Zillow shutters closing and title division
In an email to clients, the company announced it is ending Zillow Closing Services because it isn’t the “tech-forward and integrated product” customers need.
Key points:
- The closing and title division was developed during the company's Zillow Offers era.
- A Zillow spokesperson confirmed that about 80 roles will be impacted by this decision.
- The company remains committed to expanding its so-called agent "super app" which integrates many aspects of the real estate transaction.
Despite its efforts to be a one-stop shop for homebuyers from search to close, Zillow has determined that its Zillow Closing Services division has become a weak link in the chain.
The company sent out a letter to clients, posted on LinkedIn by real estate tech strategist Mike DelPrete, announcing its decision to wind down the division.
In the letter, Zillow noted that as it tries to fulfill its goal of making the real estate transaction simpler, "we didn't believe it was right to keep rallying agents around a closing services solution we know ultimately is not the tech solution we believe we need."
A Zillow spokesperson confirmed the accuracy of the email posted by DelPrete and also disclosed that about 80 roles supporting Zillow Closing Services will be impacted by the closure.
"Integrating the real estate transaction to make buying and selling simpler for customers remains our core strategy and we believe offering title and escrow is a critical component," the company said in a statement to Real Estate News. "However, we determined our current offering through Zillow Closing Services isn't the integrated product we believe customers and partners need, so we are sunsetting our current Zillow Closing Services operations while we explore more tech-forward solutions."
Because title and closing services typically involve third-party providers, integrating those services into one system has proven to be tricky, despite Zillow's long-standing goal to make it a reality.
"We think the real consumer magic for the seller and for the buyer is when all the disparate, complex, expensive elements are brought together into an integrated seamless package," Rich Barton said in a May 2019 interview with Geekwire. "We want to build Microsoft Office for real estate. We want it all to work together, and you get it all together."
Zillow Closing Services launched in 2019 with the goal of making every transaction "easy and seamless for all parties" according to its website. It was developed in conjunction with the company's Zillow Offers iBuying program, which shut down in the third quarter of 2021.
While the shuttering of Zillow Closing Services may be a setback in Zillow's aim to provide agents and consumers with end-to-end transaction services, the company is continuing to work on its "super app" which brings together several aspects of the transaction process.
Zillow shareholders appear to be reacting positively to the company's recent moves. Zillow's class A stock hit another 52-week high on Wednesday, June 28, trading at nearly $52 a share in mid-session.