Zillow is one of several "high-tech home-flippers," or institutional buyers "i-buyers," offering home sellers instant purchase offers.
These startups and brokerages use Wall Street and Silicon Valley capital and algorithms to predict home values, which investors then use to buy homes "on a massive scale," according to Bloomberg reporting. Homeowners are reaping the benefits of a faster process, while housing industry professionals, such as real estate agents, skeptics of big data, and those who have witnessed the downside of innovations in housing finance from the Great Recession grow concerned.
The company behind the algorithm was Zillow Group Inc., better known for operating apps and websites that help buyers find homes. In May 2018 the Seattle-based company, whose home value estimates—“Zestimates,” they’re called—have become a sort of Kelley Blue Book for American homes, started an “instant offers” business. Zillow would buy houses, fix them up, and resell them, earning a fee for providing a simple, fast transaction.
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