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Zillow and Trulia went and got married over the weekend.

The idea of them becoming a brokerage is another topic, and they would be swinging for the fences there – it’s probably not going to happen, at least not in the short-term.

But their marriage does set up the Big Showdown:

Consumers, Top Producers, and Transparency

                     vs.

NAR, Big RE Corporations, Low-Producing Realtors and the Status Quo

The Big Showdown has been brewing for years, and Zillow/Trulia will have to pick a lane.  They are trying to sell the marriage as a mutual benefit for all, but it’s not.  One side wins, and one side loses.

The fight centers around educating the consumer.

The Status Quo (the cabal) likes to keep consumers in the dark.  Zillow/Trulia slipped in when no one was looking and grabbed our listings, produced a better website with more information, and went on a spending spree of TV advertising over the last couple of years.  They provided better transparency of our listings then realtors were willing to provide themselves, and based on results, the consumers dig it.

But having the listings out in the open isn’t enough to dismantle the cabal.

The RE Cabal, defined: The group of entities that thrives on low-producing realtors.  The National Association of Realtors and local associations collect the same dues whether an agent sells a house or not.  The big corporate franchisors enjoy more-favorable commission splits from new, inexperienced, and lower-producing agents, and if they hire them by the thousands, they can make a good living.  The top producers demand 80% or 90% (or more) of their commissions, and even though their volume is higher, the small percentages and lack of control doesn’t sit well with the corporate bosses.

What happens now?

Zillow has already been forming partnerships with the bigger brokerages; here is an example from last month:

http://investors.zillow.com/releasedetail.cfm?ReleaseID=856350

SEATTLE, June 24, 2014 /PRNewswire/ — Zillow, Inc. (NASDAQ: Z), the leading real estate and home-related marketplace, and Douglas Elliman Real Estate, one of the largest real estate brokerages in the nation and New York City’s largest residential brokerage, today announced they have entered into a new strategic marketing partnership.

Other big corporate franchisors will likely plead with Zillow for a similar ‘strategic partnership’.

If Zillow takes their money, won’t they be indebted to the Status Quo?  The Status Quo hopes so, because it will slow down or stop Zillow from continuing to expose the transparency needed to break the cabal.

If Zillow takes the high road, and is beholden to no one, then they would be free to educate the consumer on the intimate details of buying and selling homes.  The Status Quo doesn’t want that – they prefer it to be mysterious so consumers end up with the agents on bad commission splits.  Literally, the Status Quo prefers you to be served by those who are least qualified to help you.

More transparency would include agent-ranking and demonstrations on why consumers should work with a top-producing agent.  You pay the same or similar commission rate, you deserve to get the best help available.

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