The Zillow SNL skit

Zillow isn’t all ‘Power to the people’

Zillow’s ‘power to the people’ philosophy made the listings that brokerages wanted to keep private accessible to the public online. Better photography is helpful to buyers, thus becoming more important to homeowners so as to stand out among competing property and get the best price. A thorough presentation of homes condensed the buyer journey from awareness to consideration and action. This acceleration led to better experiences and an overall boom in productivity in real estate for Realtors, despite all their bitching about Zillow, and old school agents annoyed they have to spend a few bucks on aerial photography to showcase a home’s unique two acre lot. God forbid they do their job.

Realtors spend $100-$200+ for the buyer’s info. Only a small percentage actually close, so buyer agents rely on an inflated commission that comes from the sellers pocket.
There is no E-ZPass in real estate.

Middle-men are imposed, they’re not wanted.

Zillow proved that consumers would much rather take ownership of their home search. Consumers used to walk into a brokerage off of Main Street, sit down across from a smiley, ingratiating Realtor and flip through a binder of low-resolution listings. Per the early headlines, it was popular to consider Zillow as some great big threat to the Realtor’s existence, not at all understanding that Zillow’s existence, nearly 70% of their revenues, would be comprised of their Premier Agent relationships:

“Please stop calling me!”

How Realtors will go extinct

Realtors exist by virtue of their middle-man imposition, enabling them to help themselves to transactions between homebuyers and home sellers who are otherwise totally apathetic and disinterested toward them. Buyers just want to see the house, and sellers just want to get it sold. If you can guarantee this outcome, nobody other than other Realtors would care if they all went away. What buyers and sellers would do is limited by what they can do. There is no consumer facing MLS, so we need to call up a Realtor and pay them $42,000 to take pictures of our home and upload it on their MLS so it gets syndicated out to Zillow, Trulia, Redfin, etc. Sure, homeowners can hire a flat fee broker to save some money on the listing side, but they know they still have to offer a buyer agent a standard 2.5% commission otherwise they wont show their home. The solutions to these problems aren’t complicated, they just don’t yet exist. If homeowners spoke directly with home buyers, they wouldn’t be at the mercy of this exploitive, price-fixing, antirust violation riddled arrangement.

Realtors take pictures of homes and upload them to the MLS, which blasts them out to property search portals like Zillow, Redfin, Trulia, Realtor.com, etc.
Realtors erect barriers between the buyer and seller, paid for by the seller’s equity.

“Mom, Dad, you gave your Realtor forty two thousand dollars to take pictures and blow up balloons? What were you thinking?”

“I don’t know, that’s just the way it was.”

Realtor fees haven’t come down since their inception in the 1940s, despite the efficiencies of the internet, software, networks, email, etc. The entire brokerage industry is an anachronism. We have enabled two-sided marketplaces to transact on a platform in virtually every other industry; hospitality, transportation, stocks, ecommerce, but not real estate. Zillow wouldn’t even dream of changing their “Contact Agent” button to a “Contact the Homeowner” button. If buyer agents lose, they lose. If homeowners weren’t required to pay their buyer’s agent’s fee, Zillow would lose, as would all the traditional brokerages. However, Class action lawsuits that aim to provide homeowners with injunctive relief, and require the buyer pay for their agent, not the seller, would deliver a blow to the traditional brokerage industry that would bankrupt most, as no buyer is going to agree to finance their agent’s 2.5% commission.

Its only a matter of time until states begin legislating this into existence.

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I used to add miracle grow to data-analytics firms, now Im a proptech founder bringing offline consumer experiences online.

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John Fulton

John Fulton

I used to add miracle grow to data-analytics firms, now Im a proptech founder bringing offline consumer experiences online.

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