Zillow CEO Rich Barton dreams of homebuying and selling one day becoming like a “trade-in experience.” Barton discussed his company’s ambitions for what Zillow calls “Real Estate 2.0” on CNBC Thursday.
Barton, the co-founder of Zillow, told CNBC on its show Closing Bell, that Zillow views the house transaction as the hub of a series of important – and profitable – transactions, including mortgage, title and escrow, telecommunications services and moving.
“We dream one day of you almost having a trade-in experience with your house,” Barton said, “Where you’re standing in a Zillow Offers house that we own, you’ve been there 15 times, you’ve let yourself in with the Zillow app, we know who you are and where you live, we have a mortgage ready to go, we have an offer for your house when you’re ready to transact and you, with one click, can decide to move.”
Barton likened Zillow’s transition from its Premier Agent advertising program as its top moneymaker to Zillow Offers, to Netflix transitioning from shipping DVDs to streaming and then original content. Barton is also a member of the board of directors at Netflix.
“We have this huge, profitable incumbent business with this trusted brand, and we’re saying, ‘alright, there’s a technology disruption happening, and we’ve got to be the ones to build the bridge across the chasm and get to the other side,'” Barton said. “That’s why we are going so hard and so aggressively – but in a prudent way – at the new opportunity and it’s going extremely well.”
Zillow Homes — the segment of the business under which Zillow Offers, the company’s homebuying and selling platform, exists — generated $384.6 million revenue in the third quarter of 2019, a significant increase from the previous quarter’s $248.9 million in revenue. That segment of the business operated at a loss of $87 million before income taxes.
In the third quarter of 2019, the company sold 1,211 homes and bought 2,291 homes. More than 80,000 homeowners have requested an offer through the program. Zillow Offers now operates in 21 markets after opening in eight new markets in the third quarter. In the fourth quarter, Zillow plans to take Zillow Offers to Los Angeles.