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Look up their “project ketchup”. Their managers overrode the models and cut both fees and reno cost to win more deals. The WSJ and Business Insider wrote about this. I was at Zillow for many years and the insiders I know tell me the articles are correct but just lacking some nuance.

Many people leap to their own reasons why Zillow offers failed but the most proximate cause really does seem to be management and operational failure.

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Saying that management bought at prices higher than model is not the same thing as saying they bought houses expecting to lose money. All that was said was that management increased the prices they would pay and changed the model so they could pay more. Nothing validates the model (again, this is a common-sense conclusion given the informational disparity that Zillow was at).

Right, they didn’t expect to lose money. They saw they were only closing 10% of deals and wanted to take a higher share from opendoor. They probably thought the market was going up fast and their models were too slow.

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