Reference no: EM133615462

write a thank you response to a classmates comment that says "Thanks for sharing this, great post! I'm glad you highlighted the most compelling figures in the case and probable rationale for why Zillow entered into the iBuying space in a one-stop shopping setting. There analysts concluded sellers would pay double the rate (up to 12%) of selling price to get rid of a home fast. Double-digit figures like this must be dififcult to walk away from as an investor/for profit company. That means if you can lock in 12% on average, your biggest challenge and greatest reward is minimizing any expenditures attributed to re-sale of the home (minimize renovation costs, overhead and capex, as well as wages associated with marketing and listing). As Zillow soon found out it's not as simple as slapping a band-aid on an asset as valuable as a home. A ton of capital and labor goes into renovations, coupled with a rising rate environment, and lengthier time on the market makes for a substantially riskier business. I also agree that there is a huge potential in the instant buyer market that can be capitalized on if things work out as expected. In Zillow Offers case.