Zillow 1st Home under their new initiative. What do you think?

[Khoa Ha]

Hi BP,

So Zillow have finally entered the buying and selling property business. Here is an article briefly describing how the experience was for Zillow and the home seller: https://www.geekwire.com/2018/inside-look-zillows-...

The article stated that the seller accepted an offer of $410,000 for the house and the Zestimate for it is $414,233. It also have the coming "Coming Soon" note at $425,000 and that Zillow plan to only do some light touch up to the house before putting it back on the market. Also, below is an image I just took from zillow own website. I have circled the house in red.

Personally, from the numbers so far I don't think there is much profit to be made from this house since most of the comps are much lower. With the purchase price of $410,000 I think Zillow have put out a generous offer to make a good impression on future potential seller. This must have been a marketing attempt to get good publicity. Even if they only pay 3% for both the seller and buyer agent to have the property for sale that would have equate to $12,750 ($425,000*3%). This is not counting the cost to acquire the property (excluding the price) and the cost to fix up the property before selling it. I am pretty sure they will need a better margin down the line if they wanted to stay in this game. 

What do you all think?

KH