Tell Us What You Think: Quick Survey Included Below to Share Your Thoughts About Zillow Starting a Licensed Brokerage
If you look at Zillow’s progression over the last several years, from Zillow Offers to Zillow Home Loans and Zillow Closing Services, you might guess that the company’s latest news—launching its own brokerage, Zillow Homes, to service its iBuyer segment—is simply the next step in a long-planned strategy.
In 2017, following Zillow’s launch of Instant Offers, RISMedia published a survey, asking real estate practitioners if they believed the company’s iBuyer program was a shift toward the portal becoming a brokerage. An overwhelming majority, 86.9 percent, said “yes.”
Most respondents, over 80 percent, said Zillow Instant Offers would be a negative addition for consumers in the marketplace. This distrustful view may have a lot to do with the uncertainty of what consumers prefer: working with a licensed real estate agent for a more personalized experience or reaching out to an iBuyer and, perhaps, sacrificing customer service and value for a more expedient approach.
According to RISMedia’s survey, 10 percent of respondents said consumers would likely sell to an investor versus listing on the open market if given the choice, while almost 30 percent said they would not. Here’s where the uncertainty comes in: The majority, 60 percent, said it would depend on the circumstances.
Three years later, we’re looking to the industry to provide us with their thoughts on Zillow’s latest news. Especially for those who are currently Premier Agents, how will the launch of Zillow Homes change your relationship with the company? And what does this mean for the industry at large?
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When we published our 2017 survey, a Zillow spokesperson told RISMedia that the company had “no intention of becoming a brokerage.”
“We have always felt, and will continue to maintain, that agents are a crucial part of the real estate transaction, and our goal is to find ways to continue to integrate them in the transaction process, even as the process continues to grow and evolve,” continued their statement.
A central question remains: Is Zillow’s goal of integrating agents in the transaction process intact, or have things changed in the last three years?
Zillow’s recent announcement states that the company will continue to expand and leverage its Zillow Premier Agents service—with this segment continuing as “the preference of Zillow’s customers.” But Zillow Group’s Chief Industry Development Officer Error Samuelson recently stated that Zillow Homes will not be recruiting agents from other companies, and will, instead, be licensing existing Zillow employees under the Zillow Homes entity.
Have viewpoints changed since we surveyed our readership over three years ago?
A point of contention is Zillow’s ability to now join MLSs as well as real estate associations. In Zillow’s recent announcement, the company said it has plans to join local real estate associations as well as the National Association of REALTORS® (NAR).
NAR President Vince Malta responds to the news, stating, “there is always room for competition in America’s real estate market, which should ultimately only deliver better options and services to consumers.”
“Real estate transactions are unique because they are rooted in a Code of Ethics and built on the foundational tenet of cooperation amongst competitors. These ideals have served consumers well for more than a hundred years, and we’re confident the values of cooperation, accuracy and transparency will continue to define our industry as we move forward,” adds Malta.
Jim Fite, president and CEO of CENTURY 21 Judge Fite Company, believes that while Zillow’s licensed agents will pay their dues to local associations, “they will not be involved in giving back to our profession or our communities, in my opinion.”
“What comes next?” asks Fite. “Retail: recruiting agents and even having a bigger impact on our business as real estate professionals.”
For many brokers, the news is not surprising despite Zillow’s previous statements that they would not be transitioning into the brokerage space.
“I’m a little disappointed,” says Michele Harrington, broker of record/chief operating officer at FirstTeam® Real Estate. “They touted for so long that they weren’t going to be in the brokerage business and had a ‘different model.’ Having said that, I think they’ll find that the brokerage business is a lot less profitable than selling leads to agents, so welcome to the biz and good luck!”
Candace Adams, president and CEO of Berkshire Hathaway HomeServices New England & Westchester, says, “We saw this coming, and it should be no surprise to anyone that Zillow is getting into the brokerage business.”
In 2017, Adams told RISMedia that whether it was Zillow’s intent or not to become a brokerage, “their actions speak louder than words.”
“They have continued to shift their business models and I would expect that to continue,” she now says. “Next will, no doubt, be a full brokerage. It will be interesting to see how they blend their historic marketing models with an outright competitive position.”
Anthony Lamacchia, broker/owner of Lamacchia Realty in Massachusetts, after a few years of hanging on and believing the company, deciphered Zillow’s roadmap, stating he has no doubt the company will eventually become a full-fledged brokerage and compete “with every one of us.”
“In about 2018, it began to be clear to me they would, so we bailed out of buying any leads or doing any business with them,” says Lamacchia. “I am glad we did so we have no dependence on them. I will say, I feel bad for those who hung on and continued to believe them as I stupidly did for a few years. Anyway, it’s capitalism; they have a right to do it. They have some smart people there and I am sure they will do well.”
An edge against the concern that Zillow’s model could be harmful to brokerage’s business is this: enduring agent-consumer relationships.
Christina Pappas, vice president of The Keyes Family of Companies, says that her 90-plus year-old brokerage has seen many models, disruptors and corporations enter the business.
“One thing is certain: our brokers, our agents and our industry continues to evolve and adapt. We also know real estate is a relationship business, and it is impossible to replicate nearly a century of those relationships and a firm’s established credibility,” says Pappas. “Additionally, 80 percent of the deals closed are from referrals. We believe competition in our space is healthy and makes everyone better. With any new company in our marketplace, we as a brokerage will continue to sharpen our skills to ensure our REALTORS® are able to articulate their value proposition and maintain their position in the center of the transaction.”
RE/MAX CEO Adam Contos is of the same school of thought, stating Zillow has simply realized what today’s brokers have known for a long time: “The consumer experience is driven by having a skilled agent at the heart of a complicated, ever-evolving transaction.”
“But that agent needs to have the skills, knowledge and insight to overcome obstacles that can derail a sale—and those qualities develop through real-life experience. The concept of ’employee agents’ has been tested for decades, but most buyers and sellers, voting through their actions, prefer an agent who’s much more than an in-house transaction coordinator. Often, it’s an agent they know, like, trust and have a relationship with,” adds Contos.
This is a developing story. Stay tuned to RISMedia for updates and let us know what your thoughts are by participating in our new survey.
Liz Dominguez is RISMedia’s senior online editor. Email her your real estate news ideas to ldominguez@rismedia.com.
This should come as no surprise to anyone paying attention to our industry. The big “Z” has determined where they want to be in the process and are forging ahead. Everyone needs to pull up their big girl panties and stop whining about … “But they promised they would never…”. Regardless of whether this was a long term plan or a more recent redirection of the company, they are now a broker and as such, deserve our treating them like any other competitive broker. And we must remember that our Code of Ethics requires us to mind our manners.
I remember the days before zillow, realtor.com had a site that barely worked so the door was left wide open. Now agents have to be members of the mls to see the info. Why did our community allow zillow in years ago to access that info without paying high premiums just as agents had to. This is an industry failure, the leaders have allowed zillow in and now we must all suffer. Thank poor leadership for this breakdown of the industry to come.
DO YOU KNOW WHAT ZILLOW WILL DO WITH THE PREMIER AGENTS THAT ARE WITH THEM NOW?
I only advertise on Zillow because my MLS syndicates to them….and because many clients have become comfortable looking at properties on Zillow, even though I can offer them better search and viewing services. I am not a Premier Agent and will not pay for leads. I expect agents working for Zillow will do so because they can not generate business on their own and through traditional networks. I think most sellers will continue to want “hands on” service and will want to work with local trusted sources. Either that or they will migrate to learning and using technology and selling themselves.
STOP buying leads back from Zillow which we provide for free thanks to our boards. If everyone stops buying the leads at once we can get the leverage that was signed away years ago.
For YEARS Ive told fellow brokers not to support Zillow. For years Ive wanted the MLS systems to not let them have access. Everyone and their cousin and dog want a slice of the pie. Personal (and accurate) service will suffer. Zillow already has the public very confused over values—Ive had to set so many owners straight on what their value after they looked in Zillow. This is going the way I predicted 15 years ago—there will end up being a kiosk in fast food franchises where you can do your transactions and spread your money through a bunch of people you will never know.
Christi—I dont wear panties! You want to Welcome them in with open arms and remember our code of ethics??!! There is a big difference. How would you respond if I started a large real estate advertising agency and charged real estate brokers to have their faces on information that is already available in MLS systems? Information that you worked hard for to be in systems you paid big money for? You pay DUES for? Would you do that if up front I told you my huge profits were going to be used to become your competition and take business from you. THATS WHAT THEY DID. To ‘possibly’ (THATS GENEROUS) degrade the industry and throw out personal service? Well this just happened but it was without the open disclosure from the front. Everyone and their cat and brother in law are after slices of the real estate commission pie. Yeah I wont go against a code of ethics if dealing with Zillow real estate. I wont start an anti trust problem by not doing business with them or advising anyone else not to, but come on. In fact, How about if Microsoft says its taking profits from your windows subscription and starting a huge new brokerage?
How about safeway foods charging to have your name on the carts and walls, but then using those profits to start a real estate brokerage? If you are fine with that PLEASE send me $10,000 as I plan to open a new office close to yours. Ill parade your sign on top my car around town for 3 months so you get something for the money. Ill be looking for your local competitors too for other car top signs. When I make enough, my huge new discount office will open up in your midst. I take PayPal.
You dont consider the possibilty of all these cooks in the stew possibly degrading the level of professionalism and personal service?
And this comes as a surprise how?
While it chaps my rear end to an extent I have never know before; my friend (and she really is) Christi is absolutely correct. We must remember “THAT’S WHO WE R” means upholding our code of ethics even if we have to hold our nose every now and then.
Just make sure they are held to the same high standards and don’t be shy about calling them out.
The Big Z, just became one of us…
The real estate industry has been lied to and manipulated by these past few years. They have played for fools promising that they had no interest in competing with brokers and agents while all along they were lying to keep our advertising dollars coming in to use against us. They built a mega empire by selling our own leads back to us and we have let them get away with this grand deception for far too long. They are taking food off of our tables and laughing all the way to the bank without remorse for their constant lies and deception. I’m calling for ALL Agents to pull advertising immediately and for ALL Brokers to end their cooperation with Zillow immediately.
The comments on here are amazing. Not a single one mentioned that NAR is doing exactly as Zillow. Realtor.com is taking our listings and selling leads back to us. Who owns Realtor.com? NAR. They all want a slice of your pie, so why is anyone surprised?
One question to consider: Did Rocket Mortgage put local lenders out of business? There will always be a percentage of the market that just wants a transaction and needs no additional service. (They say.)
The element local Realtors must provide is exceptional Service. Everything that Zillow currently cannot provide. What that looks like to the consumer will be for the consumer to decide. It is our mission to uncover what buyers and sellers intrinsically want and need from their local Realtors, and to super-serve those needs. (And to advertise to the market what that difference is.)
That said, we must not be indifferent because just as Amazon has changed the face of local, regional and national brick and mortar businesses…so will Zillow Homes with its critical mass and abundant data affect how local real estate brokerages do business. Local Realtors will need to work smarter than ever before to differentiate and to truly connect to the new consumers who will tell you they have never been inside a bank lobby and now shop exclusively online with “trusted” Amazon Prime Businesses who have hundreds (or thousands) of positive reviews and free delivery.
I would not be surprised to see Amazon purchase Zillow in the future.
only thing NAR wants is dues. more agent more dues and the fat cats in the ivory tower make more money. Defund all national, local associations. The fight for agents has been a slow death since agents started giving away the MLS data.
The ibuyer is a flawed model. I hope it costs them billions.
The NAR sold us out by providing these adversaries our best assest as an association – skills, inventory and information. NAR then sealed our fate once they sold Realtor.com to anti Realtor entity. Its time to disrupt Realtor Association, they took the gloves off and walked away with Billions of dollars under the fraudulent guise of being for Realtors by Realtors.
Exactly–its been 3 years now folks. See what happened?
When Realtor.com started and had all access to all of our MLS info, I told our local board and broker….”This is a bad idea!!” We just kept giving and giving. And here we are..
I can not believe that Realtors buy their leads after the Realtors do all the work. How insane is that? I have been selling for 18 yrs & have never bought leads. All Realtors should stop buying leads. Our local associations have sold us out & are cutting their own throats too. I dislike the lack of professionalism that Zillow brings to the table. Buyers call who they think is the Listing Agent from Zillow & the Buyer talks to someone that does not know very much about the listing. The Buyer gets frustrated & think the Listing Agent is an idiot. Looks very bad on us. I am tired of working so hard & not getting that phone call about my listing & missing out on the opportunity to talk to the prospect. My phone used to ring all the time but that stopped when my leads were sold to other Realtors. I would like to get those calls after doing all the work. Local boards have to STOP selling us out because it will be to their own detriment also. They will be gone without us. They also need to reduce our dues because we receive much less service from them than we used to in the past. Stop giving Zillow your money & making them more powerful. Get out & get your leads on your own.
Zillow has been out to take over the RE market for years. They also mine and sell every key touch anyone does. Has anyone noticed that their Zestimate published with properties is EXTREMELY INACCURATE. Everyone sees them posted next to the listing..then makes low offers. Most of us that have been around awhile can do a CMA or Brokers opinion pretty much in line with an appraisal. I have taken to showing all of my prospective listings the Zestimate garbage