Last month, Zillow made an announcement that was not much of a surprise to many across the industry: The portal-turned-iBuyer officially formed its own real estate brokerage, Zillow Homes. But what does that mean for real estate practitioners?
In order to gauge the industry’s reaction to the news, RISMedia launched a survey, gathering the insights of over 2,000 real estate professionals. Here are some key findings:
– Eighty-seven percent said Zillow’s foray into the brokerage space is a “negative” for the real estate industry at large, while only 3 percent said it was “positive” and 10 percent had “no opinion” on the matter.
– Sixty-four percent said Zillow’s announcement should be viewed as a “negative” for consumers in the market, while 9 percent believe this is “positive” news and 27 percent said they had “no opinion” on the matter.
– Seventy-five percent of those surveyed are not currently Zillow advertisers, while 25 percent are.
– Sixty-eight percent are not currently Premier Agents, while 32 percent are.
– Of those not currently using Zillow’s advertising platform, 95 percent said they would not consider advertising with the company in the future following their brokerage announcement.
– Of those who do currently use Zillow’s advertising platform, 62 percent said they would be pulling their advertisements due to Zillow’s brokerage announcement.
With this in mind, how will brokerages respond to the news? Some may ask their agents to pull out of Zillow’s advertising and lead generation programs, or disconnect their MLS-to-Zillow listing feeds altogether, while others may double down on their own competitive advantage while continuing to use Zillow’s services. Here’s how practitioners across the U.S. are responding;
“The National Association of REALTORS® (NAR) cannot sponsor or encourage a boycott of Zillow. It would be unlawful for NAR to discourage members from using any product or service provider. Those decisions are made independently by MLSs, brokers and agents. Likewise, it would be unlawful for local or state REALTOR® associations to encourage members to withhold listings or business from any third party, such as Zillow, or adopt policies that would preclude members from doing so. What NAR can do is the same thing we’ve always done, and will continue to do in the face of a long line of business models offered to consumers to sell their homes without the use of a REALTOR®: Undertake renewed efforts to remind the public—and to encourage and help members inform their clients and customers—of the value they bring to the real estate marketing and sales transaction, and the problems and risks sellers may encounter in marketing and selling their home without using a REALTOR®.” — Christina Asbury, Broker, Coldwell Banker Sea Coast Advantage; NAR Professional Standards Committee
“I saw this coming five years ago. I even asked a Zillow representative at the convention in D.C. at a sponsorship get-together if they were interested or thinking about getting into real estate. Their answer was ‘no.’ I did not believe it. To counteract, I am implemented old-school real estate tactics—building on relationships and keeping in touch with past clients. So many real estate closings are held together by experience and communication—that has been lost with a lot of technology. Zillow is here to stay and now is a normal real estate company like any other. We all need to work together toward one common goal: provide a great, smooth closing for all parties. Life goes on.” — Jay Dowdy, Broker/Owner, Berkshire Hathaway HomeServices All American Homes
“The Zillow announcement is predictable, even though they have been saying for years that they wouldn’t become a brokerage. What it reveals to me is how, nationwide, our MLSs have put handcuffs on agents, not allowing them to put their contact information or branded virtual tours out to the public, and leaving room for companies like Zillow to build their empire on the backs of our listings. Zillow is no more a threat than our inflexible institutions allow it to be. The National Association of REALTORS® and our MLSs need to put the power back in the hands of the agents to compete effectively in a tech and data-driven reality. For sure we will be pulling our new construction advertising [from Zillow]. Agents will have to make their own assessments as to the quality of leads they are still receiving and paying Zillow for, of course. I support the freedom of the agent to find multiple streams of businesses.” — Courtney Poulos, Broker/Owner, ACME real Estate
“Good agents and companies focus on their own business. Professional, outstanding service is the separator in real estate, and always has been. Zillow’s announcement doesn’t make us take our eye off the ball. With that being said, our agents will be turning to other lead sources to spend their marketing and lead generation dollars on (i.e., realtor.com®).” — Steven Wilke, Broker, Weichert, Realtors®.
“I believe that there will always be a new type of brokerage that will challenge the real estate industry with innovative ways to service buyers and sellers. Consumers will determine if this type of brokerage will succeed. As a REALTOR®, I will support the organization’s decisions in regard to this situation.” — Patricia McLaughlin, Broker, PJM Real Estate
“Our agents have been distancing themselves for years in anticipation that Zillow was exploiting our data and information. I am not decided yet as to how this will affect our industry. The highest and most productive agents will continue to grow and flourish and enjoy the independence of the business. I do feel that our training and education has set us apart, and we are in a good position to overcome any Zillow objections. We have faced many threats in our industry, and I imagine many more will come. As long as we stay focused on the consumer and the relational experiences, we will stay relevant and needed. There is plenty of business to be had by all. Focus on education yourself, master all the necessary skills sets and provide value—you will be fine. — Terese Brittingham, Broker/Owner, Terese Brittingham & Thomas McCouch Sales Team, Keller Williams Realty Group
“We knew Zillow was a disruptor from the beginning. My brokerage focuses on relationships and will continue to provide the customized, relational service we have done in the past. Disruptors come and go, exceptional service from top-notch professionals remains.” — Liz Tardo, Broker/Owner, NOLA Home Realty Group
View our entire survey findings below:
Brokers, how will you be responding to Zillow’s news? Let us know in the comments.
Liz Dominguez is RISMedia’s senior online editor. Email her your real estate news ideas to ldominguez@rismedia.com.
Our board thinks it violates a competition law to not send our listings to zillow but we all knew this was coming 20 years agao when we started sending our listing to news papers and magazines I am shocked it took this long. BTW these are the same fools telling us people with need realtors cause buying and selling homes is personal and cannot be bought without an agent.
Thanks for the article. I am an agent and broker licensed in two states and working on Fl. license. I paid Zillow for a few years but despise that their rates have have increased while decreasing their service to adding sold listings to your profile, plus tell you they screen people, which they don’t to amount to any help. I have wasted endless hours with them. They put your name beside foreclosures and for sale by owners. I saw this coming about 4 years ago. I wish I could sort them out of our MLS’S in Tn. & Al. when we syndicate listings. And where do they get Zestimates? I am no zillow fan.
Dale Sharp
This is typical big box, mega large companies, like Amazon and Google and Facebook just taking over everything they can, because they can with unlimited funds! In reality they take basic matrix information, not knowing the quality of a home, the condition of the home, improvements to the home and throw out a frivolous value. Personal hands-on real estate requires thorough and accurate research and information so sellers and buyers are able to be protected and served well. Zillow appears just to be another big “Godzilla monster“ stomping on everything in their path. I hope Realtor’s nationwide, rebel and provide better service to clients than these monster companies ate even capable of doing.
I am a realtor here is California, and I think Zillow is really bad for the Real Estate business in general, both for the Realtors and for the buyers/sellers engaging in business with them.
As an appraiser, I fight the “Zillow Says” statement constantly. I feel like this entire company formed itself by essentially republishing everyone’s information. They are sort of like the AMC for agents and brokers. Appraisal Management Companies wrecked appraisal businesses for many and have tried to take over just about everything related to appraisals. Zillow is much the same. Many corporations are slowly taking over the entire real estate industry such as CoreLogic which has been purchasing MLS systems and appraisal software companies rapidly for quite some time. The impact will not be good and is terrible for the entire real estate industry.
This is no surprise at all. I see it as they become a listing and selling brokerage that they will become just another franchise like business model . As for their Buy Your Home Plan, wait until the next downturn in the market and their sitting on a huge amount of inventory. That will certainly increase the amount of money that they have been hemorrhaging for quite some time. It will be interesting to se how it all unfolds.
Our brokerage turnEd off our listing feed to Zillow over 8 years ago. Agent leads skyrocketed, listing leads were directed back to our agents. We had a 30%+ listing market share so consumers turned to our IDX web site for 100% of the listings not Zillow. They will now be members of various boards so to opt out we would have to opt out of IDX. Makes no sense now. Just deliver better service, better trained agents, more consumer services, marketing and advertising as a brokerage and they will be just like any other competitors. In other words add Value!
As a Realtor for over 20 years, I spend a good deal of time trying to explain to clients why the Zestimate is wildly wrong most of the time. It will be interesting to see how Zillow real estate agents handle this issue. LOL
Our listings are fed to other broker websites (IDX) and those listings become subject to the advertising and offerings on those sites. How is this any different from IDX? Hate to remind you all, but you have local brokers in your own backyard doing things you may not like and you/they share data on each others sites already.
Why would any agent or broker do anything to support a competitors business over their own? I consider Zillow a competitor thriving off the work I pay my MLS to provide. Some how it’s now considered public information?
We have a choice of if we want to syndicate our listings here in Houston…. I do not syndicate as a broker
During the pricing discussion show the potential seller their Zestimate . In this area almost always substantially lower than their dream number- then explain that buyers all have access to Zillow and the many,many services Z. does not provide
I blame NAR leadership…or lack of! Why would we sell our info and then have to buy it back???
As a real estate investor, landlord, renovator and licensed broker who has never made a living off sales commissions I find this development amusing. In decades past local real estate boards kept an iron grasp of the MLS to ensure that every home seller (with the exception of a few hardy FSBOs) was forced to pay up thousands of dollars to the “agents”.
Oh the crying and wailing taking place now! Agents have over valued and over charged for the service they provide for years. Now the game has changed. The winners are the home owner and the consumer, the losers are traditional brokers. A similar thing has happened in the auto industry regarding the factory invoice pricing. Read up on that; you’ll see that dealers are still profitable. They simply got more creative in how they bilk the consumer out of their money. The real estate industry will do like wise.
This move was completely predictable. Everyone knew that Zillow was lying to all of our faces for years when they said they would not get into brokerage. It’s nice to think our precious clients, and years spent cultivating relationships will overcome the competitive wave of Zillow. Unfortunately, I think Zillow can and has been doing a very effective job convincing buyers and sellers that Zillow is the only one-stop-shop they need. Our clients may love us, but you’ll see how quickly they drop us in the interest of saving money. NAR is clearly too afraid to stand up to Zillow and I truly fear for the future sustainability of Realtors. I worry that we’re going to look back and wonder why we gave Zillow so much free data and paid them with ad dollars to take our jobs away. It starts with Zillow. If they have success, watch Quicken, Amazon, etc. jump into the business as well. Where does that leave us? The time to do something about it is now. The time for NAR to step up and start representing us is NOW.
Zillow needs to somehow GO AWAY. Consumer’s do not realize or understand how it is screwing them. It is an information data collection service that is back by BILLION dollar Wall Street hedge funds to gather information on consumers. They have lured consumers to their site by spending BIG Wall Street money on their warm & fuzzy radio and TV ad, so much so, that many consumers have been trained to go to their sites first, to get information about properties, (mostly wrong and misleading), rather than contact a legitimate realtor.
If one asks a consumer, who has used Zillow, the question, Where to you think they, (Zillow) gets their information from?, Almost always they will give you a blank stare, as they have no clue. In most cases it coms from MLS’s in the various market areas in the country and the most accurate data is imputed by Realtors
They forced MLS’s around the country in the early 2000’s in the time of the housing crisis, via lawsuits, (whining that information was being withheld from consumer’s, anti-trust), to force them to capitulate and give them their data by for free. They would lie and claim they were just collecting information, and had no plans to become brokerages, (THEIR BIG LIE). They did this by tapping into the monies of those BILLION dollars Wall Street hedge funds, to fund their law suits,(Conspiracy? Perjury?) just wondering.
One can not help but wonder with now going into the brokerage business, will they be held to the same rules and very high Code of Ethics that all Realtors must abide by and strictly adhere to? Or are they now above the law? Until the general public sees Zillow and the like for the frauds they are and harm they do, they seems to have established themselves and still give wrong information(what’s a zestimate)? Perhaps their seedy practices need to be fully investigated by Federal investigators as they lied, as now they are in the brokerage business.
I recall negative comments (complaints) about Charles Schwab being a no-service discount broker years ago. The stock brokerage industry changed significantly while fee-based, professional, astute, Certified Financial Planners became the norm. I believe Zillow Homes is only the start of a major transition in the real estate industry in which listing fees will decrease while buyer agents who really know the market will increase in demand. Buyer agency fees may be impacted and we may have fewer buyer agents serving somewhat better informed but overwhelmed buyers.
One way to shut down zillow is to avoid co operating on any of their listing.
Greedy, lazy agents created this monster. They’d rather pay for leads off their own sweat than to work their sphere and just meeting people. Zillow now is buying homes like crazy. I feel bad for the LA because this will be your problem. As a buyers agent it doesn’t affect me as much.Wall street loves Zillow because they will eventually be buying up homes and then renting them. Enjoy while you can.