Zillow's ambitions were bigger than that. They wanted to get enough inventory so that they could capture the 6% of the transaction going to agents. Plus a chu

Zillow's ambitions were bigger than that. They wanted to get enough inventory so that they could capture the 6% of the transaction going to agents. Plus a chunk of the miscellaneous fees that go to Mortgage brokers, inspectors, appraisers, and so on. For that they needed volume and the way to get volume in real estate is pay more than other people. I find it hard to believe that everyone there didn't realize that they were burning money. I saw it personally when looking to buy a house a couple years ago. There were a couple Zillow flips out there where the numbers obviously didn't add up. Whether or not they truly believed that it would work eventually or if it was just a way towards higher compensation/promotions/stock price or whatever is anyone's guess. But I suspect pretty much everyone involved from the person banging out ML models up to the CEO knew what was going on.