If Zillow and Trulia join forces, could they take over the industry?
The real estate-selling industry will need to concede, either formally or informally. Informally, we have already given up.
We are not a union, and there is no real leadership among realtors. We are independent contractors spread all over the map, literally and figuratively, so trying to get us to rally for the cause will be met with indifference.
Many of us already think Zillow could be a big improvement for the business!
Let them spend the big money of advertising, and we’ll contribute our share in exchange for specialized leads – consumers drawn to our own listings, or those looking for a local expert in our target areas.
How will it evolve?
The Next Phase:
1. Realtor.com/Move Inc. makes a wimpy attempt to compete by spending half of the advertising money being spent by Zillow-Trulia to attack their inaccuracies (campaign currently underway). If you want a chuckle, here’s an example:
2. Corporate real estate companies join forces with Zillow (also underway).
3. Local MLS companies do nothing.
Zillow and Trulia will continue to dominate the headlines for the next few months, and realtor.com will be forgotten by consumers.
The local MLS systems don’t have to die – they just need to be irrelevant and/or a duplicate. Our local Sandicor MLS is faster and more accurate than the listings on Zillow, but does the consumer really NEED listings updated every 10-15 minutes? Realtors might, but not the consumers – they are on auto-notifications and will get the new listings soon enough (the frenzy is over, reducing the need for speed).
Can we all co-exist? Yes, but Zillow has shown a killer instinct, and has loads of VC money behind them. I think they will pursue all angles – and here’s the one that will divide and conquer the realtor community.
The Kill Shot:
Previous attempts by Realtor.com and Redfin to produce an agent-rating or agent-ranking site was met with vigorous opposition from realtors. Why? Because most realtors don’t want their sales history out in the open.
But the successful and powerful agents stand to benefit greatly – the same ones who can and will pay Zillow the big money for advertising.
It is a natural fit for Zillow to buddy up to the top producers, and get them to help promote their new agent-ranking site.
The cabal will be shattered.
The local associations of realtors and the MLS companies who have feasted on having realtors paying dues regardless of production will suffer – and should die off completely if 20% of the realtors are doing 80% of the business. They can’t survive an 80% reduction in dues.
When consumers see that their agent-friend down the street hasn’t sold a house in six months – they will hesitate. The Zillow advertising will encourage you to select one of their top producers instead (the ones paying for advertising).
It should clear out the realtor population within a year or two, and turn upside down the local associations, MLS companies, and the top-heavy big corporations who own real estate franchises.
Realtors won’t really need a brand – Zillow will be the brand.
With Zillow-Trulia getting all the eyeballs, and realtors have to do is be on the receiving end of those leads – and Z-T would be smart to cater to the top producers. The momentum would shift rapidly as success stories appear on Zillow ads too.
I’ve been paying around $500 per month to each of the three portals:
Realtor.com – no calls or leads.
Trulia.com – unqualified leads
Zillow.com – listings get high traffic early, and I get calls looking for an agent in the area. It’s the kind of results that realtors want, and I’m already convinced that I can reach the consumers and sell homes using Zillow only.
The future is here, but I’m not sure it will get cheaper.
Yesterday a Zillow rep called to offer me some exposure in another local zip code that was about the same as I already have. I pay $550 per month now, and the new but similar package offered was priced at $850 per month.
Zillow might keep the cost of commissions right where they are.