Before its collapse, the Zillow Offers iBuyer program had attracted a broad range of skeptics.

Real-estate professionals and financial investors, of course, had for years been scrutinizing Zillow’s effort to become a major player in the iBuying business. 

But online, content creators had their own theories about what they saw as Zillow’s ulterior motives for buying homes in single-family neighborhoods, including selling them in bulk to institutional investors, namely BlackRock. Those theories have since taken on a life of their own, with accounts across the spectrum of social media questioning what Zillow plans to do with its remaining home inventory, now that it’s exiting the iBuyer game.

Would Zillow’s eagerness to sell mean thousands of homes would now become available to families at a discount?

“Oh, you can’t buy one,” one content creator quipped on TikTok. “Zillow’s only selling these houses back to Wall Street investors.”

@johnsfinancetipsZillow is selling 7,000 homes for less than they purchased for! ##zillow ##financetok ##learnontiktok ##tiktokrealestate♬ original sound – John Liang

It’s a common refrain from recent days. Reports that Zillow was working to sell thousands of homes to institutional investors prompted speculation that these homes would only be sold to big investment companies, not average Joes and Janes.

Some went so far as to speculate that Zillow might be able to offload all of its homes to a single large investment firm, with BlackRock a popular guess.

But an Inman review of Zillow-owned home listings, shareholder documents and information from the listing portal giant reveal a more complicated picture as the company rushes to sell thousands of homes any way it can — including through the open market.

A race to sell

Zillow’s failed bid to become one of the biggest iBuyers ran up against multiple problems.

The bold strategy involved frenzied competition with companies like Opendoor, Offerpad and Redfin, all of whom were scooping up homes with instant cash offers, then fixing those homes and selling them again — sometimes for a loss.

All the while, claims swirled online, offshoots of a general skepticism toward big institutional investors that buy homes in single-family neighborhoods. Companies like Zillow, some argued, could simply purchase homes in one neighborhood for cheap, then drive up prices, box out families, and rake in huge profits.

In a phone call with Inman, A Zillow spokesperson said the company will continue to list its inventory for sale on the open market as part of its broader sales approach. 

“Since the beginning, part of our general strategy is, we try to sell these homes to a variety of different types of buyers,” Zillow spokesperson Viet Shelton said. “And that includes taking and considering offers both from retail buyers — when we publish them on the MLS — and/or investors, as well.”

Those “owned by Zillow” homes — many of which have been sitting there for weeks or more without an accepted offer — remain listed for sale through the site’s portal. Families and individuals can still offer on these homes, even as the company works with institutional investors on the side to package them with others in a bigger deal.

Large amounts of venture capital have flowed into iBuyers like Opendoor and Offerpad in recent years, and larger companies like Zillow and Redfin jumped into the fray as well. Despite the considerable resources and attention geared toward direct cash offers, home sales involving an iBuyer have remained a relatively small — although growing — share of the market.

The four major iBuyers reached a combined 1 percent market share in the second quarter of the year, according to a September report from Zillow. This development had all four of them poised to eclipse their records in the third quarter.

Now, with Zillow’s exit, just three of those big players are still making instant cash offers on homes.

One institutional investor — BlackRock — has gained notoriety in the online discussion around the program.

The investment firm is often mentioned in the same breath as Zillow by groups skeptical of the role institutional investors are playing in single-family neighborhoods. And some have wondered whether a single company like BlackRock might swoop in for Zillow’s entire remaining portfolio.

A BlackRock spokesperson told Inman via email that he was unaware of any efforts by Zillow to reach out regarding its remaining home inventory.

“This information appears to be based solely on rumors circulating on social media,” BlackRock spokesperson Christopher Beattie wrote in the email. He declined to comment further.

One of BlackRock’s largest interests in the single-family space sold to another investment company this summer. The unrelated, but similarly named, Blackstone Group is now the majority owner of Home Partners of America, a rent-to-own venture that owns 17,000 homes. BlackRock’s portfolio still contains interests in multifamily and commercial real estate.

Zillow’s spokesperson could not say which firms Zillow is working with as it tries to offload some of its remaining homes in bulk, but confirmed that selling to institutional investors is part of the company’s broader strategy.

“There’s no one single company we’re working with,” Shelton said.

The spokesperson did not have an exact number of current homes that Zillow still owns. But in the company’s letter to shareholders this week, Zillow said that it had 9,790 homes in its inventory at the end of September. It was under contract to buy another 8,172 homes at that time.

The company intends to honor these purchase contracts, Shelton said. This means that it will need to turn around and sell something closer to 18,000 homes before Zillow Offers draws to a complete close.

“Generally, the idea of selling these homes and getting them to market quickly is not new,” Shelton said. “That’s not actually a new part of the wind down. What’s new is we’re not buying any new homes.”

Email Daniel Houston

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