Zillow’s scrapped its algorithm-driven house flipping service after losing over half a billion dollars. Now investors think that the model could work in continental Europe.
Tinacci says that while Zillow scrapped its home-buying division after just two years, its American rivals Opendoor, Offerpad and Redfin remain active, and Europe’s property market was very different from the United States.
Tinacci says that he focused on buying apartments in a handful of major European cities like Rome, Milan and Madrid, where there is a “information asymmetry” on listings prices because of patchy data, and lower refurbishment costs, as opposed to the typical suburban American home targeted by Zillow and its rivals. “In a nutshell, Europe has a structural advantage versus the U.S,” says Tinacci.
Casavo claims to be able to make an offer on a property within two days, and complete a sale in under a month while the average Italian home takes 20 weeks to sell, according to data from European property listings site. But sellers opting for Casavo will need to accept a discount on the valuation in order to book a quick sale.
Casavo CEO and founder Giorgio Tinacci also makes money from selling mortgages to home buyers, and tools to brokers.
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