Zillow iBuying revenue soars — but losses mount

Zillow Offers to launch in Los Angeles

National /
Nov.November 07, 2019 05:10 PM
Zillow's Rich Barton (Credit: iStock)

Zillow’s Rich Barton (Credit: iStock)

Zillow’s revenue doubled to a record $745.2 million during the third quarter, driven by its year-old iBuying program.

For the first time since the Seattle-based company launched an instant home-buying feature, revenue from its “Homes” segment eclipsed that of agent advertising.

During the third quarter, home buying generated $384.6 million in revenue, up 55 percent from the second quarter. (Zillow Offers yielded just $11 million during last year’s third quarter.)

But the company’s losses also widened to $64.6 million from $492,000 a year ago.

Zillow joined a crowded field of companies that buy homes for cash when it pivoted to iBuying last year. But it “wants to become the team to beat,” Barton said during an earnings call Thursday. Previously, he’s called a pivot to home buying as Zillow’s “moonshot.”

During the quarter, the company purchased 2,291 and sold 1,211 homes. It ended the quarter with 2,822 homes on its balance sheet. Zillow said its iBuying segment generated gross profit of $13.8 million — for an average of $11,400 per home.

Zillow Offers is currently offered in 21 markets and plans to launch in Los Angeles next month. “We’re getting close to a national footprint,” Barton said.

Company officials said they see Premier Agent — its marquee agent advertising feature — as a “distinct competitive advantage” as it builds up the home-buying business. “It’s the size and strength of Premier Agent that allow us to invest in and expand Zillow Offers so quickly,” Barton said.

Zillow said Premier Agent “re-accelerated” during the quarter, pulling in revenue of $240.7 million, up 3 percent year-over-year.

“The profitability of our Premier Agent business is foundational to Zillow’s success and is the reason we are able to expand Zillow Offers with such confidence and speed,” Barton said.

Barton recently set the record straight on how it makes money from iBuying. “We’re not flipping this property,” he said last month. “We’re looking to move it as quickly as possible and earn our money off the transaction fee.”


Related Articles

arrow_forward_ios
Zillow CEO Spencer Rascoff is stepping down as his co-founder takes over
Zillow CEO Spencer Rascoff is stepping down as his co-founder takes over
Zillow CEO Spencer Rascoff is stepping down as his co-founder takes over
Placeholder image
Zillow to pay $50M for StreetEasy
Zillow to pay $50M for StreetEasy
Zillow will resume iBuying, but pause raises questions over model: analysts
Zillow will resume iBuying, but pause raises questions over model
Zillow will resume iBuying, but pause raises questions over model
Zillow CEO Rich Barton (Getty, iStock)
Zillow hits the brakes on iBuying
Zillow hits the brakes on iBuying
Opendoor amasses $9B in borrowing capacity
Opendoor amasses $9B in borrowing capacity
Opendoor amasses $9B in borrowing capacity
FTC Chair renewing probe into Zillow’s acquisition of ShowingTime
FTC Chair renewing probe into Zillow’s $500M acquisition
FTC Chair renewing probe into Zillow’s $500M acquisition
iBuyer bonds attracting Wall Street capital
iBuyer bonds attracting Wall Street capital
iBuyer bonds attracting Wall Street capital
It’s a house, not a home: Inside the commodification of residential real estate
It’s a house, not a home: Inside the commodification of residential real estate
It’s a house, not a home: Inside the commodification of residential real estate
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...