by Laurie Schenden CVAR Director of Communications & Marketing
Evil schemer or technological innovator? Either way, some say industry leadership should get credit for much of Zillow’s dominance, if not its success.
Many real estate professionals have tried to look at the positives over the course of the company’s growth, such as how Zillow moved real estate to the internet and showed everyone what was possible by taking transactions online.
Others predicted bad things would happen but saw that the future was in technology, so held their noses and did business with the company anyway.
Some are wondering if they were duped from the start.
Zillow at REvive in 2015
Inman News, a respected new source in the real estate industry, reported this about Zillow’s syndication deal with CRMLS in 2015:
“Zillow Group’s listing syndication deal … stipulates that Zillow will not compete with the MLS as either a brokerage or a listing service. That means Zillow Group can’t charge agents a referral fee for leads they get from its popular real estate search portals, including Zillow.com and Trulia.com.”
“Zillow Group’s vice president of industry development, Curt Beardsley, revealed details about the newly signed agreement with [CRMLS] atReal Estate REvive, an event hosted by Glendora, California-based Citrus Valley Association of REALTORS®.”
That’s right. A Zillow executive spoke at the Real Estate REvive Conference in 2015 and told real estate professionals, including hundreds of CVAR members, that Zillow does not want to be in the brokerage or MLS business.
“But,” Inman reported after the event, “CEO Spencer Rascoff’s observation that agents might be willing to pay up to 40 percent of their commission for well-qualified leads, and the previous year’s launch of “coming soon” listings, raised suspicions from some quarters that Zillow was eager to quell.”
Zillow Group had just signed the deal with CRMLS that month (March, 2015). Beardsley, who appeared at REvive, had recently left Move Inc. ( which is licensed by N.A.R. to operate realtor.com).
“Stop giving Zillow your ad money, listing data; they’re a competing brokerage.”
Jump to about five months ago, when Zillow unveiled its own brokerage.
“Stop giving Zillow your ad money, listing data; they’re a competing brokerage,” wrote Lani Rosales, COO and News Director at the American Genius for Real Estate, an industry publication out of Austin. “The industry funded it, and Zillow Homes brokerage has launched, and there are serious questions at hand.
“[T]he company blackballed us for our screams,” added Rosales, who co-authored “Real: a Path to Passion, Purpose, and Profits in Real Estate. “… the paid talking heads sent out to astroturf, gaslight, and threaten us are now all quiet.” And, she argues, “your ad dollars funded this.”
“Years ago, [Zillow] began acquiring startups that pointed to this end game. Then they promised they were seeking brokers licenses across the nation so their operations and referral partnerships were more legit.”
“The independent contractor business model frees broker-owners from carrying an expensive payroll, but it also gives agents the freedom to do as they wish and express how they feel. Many do, which often annoys the people at the top,” said Inman.
“This, in part, gave rise to Zillow and its marketplace dominance. When it came to the digitization of real estate, executives often failed to grasp the worries and future needs of the working agent. And they hesitated in taking bold steps to act on their behalf….
“How did broker-owners give up their valuable role of providing leads to agents? Many failed to make the necessary technology investments, and consequently, their value diminished and the fortunes of tech companies rose. Why hasn’t a large real estate franchise invested in a consumer brand and built its own compelling consumer search engine?” he asks.
Is Zillow Behemoth Unstoppable?
Now, Rosales asks why an agent or broker would continue to do business with Zillow. In her opinion, if you’re a broker with top agents, the company “will use your data to find the ‘best’ agents.”
“Don’t worry, they swear again on their grammys’ graves that they won’t use their massive data to pinpoint talent and recruit agents from other brokerages, they’ll only use current employees and get ’em licensed up to stand ‘shoulder to shoulder’ with you in your business.”
Sarcastic, but is it true?
“They can’t even come up with their own model, they’ve lifted yours and Redfin’s model. Oooh, innovative,” she mocks, but adds, “at least they no longer have to pretend that they took your money and data all of these years to benefit their eventual brokerage launch.”
Inman sums up his view of how we got where we are today: “Zillow harnessed the power of the internet and delivered tangible value to agents while the legacy industry stood by and let it unfold. Now, Zillow has become the industry’s octopus, its tentacles reaching everywhere.”
In Rosales’ conclusion, she questions brokers and agents, “why then would Zillow remain part of your marketing strategy now that they’ve pulled the final band aid off of the mound of band aids masking their subterfuge of your business?”
When answers to that question become available, watch for them here, in CVAR Connect.