Zillow made its CFO a COO as well

Whether it’s to shop apartment rentals or homes for sale, to ogle the McModern houses in a city’s affluent enclaves, or to find the Holy Grail of weirdest-looking houses, Zillow is often one of the first places people search.

Luckily, Zillow didn’t have to do much searching for its next COO. Its CFO was right there.

After close to nine years with the company operating the largest online real estate listing site, Zillow CFO Jeremy Hofmann took on the expanded role of COO/CFO in August. Hofmann told CFO Brew the new title feels like “a natural extension of a lot of what I’ve been doing,” and that Zillow has “gotten to a point where it made sense to extend the responsibilities.”

Hofmann, who was promoted to CFO in May 2023, said the main reason behind the title change was to see whether and by how much Zillow could speed up execution with a combined CFO and COO role. And amid a “super dynamic” housing market, Hofmann said, there’s a lot to learn.

“I’m about as excited as I have been, and I know that just because my brain is fried by the time I go to bed. Like I hit the pillow, and I am just out within two minutes,” he said. “I’m not doing the typical stay-up-late-ruminating-type stuff. I’m just ready to turn it off.”

Seeing double. Hofmann said that while the dual role may not work for every company, he’s seeing it “show up in more companies than not” because of how intertwined strategy, operations, and financial discipline are.

“If you have that good financial discipline, those in the CFO role and those in the finance roles can be really impactful to how you operate the business,” he said. “I’m pleased that we’re doing it here at Zillow, and not entirely surprised it’s happening in other companies as well, particularly in this dynamic an environment.”

Lending, the light way. In 2018, Zillow acquired Mortgage Lenders of America, enabling it to work as a lending partner both with real estate agents and homebuyers. Now, Hofmann said, Zillow Home Loans has increased the amount of purchase loans it’s done tenfold in the last four years.

Hofmann described Zillow as “an asset-light and capital-light lender” that originates loans and “quickly sell[s] them off to government-backed entities.”

“We don’t service loans. We have no plans to service loans. So it’s a very balance sheet-light strategy,” he said. “The primary offtake of the loans is the government-backed entities, so the packaging of those loans is very straightforward.”

Giving customers more. While Zillow Home Loans is an integral part of the business, it’s only one piece of a broader strategy. Hofmann said his main strategic focus is on growing profits faster than revenue, speeding up operational processes, and increasing transaction share.

The goal is to convert more of the “hundreds of millions of people” who visit Zillow each month, Hofmann said, “from the dreaming and shopping phase of their Zillow exploration to buying, selling, renting, and financing. That’s the strategy that we’re going after, and now it’s, ‘How fast can we go, and how much value can we deliver?’”

The strategy hinges on Zillow’s “ability to deliver more and more customer value via transactions,” he added, “whether that’s in agent services, software, mortgages, [or] rentals.”

After defining their strategy, Hofmann said, Zillow executives were able to move beyond “big, strategic debates” and focus on streamlining operations. They’re asking questions like, “What are the things that have to get done first and foremost, and then what follows on from there?”

But he also wants to “make sure we’re concentrating the big bets in a way that we can be as successful as possible…Being in the COO seat, I feel like I have a lot of ways to help push on that speed in a different way than I probably did two months ago.”