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Zillow Releases Home iBuying Algorithm

11/03/2021

San Francisco, CA - The software-driven real estate company Zillow has announced it's throwing in the towel on its "iBuying" program.

The iBuying, or instant buying, service also known as Zillow Offers had recently been bogged down by a backlog of renovations and closings caused by labor and supply shortages in the U.S. housing market. Zillow disclosed Tuesday that it lost about $304 million in the third quarter alone from the program. The losses stemmed from purchasing homes at higher prices than it now expects to sell them at. In the third quarter, it bought 9,680 homes but sold only 3,032.

In an attempt to calm investors, the company also released the source code for their buying service. A spokesperson for Zillow said "As we transition away from this business, we want to be fully transparent with the public and make it clear that we put everything we had into this incredibly difficult and challenging problem."

We have included the most important parts of the algorithm below:

import inventoryService from "../services/inventory"; import buyingService from "../services/buying"; import sellingService from "../services/sell"; function getRandomInt(max) { return Math.floor(Math.random() * max); } async function main() { const houses = await inventoryService.getHouses(); for (const house of houses) { if (house) { await buyingService.buy(); } } for (const house of houses) { const shouldSell = getRandomInt(10) % 2 === 0; if (shouldSell) { await sellingService.sell(); } } } await main();

An expert we consulted on the source code of the algorithm said "this is just randomly selling and buying houses, what the [email protected]# were they thinking".