Realtor.com already slid down to the #3 real estate website, and was in danger of becoming completely irrelevant. Then Zillow poaches realtor.com’s president and executive vice president, and less than two weeks later, Move/realtor.com sued Zillow over trade secrets.
Realtor.com sells advertising to realtors just like Zillow and Trulia does, and eventually the agents will spend their money with the most effective websites.
N.A.R. and Realtor.com will probably both go down with the ship – for them to rebound and compete with Zillow seems highly improbable. Does Zillow plan to take out the competition, or play nice?
I think the likely outcome is that Zillow becomes the main player, and the agents who advertise at Zillow will benefit greatly. Old-school agents who keep whining about Zillow and Trulia will be left behind. Realtor.com turns into the broken-down jalopy that is sold to Trulia some day for pennies on the dollar.
Here is Zillow’s new ‘chief industry development officer’ talking about his move, and Zillow’s role in the industry – being the conduit between consumers and agents:
Smart move on Errol Samuelson’s part.
The old guard realtors have no idea what’s going on around them. Another 5 years and tech companies are going to control the real estate market.
We’ve always wondered what it would take to clean out the realtor population and just be left with a few top-notch agents.
This is it.
It already costs me $500 per month for a sliver of advertising. As Zillow gets bigger and bigger, it will be irresistible for them to raise the advertising fees, leaving old-school agents behind.
Where does Redfin sit in all of this? I would say they have the nicest user interface compared to the others.
Also i think the smart agents will be the ones that realize looking at a home online is not what its all about, its helping to guide the buyer and offer inside information about potential properties — things that you cannot get from a website. As someone who is looking for his first home, I cannot stand the agents who send me a poor MLS-like email forwards daily without any other thoughts or insight. When I get those emails I sit back and think, “i could’ve looked online myself at one of these websites which has a much friendlier interface”.
The agents who have stood out are the ones that feedback and say “well that road will be connected to a major highway/road soon” etc etc or information that one cannot get otherwise. Those are the agents who will win and survive.
Redfin?
I don’t think they have made a profit yet, though once they go public it probably won’t matter.
They have 42 agents on their San Diego roster, but only 1.4% market share in 2014 – and SD is probably one of their better markets?
I don’t know how they – or any company – with sizable overhead and low volume will make it.
I agree – the agents who add value as consultants who charge an hourly fee should have plenty of business. Who knows, maybe commission-pay could go away altogether?
As a buyer, how much would you be willing to pay a consultant on an hourly rate (and reimbursed back to you if a commission was paid by seller to consultant)? Attorneys get $250 to $1500 per hour.
When I started looking for a home back in 2010, online was the first place I looked. Realtor.com wasn’t even in my brain cells. My search initially began with Zillow. Then with Jim’s kind advice, expanded to an out-of-state real estate site (which covered three states).
To answer JtR’s question, I’d pay a minimum of $150-200/hour to a consultant. They would have to really know their stuff–not anything I could research on my own–but invaluable information that I couldn’t find anywhere else. One who has enough integrity (like Jim) who would really put my interests first, and for example, tell me why I should NOT buy that house that I emotionally fell in love in the first 30 seconds because of factors he/she knows about the neighborhood that I don’t have a clue about. Add to that, a negotiator who really fought for me…
Of the four agents I’ve used in (both buying & selling) I only would hire the first one and last one again if I ever bought or sold in the future…
The internet has eliminated the informational asymmetry that realtors previously used to their advantage, but as far as meaningful change at the transactional level, not so much.
Speaking of companies that have never turned a profit, Jim… How about Zillow? Trulia? The fact is that lead generation from these websites are a far cry from lead generation from an agent’s sphere of influence.