It was about a month ago that N.A.R. came out publicly and said that they don’t have a position on pocket listings.
Boom – Zillow jumps at the opportunity, and now here we are:
http://www.inman.com/2014/06/11/zillow-launches-coming-soon-feature-to-site/
http://www.inman.com/2014/06/13/zillow-wants-to-co-opt-pocket-listings/
It won’t change the world in one day, but it’s the next step of many for Zillow in their quest to take over the real estate world as we know it.
Agents are complaining, but Zillow won’t back down like Redfin did. They are perfectly positioned on the outside, and don’t have to cater to agents. Heck, they are dictating to agents how the business will transpire from now on.
Last July, I asked Spencer if Zillow intends to be a national MLS – see his response at the 5:40-min mark:
What does it mean for the future?
We’re heading for single agency, and nothing is going to stop it. The one-agent model is not in the buyer’s or seller’s best interest, but Zillow doesn’t care about that – they only want eyeballs on their website. They will spin the pocket listings as a good thing, and stay just high enough above the fray that they won’t be involved in how it works on the street. It will be up to the agents to determine the ethics, and we know how that will turn out.
Will there be any consumer uprising? No, they won’t know the difference, and will believe it when Zillow declares pocket listings as a solution to paying those outrageous 6% fees.
Will agents object? Nope.
You haven’t yet, and now it’s too late.
There are 1,052,143 dues-paying members in the National Association of Realtors. How many of you have gotten involved in the industry? How many have contributed by at least creating a blog? How many have even commented on a blog?
Realtors have idly stood by and allowed realtor.com to get steamrolled by Zillow and Trulia. How much longer will it be before Zillow is offering real estate specialists to assist consumers with buying and selling? I’m guessing they will do it by the end of the year.
Agents – you have yourself to blame. You refuse to get involved, you won’t stand up and object about the shady business practices happening all around you, and you hope somebody else takes care of Zillow so you can close just enough sales to get by for another year.
Hear this: Zillow is running you out of the business.
You probably got into the business during the Live and Let Live era, but that was long ago. Now it is dog eat dog, and Zillow will be is eating realtors for lunch.
The sales volume is going to stay low, and there isn’t enough business for everyone. Before you waste $59 on another box of business cards, instead, don’t bother – just quit instead. Refer your clients to me and I’ll send you a little referral fee.
It’s inevitable – isn’t it?
Maybe Warren Buffett will buy Zillow and fold it into Berkshire Hathaway Real Estate Services. He could create the Coca Cola of real estate.
Hello again AI!
Yes, and Zillow could partner with any real estate conglomerate and it would be O-V-E-R for everyone else within 1-3 years. Why? Because they see the value in transparency, and spending big money on advertising.
They have already partnered with Yahoo, so they see the value with pooling resources.
Will a government entity step in and have a say?
This is a weak attempt, and it will go unheeded by agents until we see a perp walk:
http://www.denverpost.com/business/ci_25959207/dora-colorado-agents-dont-keep-listings-off-market
If Zillow can create a “comming soon”, or pocket/preview listings, so can traditional brokers. If it’s good for the goose, it’s good for the gander. Right?
I suppose, but the Zillow ‘co-opt’-ing of pocket listings isn’t going to change the world.
But Zillow appears to be on the path of changing the game because realtors have allowed it.
Here is how they are spinning it:
http://www.zillow.com/blog/zillows-coming-soon-153687/
It is only available to be used by their Premier agents who pay the vig.
6% fees for selling a house are probably too high these days. If Zillow or anyone else can cut this down to 1.5% to 2% I think you can say its in buyer and sellers interests.
Thanks for lobbing that softball jason h!
Nobody is paying 6%, especially on the higher end homes. But discount brokers make you think it is the norm to make themselves look appealing.
Sellers have no one to blame but themselves.
If they would take the time to investigate the differences, they would make an informed decision. Sellers should compare the services provided to the fee paid – not every agent provides the same service.
If Zillow plays this card, they will be able to drive consumers to their preferred agents. It is the same ploy as I Pay One – set the bait, and switch to the better paying commission plan once the agent gets in the house.
Seller beware.
Specifically, if sellers could get full service and open market exposure for 1.5% to 2%, then great. But they will be told that, and then get something else.
Zillow is a marketing platform. Could it be something more over time, sure with the right vision they can. Assume for a minute that Zillow can be a dominate single agency Realtor. Let’s say they are responsible for 50% of the 9000 or so transactions in the county with a commission of 2% per property. With median prices back above $400K let’s just assume $400K per transaction. So in 1 year they can generate revenue of $400K * 0.02 * 4500 = $36 million just for San Diego County. That’s not too bad when they’re current revenue is $200 million per year. The expenses will go up, but if they standardize some things about the purchasing process then they could drive some of the expenses down.
Will buyers, especially first timers have the potential to get ripped off in this type of environment. Probably but maybe that’s where the good Realtors end up. Doing buyer consultations at some per hour or per property basis.
Right on the money, literally and figuratively.
It makes you wonder how Warren Buffett and other big conglomerate companies will make a profit.
Great, eye-opening article Jim. REALTORS will need to take creative steps to stay relevant and competitive in this new environment.