The news that Zillow has hired salaried agents to take care of the real estate transactions of its iBuyer division was perhaps as significant as it was unsurprising. A big name property portal looking to move closer to the nuts and bolts of housing transactions by hiring its own real estate agents is a topic that has been addressed extensively by speakers at Property Portal Watch over the last few years, and now with Zillow's 'soft-launch' this week we finally have a good example to watch and take notes from.
Predictably there have been a lot of vitriolic comments in online forums as well as some more measured articles defending the move from former Zillowers, but the most cogent and balanced opinion published last week was from from friend of OnlineMarketplaces, Brian Boero.
Brian is a true industry expert and the CEO of 1000Watt, a consultancy that works with real estate agencies as well as PropTech firms. Having also been president of realtor magazine Inman for a number of years he is in a great position to contextualize Zillow's move…
So here we go…
Zillow is using employee licensees to sell the homes it owns.
Zillow is now a broker in 50 states.
Zillow.com is now powered by IDX.
Seriously, you say?
OK, sure, yeah, it’s a significant move. But c’mon now, it’s far from shocking, isn’t stupid or vindictive, and is easy enough to understand rationally.
Having agent partners sell the homes it buys was always just a temporary contortion for Zillow, an industry anesthetic. That was obvious, wasn’t it?
And the IDX play? If you’re going to become a broker, it seems reasonable to participate in IDX. It’s what brokers do.
So yes: Zzzz.
You may not like this news. I understand. When Zillow announced that it was getting into the iBuyer game three years ago, I was really pissed. Not because I didn’t get the business case for it, or thought it would eradicate Realtors, but because I felt like I was lied to.
But if I’m honest, I have to ask myself what the point of my sanctimoniousness was. Opendoor became a legit thing and Zillow had to react. If I am going to think in principled terms at this point, I’d rather see Zillow win selling homes to consumers than Opendoor win selling homes to institutional landlords.
I don’t like classical music or cantaloupe. But they exist. I deal. Contending with the reality of a Zillow juggernaut is a much harder, higher-stakes matter. But the bottom line is the same: time spent in a state of fear or disgust is time wasted.
Agents, teams and brokerages that process reality fully, strategize and adapt aren’t going to get killed by ZIllow. No Realtor mass extinction event is imminent. And our industry violence has been, and likely always will be, within the tribe: RE/MAX hurt Century 21 back in the day, then Keller Williams hammered on RE/MAX, and now EXP is landing body blows on Keller.
Consumers like and trust Zillow. This is a truth no angst-derived industry solvent can dissolve. If you are an agent, broker or team not on the ZIllow platform, it’s left to you to strengthen your own foundation of trust, to cultivate the affection people may have for you.
You may believe this is just a precursor to Zillow listing homes it does not own — in other words, offering sellers a “take our offer or list it with us” proposition, as Opendoor now does. Certainly they could. But I don’t think they will in the near future. Why would Zillow carry that burden when they’re getting 35% referral fees on the seller leads they’re feeding to existing Premier Agents already? Plus, remember — and I believe them on this — Zillow’s North Star is the consumer, to whom it promises a simpler, more certain way to move to “life’s next chapter.” It’s hard to deliver on that promise when you’re selling a home someone else still owns.
But, hey, if you’re a broker, agent or team in this business, I think it would be a good idea to assume, just for the sake of planning your own strategy, that Zillow will in fact do everything you fear most. What’s your strategy for getting where you want to go if that happens?
That’s the question to focus on. Because I think it’s clear that howling at the moon about what Big Z does isn’t going to produce useful answers.
This opinion piece originally appeared on 1000watt.net and is re-published here with the permission of Brian Boero. If you like what you read you should consider signing up for Brian's excellent Friday newsletter.