Zillow (ZG 1.53%) (Z 1.59%) threw investors a big curveball recently when it announced its plan to completely exit the iBuying business, despite having promoted it as the major future growth driver for the company. In this Fool Live video clip, recorded on Nov. 4, Fool.com contributors Matt Frankel, Tyler Crowe, and Jason Hall discuss the move and why Zillow might have made the decision to pull the plug.

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Jason Hall: Yeah, so the short version for anybody that doesn't know is, a big part of the Zillow thesis for over three years now was iBuying, which is instant buying, which is their business. They've been growing to buy houses directly from sellers, streamline the process, make it quick, they buy it, invest whatever needs to be invested in the house to profit at resell and then resell it.

Earlier this week, Zillow, I think probably shocks the real estate world is the best way to put it, announcing that it was going to wind down Zillow offers, which is it's iBuying business. It announced a few weeks ago. Matt, a couple of weeks, has been a month yet now, I don't think it's even been a month ago now.

Matt Frankel: No. It's like a week-and-a-half.

Hall: Yeah. It's very recently, they were not going to sign anymore contracts to buy anymore houses for the remainder of the year. I think the way most of us we're viewing it was massive demand, all of the stuff that we've seen with supply chain, labor shortages are a real problem in the construction industry. You think about the timing, getting into the holidays is generally a slower period in real estate anyway, it made sense to just hit the pause button, let things shake out and then reevaluate early next year.

I don't think there were many people at all that expected the company to basically back out of this thing and walk away from it. Rich Barton, Zillow's co-founder, they are still the largest shareholder. This has been his baby. This has been a major initiatives for him. They're walking away. They're not signing any more deals where it is, they're actually trying to find a buyer or buyers to just wholesale unload the rest of the residential real estate that they've either bought or they're in the process of finalizing and closing on buying. What do we see? I think the company took about $300 million write-down for its book of real estate.

Tyler Crowe: It's $300 million for this quarter and they anticipated another $250 million write-down next quarter. It's unwinding position.

Hall: Exactly. Thanks, Tyler. Yes, it's $300 million now and it's going to grow. We know it's going to be more. I think the big thing that I just want to point out too, is that this has been a money losing venture so far. This is a company that's consistently spending $900 million per year more, a nine-figure number every year, more than it's been getting in revenue from its iBuying business. It's been the biggest growth part of its business but here it is.