To complement the new strategy, Zillow announced Tuesday its plans to acquire American mortgage. The business conditions were not disclosed, but Wall Street did not positively look at the binding.
Analysts of Bank of America / Merrill Lynch downgraded the stock Tuesday and warned to move to mortgage loans could harm profitability next year. 19659002] President Spencer Rascoff defended the move Tuesday on CNBC’s “Squawk Box”.
“It makes it possible for us to make a profit from the Zillow Offers business another way,” he said. First, we can make money from buying and selling. Secondly, we can make money from mortgage loans. Third, we can make money by passing the home seller, who does not want to sell his home to us, to a premier agent. “
He noted that Zillow’s practice of buying and selling housing, which could take months, leads to late earnings. It contributed to Tech Real Estate Company’s weak third quarter guidance, he said.
The shares did a similar kind in April when the company announced the strategy. But Rascoff kept in May, the strategy would go off.