Part of what I do for our coaching members is keep them up to date on news and changes in our industry to make sure they have the facts, skills and tools they need to successfully navigate what is happening in the market.
In my research for a recent webinar on leads, I found a surprising amount of information that makes it very clear—once again—that Zillow does not “come in peace,” as Zillow’s former CEO Spencer Rascoff tried to convince us a few years ago. They are financing their own brokerage, Zillow Homes®, with revenues from their Premier Agent® program. In other words, agents are essentially helping their own competition.
According to Zillow Group’s 2019 financials, revenue from Premier Agent accounts for almost 88.8% of Zillow’s gross profit. As a licensed competing brokerage with Zillow Homes, they are no longer simply a “marketing partner.” They are in the business of becoming a one-stop shop for homebuyers and sellers.
At the latest Keller Williams Family Reunion, when addressing tech platforms and Zillow’s acquisition of ShowingTime, Gary Keller, executive chairman of KWx—the parent holding company of KW—said, “If you write a check to Zillow, you’re voting for a Zillow world.” He also said, “Never before in history has who you’re in business with been a vote for the future of the industry.”
An interesting reminder: Before founding Zillow, CEO Rich Barton founded Expedia, which, as you may recall, disrupted the entire travel industry. Then, with Zillow, under the premise of being a media company and lead generation tool for agents, gave homeowners access to housing information and property values—and is now licensing all over the U.S. as a direct competitor to agents.
So, what can you do as a real estate agent or broker?
1. Stay informed. As a savvy sales professional, you should always know what you’re up against and what differentiates you so that you can present your brokerage’s value proposition when speaking with buyers and sellers.
2. Stop paying Zillow for leads. Would you pay to advertise on your neighboring brokerage’s website? Would you fund your competition’s marketing plan? In paying for Premier Agent, you’re doing just that.
3. Advocate for yourself and your business. Become an active part of your MLS and help create change that makes the listing agent’s photo and contact information the priority for property searches.
4. Be the better real estate professional. If you’re doing your job correctly, you should be staying top of mind with consumers in your market, your sphere and your farm. Know how to communicate your value and what you bring to the table.
If you’d like to learn more, read more about our research and watch our webinar at DarrylSpeaks.com/zillow-does-not-come-in-peace/.
Darryl Davis has trained and coached more than 100,000 agents globally. He is the best-selling author of “How to Become a Power Agent® in Real Estate,” which tops Amazon’s charts for most-sold book to agents. Davis hosts a weekly webinar to help agents succeed in changing times. Visit www.DarrylSpeaks.com/Online-Training.
Thank you ! Excellent article that I really hope this will finally open the eyes of the all Realtors especially those at NAR !
Darryl is right. But smaller companies can get even more accurate data to compete with Zillow.
Knowing what your competition is doing in recruiting agents is really not that difficult.
This is HILARIOUS!!! Oh the urgency!!!! Oh the indignation!! TEN YEARS TOO LATE! We have to be one of the stupidest industries in history.
This is exactly what Houzz is trying to do to interior design. Advice from an industry already overtaken by the bots? Here goes:
1. Focus on being more human. Humans can answer questions in person. Humans can see what’s going on. Humans can drive by the property and offer insight.
2. Focus on being a better human. Like real estate decisions, interior design decisions are only partially made on numbers. The rest of it is relationship. It is impossible for a bot to have a relationship with a client.
3. Realize you make money by investing yourself. In interior design, if a company owner was making money by putting stock furniture in their clients’ houses, they were simply a buying service with an opinion. The bots are eating their lunch. If you are a real estate agent who thinks that just showing up and pointing out the bedrooms will make you money, well, Zillow is poised to eat your lunch too. Invest yourself in your clients.
Good luck. This won’t be easy. But it will be worth it. In the end, there will be fewer real estate agents, and all of them will be rockstars.
In my opinion, Zillow is an excellent disrupter for an industry that has long been too cozy among themselves, starting with their fee schedules/splitting arrangements. Of course the old time agents and brokers here will disagree- so be it.. just as the former travel agents did until they gave up or gave in.