Seldon]

Fuck em. Let them burn.

 

[poppabk]

A listing aggregator with data on everyone's interests and salary who can corner markets if they want. Its actually a huge and relatively unknown issue.

Seems like a massive conflict of interest but they still managed to fuck it up. Doesn't give much confidence in the services they still have.

 

[Thaedolus]

According to Zillow, I bought my house for $1 because my buddy/realtor hates them.

Their “zestimate” thing is garbage. I bet my house would need to list for 100k under what they say it’s worth

 

[AJUMP23]

I wish I could have sold them my house for more than what I did. But I had an offer over asking from the buyer before it was in the market.
But ya Zillow sucks.

 

[Maiden Voyage]

I feel for the employees but this shit should not be allowed.

 

[Rat Rage]

Get fucked you greedy basterds!

 

[SpiceRacz]

How does Zillow have so many properties under water?

The real estate markets are skyrocketing the past year, and even moreso compared to 2, 3, 5 years ago.

Zillow bought tons of homes just recently at bidding war prices?

My guess is they bought in the wrong areas. If most of those homes were in say, Arizona or Texas, I don't think they'd be having this problem right now.

 

[Aesius]

My guess is they bought in the wrong areas. If most of those homes were in say, Arizona or Texas, I don't think they'd be having this problem right now.

Many of them are in AZ.

 

[Tschumi]

did they rennovate the homes before selling them , or did they just bank on, like, their charistmatic staff making the sale or something?

 

[StateofMajora]

Hmm I thought the market was still going up or is it about to crash soon?

 

[Ionian]

Bought my house for 170k, worth over 400k now. After 10 years.

Suggested selling it to my Father, he said "but where will you live if everywhere is expensive?".

Dropped the idea immediately. He was right.

 

[Ionian]

Hmm I thought the market was still going up or is it about to crash soon?

100% there will be another crash. Will devestate any young buyer with a mortage unless if it's a variable by market price. Banks here are loaning like crazy again.

Maybe the EU will bail our banks out again.

Edit: meant 'fixed. Not variable'.

 

[StateofMajora]

100% there will be another crash. Will devestate any young buyer with a mortage unless it's a variable by market price. Banks here are loaning like crazy again.

Maybe the EU will bail our banks out again.

It is starting to sound like it might crash this year even. There’s definitely going to be a crash, question is when..

 

[Ionian]

It is starting to sound like it might crash this year even. There’s definitely going to be a crash, question is when..

I paid cash so covered, anyone who borrowed on a variable rate is super fucked. They should have paid attention to the last one.

 

[chromhound]

Fuck em. Can't afford a house these days

 

[ClanOfNone]

I JUST started the last year of a rental lease. With a little bit of luck the market will shit the bed in the next year and I'll be able to sneak into a decent condo someplace close.

 

[Ionian]

Fuck em. Can't afford a house these days

I actually need a tenant, wanna live in Ireland?

 

[Ionian]

I JUST started the last year of a rental lease. With a little bit of luck the market will shit the bed in the next year and I'll be able to sneak into a decent condo someplace close.

It's all rings and roundabouts. Rises, crashes and burns. Only to start again.

One hint I'll give you as a landlord is, if you're decent he will listen. He may not be, I've sorted many good tenants with a new place once they get married and had babies. I don't even own the place I live in. One dude is living in the city centre in an apartment for next to nothing. But he was decent, so I looked after him.

 

[SpiceRacz]

Many of them are in AZ.

Then they must have just overbid everyone. That makes no sense otherwise.

 

[StateofMajora]

I paid cash so covered, anyone who borrowed on a variable rate is super fucked. They should have paid attention to the last one.

Well a variable rate is still locked in for a few years even if there’s a crash right? Or am I ignorant of what happened in 2008?

IIRC my last one was locked for 7 years but I did that because I knew I would either pay it off before then or move.

I’m actually considering moving rn but to a cheaper house so i’d come out of this with profit.

 

[StreetsofBeige]

I paid cash so covered, anyone who borrowed on a variable rate is super fucked. They should have paid attention to the last one.

Good luck assuming numbnuts prepare for the inevitable.... rates going up. Home prices are in bidding war city and tons of people are surely maxing out their mortgage at low rates. All it takes is 2023 to come around and rates jump a full pt or two and half these people will spiral down the toilet like it's 2009 again. It's like a guy approved for a $50,000 credit card. He barely gets by right now, but has this urge to go the distance maxing it out just because it's there.

My mortgage is up for renewal next year. I doubt rates are going to change much. I'm locking in a 1.5% fixed rate for 5 years. Some paces have it at 1.35% (dont know how shady that deal is, but I know some people who locked in 1.5% this year). Cant get any lower than this and everyone keeps talking about rates going up as inflation and covid rebound are in full force in 2023. It'll be perfect timing.

Just hoping rates dont jump. I got about a 6 month gap.

At 1.5%, it's like free money. Back in 2006-ish when the oil crisis happened with oil at $100+, my variable jumped from 3% to I think 5.25% all in one year. Nuts. Then global crisis happened and it bombed back to 3%. lol

Well a variable rate is still locked in for a few years even if there’s a crash right? Or am I ignorant of what happened in 2008?

IIRC my last one was locked for 7 years but I did that because I knew I would either pay it off before then or move.

I’m actually considering moving rn but to a cheaper house so i’d come out of this with profit.

A variable rates adjusts as the lender's prime mortgage rate adjusts. This happens usually when the US Fed or Bank of Canada publicly states they are increasing or decreasing 0.25 or 0.50 pts. Then the lender will do something similar probably that week.

A fixed rate doesn't change for the term.

Then again, maybe the US is different. In Canada, we have 1, 3, or 5 year terms that need to be renewed. At that time you re-do the process Fixed or Variable at whatever rates are at the time or you negotiate. If you are on Fixed, that % rate doesn't change for the entire time.

 

[Ionian]

Well a variable rate is still locked in for a few years even if there’s a crash right? Or am I ignorant of what happened in 2008?

IIRC my last one was locked for 7 years but I did that because I knew I would either pay it off before then or move.

I’m actually considering moving rn but to a cheaper house so i’d come out of this with profit.

I meant static, corrected after. Variable rates is what had people declare bankruptcy here after the boom. My Brother included. He lost his house after a 110% loan with zero collateral. Banks even loaned him more when he asked.

Easy come, easy get homeless. Most pay, they write that shit off for tax. Got offered a job doing mortages, turned it down. I had done sales and Debt collection but saw this coming from a mile away. It's gonna happen again. People get stupid loans and get fucked. Even had adverts on bus stops here about 'woohoo, we'll give you a loan!'. Sickening.

 

[StreetsofBeige]

I meant static, corrected after. Variable rates is what had people declare bankruptcy here after the boom. My Brother included. He lost his house after a 110% loan with zero collateral. Banks even loaned him more when he asked.

Easy come, easy get homeless. Most pay, they write that shit off for tax. Got offered a job doing mortages, turned it down. I had done sales and Debt collection but saw this coming from a mile away. It's gonna happen again. People get stupid loans and get fucked. Even had adverts on bus stops here about 'woohoo, we'll give you a loan!'. Sickening.

Money lending (mortgages, credit cards, money marts) are all the same. They are great that they loan you money ASSUMING you're a responsible guy who can pay back on schedule.

Credit cards are fucking great assuming you dont have a balance at 22% interest. Hell, you buy shit, dont have to pay till next month's invoice and I even get about 1-2% cash back. As long as I buy stuff like a normal guy and pay it off every month, CC's are awesome.

But every lender always teases people to buy more shit with giant maximums people dont need. But some cant help it and cave in. They lose their job or rates go up or their balance gets too big for their income and they're fucked.

People can blame the company for teasing giant maximums, blame the person for being an idiot overspending, or both.

 

[Ionian]

Money lending (mortgages, credit cards, money marts) are all the same. They are great that they loan you money ASSUMING you're a responsible guy who can pay back on schedule.

Credit cards are fucking great assuming you dont have a balance at 22% interest. Hell, you buy shit, dont have to pay till next month's invoice and I even get about 1-2% cash back. As long as I buy stuff like a normal guy and pay it off every month, CC's are awesome.

But every lender always teases people to buy more shit with giant maximums people dont need. But some cant help it and cave in. They lose their job or rates go up or their balance gets too big for their income and they're fucked.

People can blame the company for teasing giant maximums, blame the person for being an idiot overspending, or both.

I'd agree with you but after the last crash, I saw outrageous amounts that nobody could pay. People bought houses and wondered why they were losing them.

Their fault obviously yet the lending was predatory. And here we go again. Once my credit card expired I put it in the bin, didn't need it and was sickened by what was going on. Debit only.

 

[StreetsofBeige]

I'd agree with you but after the last crash, I saw outrageous amounts that nobody could pay. People bought houses and wondered why they were losing them.

Their fault obviously yet the lending was predatory. And here we go again. Once my credit card expired I put it in the bin, didn't need it and was sickened by what was going on. Debit only.

Unfortunately, not enough people have financial sense to throw money lending offers in the garbage or accept ones that are reasonable for their budget. I've been using this basic budget tracker I made over 10 years ago on Excel 2007. So fucking old, I've transferred it to all my new laptops since.

I bet the average person puts more thought into buying a fridge or home audio system. Yet for some people, a slew of mortgage deals are sent to them to look at and they dont look at them, dont want to understand them, and unless a mortgage broker sits down with them to explain each line, they have no idea what they are signing up to. All they probably know is how much to pay per month and that's it. They have no clue on adjusting rates, penalty fees, paying it off faster mean less interest paid overall etc....

Right off the bat, a lot of people are losing money right away by being a walk up.

The best deal you can reasonably get is have a broker sift out deals for you and you choose which is best. Anyone who just walks into a bank, looks at the sign with posted rates and signs a deal is probably paying a good 0.50 - 1% more than they should. Banks love walk ups.

 

[Cyberpunkd]

Yikes.

I'm hoping someone sheds light on the algorithm. Time to reprogram that bot!

Or, you know, do it the old fashioned way with correctly appraising and evaluating property and then putting it on sale?

Ah fuck, I forgot if we want that VC money we are a tech company now - ok, let’s go coding guys!

 

[Hari Seldon]

I am like super curious did they have an automated system to contract out work to actually flip these houses? I could imagine that being a complete disaster and/or a recipe for a gigantic amount of fraud.

 

[ResilientBanana]

Good, that's what you get for falsely stimulating the housing market.

 

[Taxexemption]

I am like super curious did they have an automated system to contract out work to actually flip these houses? I could imagine that being a complete disaster and/or a recipe for a gigantic amount of fraud.

From zillows website

Zillow iBuyer Program Details | iBuyer.com

The Zillow Offers iBuying program has shut down and they have partnered up with Opendoor for quick sales.

ibuyer.com

"Zillow Offers is an iBuyer program or instant home-buying program. It offers you an easier way to sell your home without even listing it. Instead of the traditional selling steps, Zillow Offers makes cash offers on homes online, without even seeing them."

They were buying houses they had not seen so they had no way to know what the condition was or what contract work would be needed. I think that is the big problem, probably they dispoportionately bought houses in need of major repairs or that had remodeling without pulling a permit or something else that would make it hard to sell. This is particularly problematic when right now its hard to get contractors.

 

[SlimySnake]

Does the 25% workforce include the 100% of executives including the CEO who decided on this approach?

I know the answer but imagine being the CEO of a real estate firm during one of the biggest housing booms in the last 30 odd years and still lose $500 million.

 

[Ionian]

Unfortunately, not enough people have financial sense to throw money lending offers in the garbage or accept ones that are reasonable for their budget. I've been using this basic budget tracker I made over 10 years ago on Excel 2007. So fucking old, I've transferred it to all my new laptops since.

I bet the average person puts more thought into buying a fridge or home audio system. Yet for some people, a slew of mortgage deals are sent to them to look at and they dont look at them, dont want to understand them, and unless a mortgage broker sits down with them to explain each line, they have no idea what they are signing up to. All they probably know is how much to pay per month and that's it. They have no clue on adjusting rates, penalty fees, paying it off faster mean less interest paid overall etc....

Right off the bat, a lot of people are losing money right away by being a walk up.

The best deal you can reasonably get is have a broker sift out deals for you and you choose which is best. Anyone who just walks into a bank, looks at the sign with posted rates and signs a deal is probably paying a good 0.50 - 1% more than they should. Banks love walk ups.

Actually went into a bank that loaned my Father, was told no even though she smiled every moment of the meeting.

Had a massive fight with a teller trying to take my money out and close the
account: Even had my passport and she refused.

My Father had every mortage with them and never missed a payment.

Edit; was with a manager.
# account. Told her to fuck off and wanted my money. Cash in an account.

 

[Blade2.0]

Does the 25% workforce include the 100% of executives including the CEO who decided on this approach?

I know the answer but imagine being the CEO of a real estate firm during one of the biggest housing booms in the last 30 odd years and still lose $500 million.

it's only ever the workers that get fucked my friend.

 

[godhandiscen]

Actually went into a bank that loaned my Father, was told no even though she smiled every moment of the meeting.

Had a massive fight with a teller trying to take my money out and close the
account: Even had my passport and she refused.

My Father had every mortage with them and never missed a payment.

Edit; was with a manager.
# account. Told her to fuck off and wanted my money. Cash in an account.

You need to start building your own credit. As far as I can tell the credit from your parents doesn’t really affect your personal credit score. During college I went into debt collection and it was a pain to rebuild my credit, but it was possible. I started with a credit card for which I had to give a deposit and then I paid all of the transactions I could using that credit card while paying the full credit card debt immediately to avoid paying for interest. It only took me 5 years to go from <300 to >700 credit score. By the time I got a loan to buy a house I had a credit score at around 800 which allowed me to access the lowest interest rate and in turn saved me a lot of money.

 

[Ionian]

You need to start building your own credit. As far as I can tell the credit from your parents doesn’t really affect your personal credit score. During college I went into debt collection and it was a pain to rebuild my credit, but it was possible. I started with a credit card for which I had to give a deposit and then I paid all of the transactions I could using that credit card while paying the full credit card debt immediately to avoid paying for interest. It only took me 5 years to go from <300 to >700 credit score. By the time I got a loan to buy a house I had a credit score at around 800 which allowed me to access the lowest interest rate and in turn saved me a lot of money.

As I posted, I bought my house in cash. Have dealt with cash since as I have tenants.

No loan, no mortage,

 

[Lognor]

I saw multiple posts on Reddit earlier this year from people selling their homes and Zillow coming in and offering significantly more than the listing price and these people asking if it was a scam. No, it wasn't a scam. Whoever was running this program at Zillow was just an idiot. Overpaying on properties to build up their inventory and then seeing a property market start cooling off. Not a great strategy. Congrats to those people that sold to Zillow for well over market value though. And congrats to anyone that is able to get a bargain while Zillow tries to unload their inventory.