Zillow’s 1% Loans Have Little to Do With Helping First Time Home Buyers

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Zillow has become the most popular residential real estate portal in the U.S. They did this by becoming masters of lead generation. Their first big win was their Zestimate, which allowed homeowners and prospective home buyers to see an algorithmically created estimated property value for any home in America. This put them in the front of the pack of real estate portals. It also gave them the ability to generate a ton of leads, both of the people researching for their upcoming home purchase and the ones thinking about selling.

Their algorithm got so good (so they thought) that they eventually rolled out an iBuying program that would purchase a property, sight unseen, for the price of their Zestimate.The iBuying program did not go as planned. In November of 2021, they shuttered their Zillow Offer division and halted all purchases, leaving them with over 7,000 properties worth hundreds of millions of dollars to sell. 

Now Zillow has moved on from buying into this tight market and are instead rolling out solutions for buyers. Their newest product is a mortgage that only requires 1 percent of the purchase price as a down payment. In their press release, Zillow pitched this service as a way to help first time home buyers more easily afford to buy homes: “The 1% Down Payment program can reduce the time eligible home buyers need

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