When Zillow was first rolled out it was simply presented to the Realtors as another tool to expand our marketing. It's now become not only a burden but a detriment to Real Estate agents and the consumers who use the platform. Once introduced Zillow had the capability of using all of the listings to market on a global platform to make it more user friendly for the Buyers to find their future home. In the beginning it worked as it was promised and drove more traffic than any of the other "Real Estate" websites, in fact it was #1 in less than a few years with more traffic than the next two competitors combined!
In the next few years the company rolled out it's own CRM (Customer Relationship Manager) platform to help agents track leads that came from Zillow. For those of you not familiar with the agent side of Zillow, this is how it worked. If a potential Buyer clicked on a home they had an option of choosing to send a message to the "Listing Agent" or just send a general message. If you chose to send the general message an agent would receive the message and the potential Buyers information would be loaded into their CRM database. The agent that received that message did not represent the Listing at all and how they obtained the users information was because they purchased specific zip codes associated with the location of that property. Now, that agent has captured a Buyer without a lot of effort besides the monthly payment associated with the geographic location of the property. In theory this seemed like a great idea, but it was merely an illusion that fooled our entire industry into selling our soul to the devil.
FACT! Zillow owns nothing! That's right. They do not own a single item of value, no assets! Yet, they trade on the NYSE as (Z)(ZG) and in 2020 had a net revenue of $3.4 Billion! My hats off to them, as they have come up with an easy to use platform that connects potential Buyers to property and don't own a single thing. Who owns all of that data? Who represents all of those properties? The details, the writeups, the photos; all that information? The Real Estate agents and their associated companies are the ones who own all those rights. That's right! Zillow only borrows the information from the respected companies with permission from the companies themselves. I know what you're thinking. why don't these companies just shut down the service that provides Zillow this information and it would literally put them out of business. Well, in theory that would 100% put the agents back in control of the situation, but it's not that simple. Which is why it completely blows my mind that a company that owns nothing can be trading at $50+/share; seems like a risky investment when their entire platform could go to zero listings over-night.
Today, Zillow has built a platform that the majority of Buyers use to find their homes and they rely on that system which in turn has gained the attention of the Seller; who is adamant about his home being on the platform and at the same time complaining about the "Zestimate" (An assessment Zillow created to come up with your homes value). So, now you have an agent who feels as though they must comply in order to appeal to their Seller's advertising needs knowing very well that they are giving Zillow free information to use at their discretion for their own profit. Which brings me to how real estate agents sold their soul to the devil and how it's costing more than just "zip codes".
When an agent signs up for Zillow they create a profile, just like any other profile on an advertising or social media platform. Once they create that profile and it's linked to their MLS ID (unique identifier which associates them to their specific lisitngs) their listings are automatically uploaded to Zillow when they put a new home up for sale. Now, on the opposite end of that spectrum you may have an agent with zero listings who is looking to help Buyers as they have no inventory to sell. That agent may purchase a zip code, where they will be guaranteed to get leads in the associated area. Agent A, who lists a property in that location may not get the lead on their own listed property because Agent B has purchased the rights to capture those leads. Now, imagine for a moment that you sell oranges for a living. The best way to sell these is to go to the #1 orange selling website on the planet. You list your oranges for sale, but instead of getting a Buyer you get an agent of a Buyer who will buy all your oranges but it will cost you more. That's exactly what it's like for Real Estate agents.
"Moral Justification"- As Zillow started selling back the agents own product to themselves they literally could do anything they wanted and the agents had no choice but to continue using the service. It came to the point where "everyone is doing it so we must do it"; which is exactly where we are at today. Meanwhile, Zillow has put on a full court press while spitting in the face of the entire industry by starting their "iBuyer" campaign. Which they started purchasing property with their own agents and flipping that property back on the market for a profit. Well, fortunately for Real Estate professionals, Zillow is horrible at selling property. They failed miserably and took a loss of nearly $300 Million dollars and their stocks plummeted 60% in a single year.
I admire Zillow's grit, determination and ability to manipulate an entire industry without anyone noticing until it was too late. They figured out a way to sell our own information back to us and making hundreds of millions of dollars doing it. I am however upset with my own industry. As a fellow Real Estate agent it's appalling that we are devouring each other over greed. We spend thousands of dollars a month to take leads from one another through a platform that does nothing but try to discredit the agent. A perfect example of this is the "Agent Reviews"; which I have a huge problem with.
On Zillow, just like on Amazon or any other platform where a consumer purchases an item, the reviews is what matters the most. It's the agent's reputation and typically it's the number one factor for Buyers or Sellers on choosing the agent they want to work with. I know because we've had several Buyers and Sellers hire our team strictly because of the reviews they read and just like all agents we strive to keep our rating at 5 stars.
Recently we received a lead from Zillow via their Premier team in which the caller wanted some information on a property, which was not our listing. After a friendly conversation pursued and the caller decided that the property wouldn't be a good fit for him and his family he decided he would reach back out for any further information if needed (We have the entire audio of the conversation). A few days after that conversation we received a 1 star rating, for a customer we never represented. Someone we had a 2 minute conversation with. So, like any agent we decided to call our customer representative who basically said they would not dismiss the testimonial. So, let's recap. We personally spend over $XX,000 a year in advertising with your company, have done nothing wrong but receive a scathing false review over a phone conversation that they have a record and there's nothing they will do about it. Yes. That's correct.
We've decided to pull all of our advertising out of Zillow and I plan to vehemently work for a better platform for both the consumer and the Agent. I urge any of my fellow agents and Broker/Owners to consider your part in this industry and what exactly a future is going to look like when the largest advertising company we hire only manipulates your hard work against you and has no interest in building a relationship but would rather remove agents altogether in the name of profit.
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