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Kris Lindahl Has to Unload 167 Properties from Zillow’s Doomed Homebuying Program

The mega-selling Twin Cities billboard presence isn't sweating it.

11:06 AM CDT on November 5, 2021

Em Cassel

News of Zillow Offers going belly-up elicited no small amount of internet schadenfreude

Launched in 2018, the home-flipping program—part of the so-called iBuyer movement—felt like more tech utopian snake oil in a culture that’s already drowning in it: The all-knowing algorithm can create an Uber for selling your biggest asset. 

It proved to be a spectacular failure. 

On Tuesday, the Seattle-based company announced the demise of its $1.17 billion division, setting off a 25% stock nose-dive and a 25% slashing of the Zillow workforce. (Wall Street ghouls BlackRock, JPMorgan Chase, and Goldman Sachs, all of whom are ramping up purchases of residential housing stock, are certainly paying attention.) After pausing the program at the onset of COVID, Zillow resumed gobbling up homes this year, no doubt contributing to the chaotic spring market, though total iBuyer purchases account for just over 1% of Twin Cities home sales.

“Zillow’s buyer program, like other iBuyers, are just house flippers with nice websites,” says real estate agent Nate Pentz of Pentz Homes. Fundamentally, he says, they’re no different than the flippers who advertise CASH 4 HOMES via highway offramp signs; for the margins to work, the properties need to be undervalued enough to support significant repair costs—ideally foreclosures and short sales. “Zillow had so much money to burn they didn’t see a cooling market,” Pentz says, noting that his agents saw bids from Zillow Offers that soared $30,000 over the comps they studied.  

The hungry, hungry Zillow bots overpaid.

Locally, the Zillow Offers fallout is twofold: The remaining 167 homes that Zillow owns and needs to unload, plus the fortunes of the man—Kris Lindahl—who landed the exclusive contract to sell ‘em. 

The prices of those properties, which you can browse here, demonstrate the losses Zillow continues to endure. Zillow bought this 4-bedroom, 4-bathroom New Hope home for $364,800 in April, according to county records; it’s listed for $320,000. This south Minneapolis bungalow was snatched up for $368,900 in July; it’s now going for $325,000. This north Minneapolis rambler was acquired for $267,300 in August; you can have it for $240,000. Nationwide, Zillow has to rid itself of 7,000 properties

The demise of Zillow Offers doesn’t worry Lindahl. “The Zillow Offers partnership accounted for a small portion of our business,” he says, adding that it was “an honor” to be chosen as the local partner. Lindahl’s trademark Guaranteed Offer program—perhaps you’ve noticed the billboards—operates on similar principles, but it’s “thriving,” he says. 

“In fact,” the omnipresent real estate agent says, “we are increasing our marketing for that program.” 

Look out for more billboards.

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