Zillow Wants To Make You An Offer

Known for price gawking, the real estate app plans to buy homes by the thousands.

- Patrick Clark

With its tan stucco exterior and red tile roof, the Rittenhouse home on South Star Canyon Drive looks a lot like the other houses in Power Ranch, a large planned community southeast of Phoenix.

Mark, a meat buyer for a grocery chain, and Anne, a nurse, bought the house for $293,000 in 2010 during the U.S. foreclosure crisis, which hit the Phoenix area particularly hard. At the time, local home prices were down about 50 percent from their peak in 2006. By late last year the market had recovered, and Mark and Anne were thinking about moving on.

They still liked Power Ranch, which had good schools and a network of parks and hiking trails where they walked their golden retriever. But a quirk in the 3,000-square-foot home’s layout was grating. The kids’ rooms were the size of typical master bedrooms, and the master was even bigger. But the living room was the only usable common space, a vexing issue when the family’s two boys brought friends over. Mark suggested they could throw up a couple of walls and create a teenage quarantine zone. Anne shot him down. They needed a new place— fast. So they went house hunting.

To buy a new home, the Rittenhouse would have to sell their old one. They started pricing repairs and debated whether it made more sense to sell first and move into a temporary rental, or if they should try to manage two transactions at once. Then they met a buyer willing to pay cash, who wasn’t hung up on the big bedrooms or a little bit of dog damage. Their dream buyer? An algorithm.