- What is Zillow, and how does Zillow work?
- How does Zillow make money?
- Zillow Offers
- Premier Agent Services
- Rental Listings
- Zillow Home Loans (Mortgages)
- Zillow’s Subsidiaries, Acquisitions, and Exits
- Zillow’s profit and revenue
- What is the Zillow business and revenue model?
- Zillow’s funding and market cap
How does Zillow make money? Here is a full, in depth, breakdown of their four (4) revenue streams and the different products and services they offer, as well as the Zillow business model, their year over year revenue, and how Zillow works.
What is Zillow, and how does Zillow work?
Zillow is an online real estate marketplace where customers can buy, sell, and rent real estate.
Founded in 2006 by Rich Barton and Lloyd Frink, Zillow began trading on the NASDAQ on July 20, 2011, under the ticker symbol “ZG”.
Since that time, Zillow has become one of the largest real estate marketplaces in the industry with 15,436 homes sold and $4.06 billion of loan origination volume in 2021 alone.
How does Zillow make money?
According to page 46 of Zillow’s 2021 Form-10K, Zillow had more than 10.2 billion visits to their apps and websites, sold 15,436 homes, and had a total loan origination volume of $4.06 billion in 2021.
So how does Zillow make money off of all those website traffic, homes sold, and loan origination volume?
Below is a breakdown of how much money Zillow makes and its revenue model. Including all revenue streams and how much they charge for their services.
Note: Zillow offers its services in all four (4) cornerstones of real estate; buyers, sellers, renters, and borrowers.
Here are the 4 ways of how Zillow makes money (in 2022):
Zillow has a revenue model that makes money in four (4) ways; Zillow Offers, Premier Agent services, rental listing fees, and Zillow Home Loans (Mortgages).
#1. Zillow Offers
Zillow makes the majority of its money by purchasing and reselling homes. In fact, according to page 47 of Zillow’s 2021 Form-10K, $5.98 billion or 73.4% of Zillow’s total revenue came from Zillow Offers in 2021.
How does Zillow Offers work? Zillow gives all cash offers to buyers looking to sell simply and quickly. No showings or repairs necessary; Zillow buys it in “as in” condition. Once an offer is accepted by the homeowner, Zillow then makes more money by using its own services, Zillow Closing Services, for title and escrow. After it’s sold to Zillow, they then renovate the property and relists it for sale.
As noted above, Zillow sold 15,436 homes for an average sales price of $387.6 thousand per home through Zillow Offers in 2021.
Note: 73.4% of Zillow’s total revenue came from Zillow Offers in 2021.
#2. Premier Agent Services
Zillow makes another chunk of its money from its Premier Agent services offered to real estate agents, teams, and brokers. Which, in 2021, generated $1.395 billion in revenue for Zillow.
According to Zillow, Premier Agent revenue is generated “by the sale of advertising services, as well as marketing and technology products and services.” Which they offer through their Premier Agent and Broker programs.
#3. Rental Listings
In addition to Zillow Offers and Premier Agent revenues, Zillow also makes money off of rental listing fees.
Landlords and agents can use this listing tool to not only list rentals but also to run tenant background checks and credit reports, digital lease signing, and collect rent directly online; all for the price of the weekly listing fee listed below.
Zillow Rental Listing Fees:
- the first listing is free, but it’s $9.99 per week per listing thereafter (or $4.99 in IA, KS, ND, NE)
#4. Zillow Home Loans (Mortgages)
In 2019, Zillow entered the mortgage lending industry under Zillow Home Loans. In which generated an additional $245.8 million of revenue for Zillow in 2021.
The way Zillow makes money from these mortgages is through, both, originating mortgages and then selling the loans on the secondary market and through advertising revenue from mortgage lenders and other mortgage professionals by selling them ad space on Zillow’s mortgage marketplace.
Zillow’s Subsidiaries, Acquisitions, and Exits
To date, Zillow Group, Inc. has made a total of 12 acquisitions, 5 investments, and 1 lead investment.
Zillow’s profit and revenue
In 2021, Zillow reported $8.14 billion in revenue.
Note: Because Zillow Group, Inc. is a publicly traded company, under the Securities Exchange Act of 1934, they must file continuous financial filings with the U.S. Securities and Exchange Commission (SEC). You can find all of Zillow’s publicly released financial reports, including annual reports, through Zillow’s investor section on their website.
What is the Zillow business and revenue model?
Zillow makes money through a few revenue models that they combine within their company, they are:
- Advertising based business model
- Subscription business model
- Software as a service (SaaS) business model
- Business to business (B2B) business model
- Mergers & acquisitions (M&A) business model
Zillow’s funding and market cap
According to Zillow’s Crunchbase profile, Zillow has raised $96.6 million over 5 rounds and has a market cap of $10.99 billion as of April 2022.