The housing market is pretty crazy right now! And it’s making the real estate business go a little crazy too, apparently. I’m sure you’re familiar with Zillow, the massive online database of rental and purchase properties. Recently they got into buying homes themselves and flipping them to customers. Things did not go according to plan, and ultimately ‘Zillow Offers’ was short-lived. New questions are being raised about corporations getting involved in the housing market, as given recent events it’s clearly a slippery slope. Who benefits the most from a company buying up mass numbers of homes and reselling? And who is hurt the most by that? Some technology advancements in the real estate industry may lead to removing the middle man in the equation; the agent. While others seem more aimed at supporting the agent to provide a better experience for buyers. In either case, the integration of virtual assistants can be the missing piece of the puzzle when properly placed. Let’s talk about where Zillow went wrong, and how virtual assistants keep other businesses from making the same mistakes.
Zillow Offers was the name of their failed house-flipping operation. They had aimed to no longer be just a database for buyers/sellers, but to be a major player themselves in the market. The global reliance on internet shopping no doubt had an influence on Zillow’s mission here. If we can order everything from cat food and groceries to cars and vacations over sites like Amazon, why not buy a house online too? Unfortunately, the timing wasn’t right, the execution was flawed, or perhaps a bit of both. Because Zillow reported having lost over $300 million dollars in just the past few months thanks to this new venture. This obviously led to Zillow reconsidering this algorithm-based approach to house flipping, and ultimately the end of Zillow Offers short life. Zillow now needs to sell 7,000 homes at a loss, resulting in another $250 million in losses by year’s end.
The World Moves Faster Than Tech
One bit of conjecture is a lack of discipline corporate-wise in the execution of this venture. The systems set in place for buying up homes seem to have struggled with predicting accurate home prices as the market continued to rise. CEO Rich Barton said as much; “the unpredictability in forecasting home prices far exceeds what we anticipated.” That, coupled with a known inability to find enough contractors to help them flip these homes Zillow already purchased, led to a massive overflow of houses they couldn’t do anything with. This may sound like a tech-company attempt to manipulate the market, but in reality, it was more an attempt to predict and get ahead of it. To become the Amazon of real estate, before anyone else got a chance. Ultimately, it does not appear the world is ready for an automated home buying experience. There are just too many moving parts. The market can be too volatile, buyers can be fickle, and contractors are a finite resource. Zillow learned a hard, and expensive lesson.
Remember The Humans
Money wasn’t the only thing lost in this mess, as one-quarter of Zillow’s 6,400 person workforce is being laid off. That’s approximately 2,000 people who just lost their jobs, due to Zillows business mistakes. A sad chain of events during an unprecedented time for businesses and employees alike. It makes us wonder if this could have been avoided, had Zillow implemented more human safeguards? Relying on code will always have its limitations and risks. That’s why more and more businesses are expressing interest in virtual assistants. The human touch is necessary to keep your business growing in a healthy and sustainable fashion. Human error can be caught, noticed, corrected, and resolved before it blows up. When an algorithm messes up, it often just keeps messing up and the damage just piles on.
Brace For the Future
If you’re trying to grow your business fast like Zillow, but you want to do it the right way, perhaps a virtual assistant is the key. Keep your local experts focused on their specific strengths, give them the room to breathe and excel. While delegating remote busy work to an experienced, trained, and reliable virtual assistant. All at up to 70% savings compared to hiring a local employee. If you get carried away with tech and automation you’ll dig yourself a Zillow-sized hole. Humans, no matter where they’re located, can be a vital part of the equation when calculating rapid growth. Use the link below to request a FREE one-on-one consultation. We’ll hear you out and understand what you need, and then pitch a plan to help with a virtual assistant. No obligation, nothing to lose, everything to gain.
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