Zillow’s iBuying Business Grows but is Not Yet Profitable

Zillow Group saw their revenue double to $2.7bn in 2019, this was due in large part to their ibuying business; on average the company lost $5,000 per house due to account holding costs, selling costs and interest expenses; ibuying has become one of the hottest trends in the real estate space with a host of companies offering the services along with investors pouring in more than $1bn; doing so at a profit has been elusive as margins on house flipping tend to be low; Zillow hopes their overall offering which now includes title, escrow and mortgages will increase margins for its Homes business; “We expect to improve the overall margin percentage of Homes on an annual basis,” Allen Parker, Zillow’s CFO, said on a fourth-quarter earnings call on Wednesday according to Business Insider. Business Insider

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