Bad PR Week for Zillow With iBuying and ShowingTime Deal in the Spotlight

It's not been a great week for Zillow. Aside from its share price dropping to the lowest levels since the worst of the pandemic, the Seattle based firm has been dealing with some negative headlines and unwanted scrutiny.

FTC decides to resurrect ShowingTime acquisition investigation at the 11th hour

According to an article in theinformation.com, the new zealous head of the Federal Trades Commission Lina Khan has resurrected a review into Zillow's controversial $500 million acquisition of home viewing booking platform ShowingTime.

This despite lawyers from the US Federal Trade Commission saying that they had no issue with the deal back in the spring.

Zillow had expected to close the deal this month but is now reportedly being told to do so at its own risk with the threat of the acquisition being kiboshed still very real under a new anti-trust regime in Washington that is ruffling a lot of big tech feathers.

The deal between Zillow and ShowingTime has been contentious since it was struck in February. Many realtors are upset that Zillow is not only barging into another area of the real estate value chain but also that it will have access to ShowingTime's analytics and buyer data.

Zillow has given assurances about its intended use of ShowingTime data but the worry remains among many rank and file realtors that the tech giant might use the data to bypass realtor services.

NAR urged once more to drop the so-called 'segregation rule' on Zillow

A lawsuit filed in March against Zillow and the National Association of Realtors by discount brokerage REX is still rumbling on in the US press.

Earlier this month a judge dismissed pleas from the defendants to dismiss the case and now REX's CEO Jack Ryan has written an open letter to NAR bosses urging them to abolish what he calls the 'segregation rule' which obliges Zillow, as an NAR member, to put listings from non-NAR members on a separate tab on its portal.

The letter comes ahead of an important meeting of NAR big-wigs in San Diego scheduled for November at which the industry association is set to decide on several rule changes.

Well aware of the exposure his letter would get, Ryan wrote:

“This meeting is the perfect opportunity for NAR to address various policies which currently prevent hundreds of thousands of Americans from achieving the American Dream of home ownership,”

In a pithy comeback to Ryan's letter, NAR President Charlie Oppler said:

“REX continues to make unfounded claims and attempt hollow legal maneuvers then rehash those in the media to make up for its business shortcomings,”

In July the Justice Department pulled out of a proposed settlement with the NAR which would have put Zillow in the clear and now the case and the parallel PR battle is set to continue.

Rivals stick the knife into Zillow's iBuying in the press

It seems that for those wishing to denigrate iBuying and the big corporations behind them, now is the time to bring out the knives.

After last week saw Zillow and Redfin forced to comment on a viral TikTok video, iBuying is very much in the spotlight stateside.

In a Vice article this week iBuyers were described as "price-distorting entities" by Vishal Garg whose firm Better.com buys homes on people’s behalf without charging a commission. In the same article, Knock CEO Sean Black, who sold Trulia to Zillow in 2014 for $3.5 billion, is quoted as saying that iBuying passes an unnecessary "cost to the consumer".

Also coming to light this week is news that Wall Street is being asked to foot the bill and assume some of the risks of iBuying through bonds backed by unsold homes. Zillow raised $450 million to fuel its iBuying division last month via an oversubscribed bond issue according to Bloomberg.

Although hardly surprising for such a capital intensive business, the story has got a lot of coverage in the financial press with some speculating that with a downturn seemingly looming over the housing market the financial sector's increased exposure could become problematic.