Zillow shutting down closing services unit

Zillow, the company that operates several businesses serving the real estate transaction, is shuttering its closing services unit, the company confirmed. The move was revealed by a memo shared by a LinkedIn poster and was first reported by HousingWire.

"Integrating the real estate transaction to make buying and selling simpler for customers remains our core strategy and we believe offering title and escrow is a critical component," a Zillow spokesperson said in a statement. "However, we determined our current offering through Zillow Closing Services isn't the integrated product we believe customers and partners need, so we are sunsetting our current Zillow Closing Services operations while we explore more tech-forward solutions."

This statement echoes the memo sent to Zillow Closing Services customers.

"Zillow's mission is to integrate the real estate transaction to make buying and selling simpler for customers and our partners," according to the memo. "As a matter of practice, we continually evaluate our current products and solutions, and have determined our current closing offering provided through Zillow Closing Services isn't the tech-forward and integrated we believe customers and partners need."

In prior statements about its businesses, Zillow has said that it is willing to build or buy. Its Zillow Home Loans unit is an example of that philosophy. To create that business, it bought what was once called Mortgage Lenders of America, in 2018.

Meanwhile, Zillow Offers, the property flipping business that was ironically the catalyst for the mortgage buy but shut in November 2021, shows where the company decided to exit an unsuccessful line that was taking a toll on its financials.

Approximately 80 positions will be affected by the unit's shut down. Affected employees will receive eight weeks of pay plus one additional week for each year of service at Zillow Group. In addition, the company is paying for three months of COBRA as a lump sum payment in consideration for their next equity vest, and outplacement services.

In October, Zillow laid off 300 workers across several business units, including Premier Agent.

Zillow Closing Services had limited reach and little traction, operating primarily in areas the parent company considered enhanced markets, such as Denver; the Raleigh-Durham area of North Carolina; Phoenix; Atlanta; and Charlotte, North Carolina. It also had a smaller presence in other areas.

It stopped taking title orders on June 27. But all existing orders and closings will be processed before the shutdown.