How Zillow's homebuying scheme lost $881M • Hacker News Board

Re: How Zillow's homebuying scheme lost $881M

#241

Post by closeparen » Fri, Mar 18, 2022, 7:07 PM UTC

MiroF wrote: post #219

closeparen wrote: post #207

Earlier quoted context omitted.

That's just a lease. Leases have fixed terms. When the lease is up either side can give 30 days notice that they will not be renewing. That is true even in places with minimal to no tenant protection laws. In a tenant protection environment, the tenant has the option to cancel when the lease ends, but the landlord does not. Regardless of where you are in the contract cycle, the landlord's only way to end the contract…

> In a tenant protection environment, landlords cannot just decline to renew leases. Unless we're talking about some rent controlled context, where in the US is this law?

For example, the entire state of California, including municipalities that don't have rent control and properties that aren't covered by existing rent controls.

https://sfrb.org/article/summary-ab-1482-california-tenant-p...

Re: How Zillow's homebuying scheme lost $881M

#242

Post by nikanj » Fri, Mar 18, 2022, 7:07 PM UTC

sokoloff wrote: post #72

bell-cot wrote: post #23

Reminds me of an old guy in knew back in the early 90's. His (quite nice) house was on a lot shaped like "well, that was the leftovers, after we gave all the other houses reasonable lots". Every year, the City tried to raise his property's assessed value by ~10% more than the neighborhood's average increase. And every time that his house sold (he had decades of records, to support his appeals of their over-assessment…

I've often wished that one avenue of appeal of a city assessment was an option given to the property owner to force the city to buy the property for 90% of what they assessed it. You could either go through the current appeals process or just sell them the house if they were way off.

And the same for the reverse: You can claim your house is only worth $40k, but then the city is allowed to buy it for $48k.

Re: How Zillow's homebuying scheme lost $881M

#243

Post by astura » Fri, Mar 18, 2022, 7:08 PM UTC

registeredcorn wrote: post #144

Teknoman117 wrote: post #71

Earlier quoted context omitted.

> Someone can move in and refuse to pay rent, refuse to leave, use your house as a drug den, destroy your property and lots more, and you can do nothing about it. This is one of those things that really just confuses me. It's like no one could agree on happy medium between "landlord can eject you whenever they want for whatever reason" and "no one can make you leave, ever, for any reason". And to whoever downvoted yo…

>landlord can eject you whenever they want for whatever reason I don't understand. Why aren't landlords able to do this? Isn't it seen as immoral to steal property from an owner?

Because it's not just someone's property, it's also someone's home. The place they live. Society has collectively deemed kicking someone out of their home with no notice to be undesirable, even if they are currently struggling to pay rent.

You have to keep in mind the vast majority of tenancies are in good faith.

Re: How Zillow's homebuying scheme lost $881M

#244

Post by turkishmonky » Fri, Mar 18, 2022, 7:08 PM UTC

dpierce9 wrote: post #13

Anecdote on the estimates. We bought a house for X and renovated it. The day before we listed it both Zillow and Redfin estimate had an estimate around the purchase price X. When we listed it for 2X, both companies changed their estimate to be close to the listing. However, Redfin changed the entire price history as well showing a gentle slope. Zillow preserved their previous history and showed a spike.

Another anecdote - We sold a house in late 2020, decided to get an offer through zillow first, since we had a newborn and staging would have been a hassle.

Zillow lowballed us 10% under their zestimate, and still tacked on an 8% fee - we ended up going with a realtor instead, and ended up getting 15% over the Zestimate, with a 6.5% fee.

Re: How Zillow's homebuying scheme lost $881M

#245

Post by CloudYeller » Fri, Mar 18, 2022, 7:09 PM UTC

I bet humans could have done a lot better than -$881M, and it wouldn't have been very costly to employ them. How many homes did Zillow iBuy in total, 10-20k? If it takes 5 minutes to evaluate a house, that would be 100,000 minutes, which is ~50 people working full time for a week. Spending $100k on that could have saved 100s of millions, plus it might have generated better training data for the model.

Re: How Zillow's homebuying scheme lost $881M

#246

Post by schrijver » Fri, Mar 18, 2022, 7:10 PM UTC

ForHackernews wrote: post #103

paxys wrote: post #57

Earlier quoted context omitted.

Agreed. Heck I know several people who prefer to keep their condos/houses empty rather than rent them out at market rate because of 100% tenant friendly city and state laws. Someone can move in and refuse to pay rent, refuse to leave, use your house as a drug den, destroy your property and lots more, and you can do nothing about it. At that point the city is just incentivizing homeowners to contribute to the housing…

The obvious solution is to just expropriate them and turn them into public housing. It's working in Berlin.

Or tolerate squatting, which used to be the case in the Netherlands.

Re: How Zillow's homebuying scheme lost $881M

#247

Post by afterburner » Fri, Mar 18, 2022, 7:11 PM UTC

lotsofpulp wrote: post #107

jjice wrote: post #39

It's such a glaring red flag that one of the largest public resources for getting pricing information on housing is also buying and selling that housing. Come on, this is so glaringly abusable that any teenager could tell you what's wrong.

Can you illustrate the mechanism of abuse? Pricing information on housing is readily available to almost everyone, outside of the couple stated that do not mandate it. Zillow makes it easier, but Redfin and realtor.com and countyoffice.org and other websites offer the same information scraped from municipal websites.

Zillow could lie about regional home values and blame it on their "secret sauce".

Re: How Zillow's homebuying scheme lost $881M

#248

Post by hyperbovine » Fri, Mar 18, 2022, 7:12 PM UTC

paxys wrote: post #40

thr0wawayf00 wrote: post #9

The scary thing is that it's easy to see how something how like this could drive a market boom and bust cycle. I'm imagining a scenario where two iBuyer companies try to outbid each other algorithmically, driving the prices further and further out of reach of people who are looking for a primary home. Tangentially related, I talked to a friend who works on geospatial data for one of the big vacation rental companies,…

One can blame Airbnb, Zillow or whoever else, but the truth is that speculation in real estate and vacation towns have both been a thing for a very long time. If the population rises and we refuse to build more houses, the existing ones will get more expensive no matter what. The solution is out there in front of us but everyone prefers to dance around it.

> The solution is out there in front of us but everyone prefers to dance around it.

Could not agree more, just so we're all on the same page it is:

https://en.wikipedia.org/wiki/Human_population_planning

Oh, sorry, were you referring to something else? :-)

Re: How Zillow's homebuying scheme lost $881M

#249

Post by mikeyouse » Fri, Mar 18, 2022, 7:12 PM UTC

dntrkv wrote: post #213

bombcar wrote: post #140

Earlier quoted context omitted.

From what I've heard is a common thing for landlords to do is a "pay to vacate" where they show up at the door with $1k in cash if the tenant will just leave.

> show up at the door with $1k in cash In SF, there have been six-figure buyouts to remove tenants from rent-controlled properties.

Sure, because those tenants signed contracts with perpetual leases (as also understood by the landlords who provided the contracts). Evicting in SF means you can't turn your property into a Condo (only a TIC) - so to maintain the value of the condo conversion option, landlords pay tenants to leave. The buyouts are proportional to the rent difference so it's not surprising that someone who's rent is increasing from say $1k/month to $4k/month would need a large sum of money (that's taxable!) to be convinced to leave.

Call the buyout $100k -- best case scenario, it's taxed as capital gains so you'd take home $85k. At $3k/month increase in rent, you'd be looking at a little over two years before you're below water.

Housing in California is broken in 1,000 different ways but the tenant buyouts seem to be pretty minor in the grand scheme of things.

Re: How Zillow's homebuying scheme lost $881M

#250

Post by schrijver » Fri, Mar 18, 2022, 7:13 PM UTC

tristor wrote: post #129

paxys wrote: post #57

Earlier quoted context omitted.

Agreed. Heck I know several people who prefer to keep their condos/houses empty rather than rent them out at market rate because of 100% tenant friendly city and state laws. Someone can move in and refuse to pay rent, refuse to leave, use your house as a drug den, destroy your property and lots more, and you can do nothing about it. At that point the city is just incentivizing homeowners to contribute to the housing…

> prefer to keep their condos/houses empty rather than rent them out at market rate because of 100% tenant friendly city and state laws. Someone can move in and refuse to pay rent, refuse to leave, use your house as a drug den, destroy your property and lots more, and you can do nothing about it. I'm in this situation right now. The only way I'll rent it out is if I personally know the tenant and their personal chara…

This is so alien to me. Why don’t you sell the place? Staying the owner of this place makes it so that you can’t spend your money tied up in this house, and this house can’t provide its roof to someone. Seems like both of you loose.