For months now, the rumor mill has been flying with talk of Zillow and Trulia (now Zillow Group) ending the featured listings placement for brokers and franchisors by the end of 2015.
Large brokers and franchisors who pay $5 to $10 to feature a listing, with all competing agents stripped from the detail pages, are hurting Zillow’s revenue opportunity. Agents within these brokerages and franchises see no need to upgrade to Zillow Pro accounts because they already receive most of the benefits. In addition, these listings are not eligible for ZIP code placement advertising that other agents are willing to pay for in their respective markets, once again hurting Zillow’s ability to increase revenue.
In the past week, I have spoken to three other major real estate company executives — all of whom stated that they are hearing the same thing. They are also all contemplating whether to pull their listings by year’s end if Zillow continues down this projected track.
But from what I can tell, Zillow doesn’t seem to care whether brokers and franchisors will have to pay “market rate” for it. That seems to be code for, “We’re making it unaffordable, so we’ll have access to your listings and agents.” Let the game of “chicken” begin.
Our company has partnered with Zillow and Trulia for more than five years now, and we have benefited immensely from the relationship. We firmly believe in featured listings, so our agents are the only ones displayed. We feel it’s the best service possible to our sellers because the listing agent knows more about the property than anyone else. We have never liked the idea of competing agents being shown on our listings because they are not motivated to sell that potential buyer our listing if they have something similar for sale.
If we were to lose our ability to feature our listings or were priced out of the market, would we pull them from Zillow Group’s sites? At this point, we’re not sure. If other brokers and franchisors in our market went that route, I have no doubt we would probably do so as well. Based on the conversations I’ve had recently, most are simply looking for something or someone to provide a solution whereby they can receive value from their listing data without having to pay for it.
Everyone knows that without the data, the portals would never exist. However, brokers need political cover from their agents and customers. And therein lies the enormous opportunity for realtor.com to join in the game of “chicken.” Sure, the company has begun to play chess with Zillow by trying to pull ListHub as an option for Trulia, but if it’s really going to shake things up, it needs to pay attention to what the Realtor community wants from third-party portals and focus on the game that Zillow Group is about to play with the brokerage community.
If realtor.com actually wishes to get competitive with Zillow Group, it should do the following immediately:
1) Start a national Realtor advertising campaign called: “It’s your data, and, therefore, those are your leads.” Showcase all listings on the site immediately — or, to put it another way, remove all competing agents from each listing. Make Zillow Group’s business model more contentious than it’s ever been. Send all buyer inquiries directly to the listing agent. Display the listing agent’s photo, contact information, social media links and brokerage information, and make it all extremely Realtor-friendly.
2) Advertise these benefits extensively to the Realtor membership. Sure, Realtors will need to pay for additional products and advertising opportunities to make up for lost revenue, but not when it comes to inquiries on their listings. The Realtor community would start to rally around realtor.com if everyone were receiving these benefits. (And Realtors would consider pulling their data from other sites that don’t follow suit.)
3) Provide the traffic data on every listing back to the agent, brokerage and franchisor. Give it to them in different formats and make it easy for the agents to provide this information to the seller in traffic reports. Use ListHub to your advantage — you already have the product.
4) Put a home value estimation tool on the site. Make it extremely Realtor-friendly — in other words, make sure the consumer truly understands that it is an automated tool and simply a starting point in determining a home’s value. Show a percentage range of expected accuracy by ZIP code.
5) Ask the consumer to create an account on realtor.com to receive an actual CMA (comparative market analysis) from a local Realtor to help balance the automated valuation. Realtors can pay for this service to receive exclusive seller leads. Realtors need to be the focal point of home valuations, so give the consumer an estimate and follow it up with a real CMA or multiple. By giving consumers an actual CMA, Realtors increase their value proposition, and they will love you for it.
There are tons of other products that realtor.com could create to replace revenue from showcased listings, and the new leadership team has a huge opportunity if they simply listen to what the Realtor community wants and plays a different game than Zillow Group. If realtor.com were to insert itself into the game of “chicken” and stand behind agents, brokers and franchisors, it would win back the hearts and minds of the Realtor community, and every broker and franchisor across America would embrace realtor.com again.
We are thinking about selling our home on our own. If a buyer comes in with a Realtor do we still have to pay their agent the 3% commission?
That depends on whether you choose to “cooperate” with agents or not. If you do not, agents will not bring buyers to your house. If you do cooperate, some agents will bring buyers, but if their client makes an offer and closes the deal, they will expect to earn a commission. A three percent commission is customary, but you can attempt to negotiate, too.
Before an agent brings a client to your house, they will probably stop by and ask you to sign a “one time show” agreement. This prevents you and the buyer from negotiating directly in an attempt to not pay the agent’s commission.
“I can recommend Bill Buffington without reservation. It was a pleasure to work with him, he was knowledgeable of the area and all of the properties I was interested in. Bill responded to my viewing requests promptly and always arrived before the appointment time. Bill was also excellent in the follow-up throughout the process after the deal was made up to close of escrow. A very happy customer, Ann Noble”
It appears that a trend of home buyers using a larger down payment is gaining traction.
“Fewer people bought a house with just a 3% down payment in 2014 than in any of the previous 10 years. That might sound like a positive thing because it means the purchaser owns more of the house and the bank owns less, but experts say it suggests that first-time buyers are not fueling the housing recovery.”