A flurry of activity ripples through the real estate related media every time Zillow does something – even though, in my humble opinion those things are insanely obvious and predictable when you look at their long term strategies.
Zillow is an advertising portal hell bent on being in front of the consumer’s eyes 24/7. They are headline grabbers and media manipulators of the first water – and I say that with some admiration because they are so darn good at it. Everything that Zillow does is about getting the consumer to visit them – a sensible and practical goal since that traffic is what they want to capture, package and sell to the industry.
Zillow’s famous AVM, the Zestimate has, from its very first displayed value, been nothing more than bait for consumer’s eyes. Consumer’s don’t even seem to care if the information is accurate, since they are most often looking at out of idle curiosity – what is my dream house worth, or my dad’s house, or my sister’s house, or my neighbor’s house. Though agents talk about their conversations with consumers. I am not aware of anyone who was so confident in the value the received from a Zestimate that they used that unsupported value to price their home for the market (unless perhaps, that number was so egregiously high that they just put it on the market and got it ignored..) More often the Zestimate is just another item that the agent needs to educate the consumer past.
Then Zillow’s economist appeared on the scene pontificating about the state of the real estate market. A publisher doesn’t have a business need for an economist as part of their publishing organization. But when their company spokesperson has that title, they get help fill the demand created by our multiple 24 hour news outlets, because that job title adds a certain weight to whatever they say. As they become recognized as an expert on the market they report on, their credibility is extended to their employer, who now is more than a mere publisher of properties on the internet.
When Zillow started posting Pre-Foreclosure” information, they again, pandered to the consumer’s baser side exploiting the schadenfreude (happiness at the misfortune of others) experienced by readers, and yet not really impacting real estate sales since many of the properties published never get to sale. People like grazing the postings and I can only imagine that this tactic increased their traffic.
And now we have “Coming Soon” …another play for consumer eyes. Everyone wants to be an insider, and everyone wants to know something someone else doesn’t – which is the attraction for the curious consumer. Now they’re an “insider” – but will this impact the way the real estate industry does business? Will there be a rush to post property on Zillow that an agent does not post to their MLS?
It seems to me that publishing a “coming soon” listing on Zillow, while denying cooperation on that listing to the other members of my MLS would be a great way to let the other members of my MLS know that I want them to let me sell their listings, but I don’t really want them selling mine. At least not the “good” ones. And that just might develop into a problem long term. Wouldn’t you think that this sort of activity on the part of an agent or company might make it tough to get an offer closed when the shoe is on the other foot. So let’s think that through.
“Coming soon” as a sales tactic is, and always has been, the offspring of an inventory tight market – one where the agent controlling the inventory has the advantage in negotiations. Since the majority of transactions in the market place require the cooperation of two firms- (after all , the MLS was born of necessity, not because anyone wanted to share income) at some time, the person representing the seller, or one of their buyer agents, will probably want to show or sell one of the properties listed by another firm. And that’s when the time will come to pay the piper – though sadly the consumer represented by the “coming soon” broker in that transaction may be the person who pays that fee. If the listings marketed as “coming soon” on Zillow are used by agents to deny cooperation to other brokers in the early days of their listings. I think that the agents are being short sighted and damaging themselves and their clients.
“Back in the day” real estate agents were taught a two things that seem to have been forgotten, but bear strongly on this topic. The first? Cooperation is a privilege, not a right. The second? “What comes around goes around”. If you and I are colleagues and competitors in our market, at some time, you will have the buyer, not the seller, and you will need my cooperation if your buyer wants to purchase my listing.
So fi this isn’t really the wave of the future, or a significant change in the way real estate is sold, but rather a temporary bump in the marketplace, why is Zillow doing this? After all, they’ve demonstrated time and again that they are smart guys. Just look at it from Zillow’s perspective. It doesn’t matter whether information is accurate or significant as long as the consumer is willing to go to Zillow to look for that information.
Consumers view Zillow as a free source of information, but in today’s economy we have learned that “If you are not paying for it, you’re not the customer; you’re the product being sold” or in the words of Matt Damon‘s character in the movie “” “If you can’t spot the sucker in the first half hour at the table, then you ARE the sucker“. As long as the consumer visits a portal and leaves contact data, the portal has the product they need to sell to the industry. Spencer Rascoff has already said ““We think that agents will view online impression-based advertising in the same way they have traditionally viewed lead referral economics, which is to say that they’re willing to pay up to 40 percent of their commission to the channel that provides them with a customer.” And that my friends should remind us that this type of move on the part of such a media savvy company is more “advertising business as usual” than it is some indicator of the future of real estate sales and marketing.
So we know that Zillow wants more “eye candy” for consumers, and is not limited by almost anything in their drive to obtain new and different eye candy.
And we know that coming soon, can be either a legitimate (and small) segment of the market, or another way for an agent’s cupidity to assert itself.
And we know that to have access to the inventory of others when we need it, we want to provide similar access to our own, or face potential difficulties when our clients indicate a need that leads us to cooperate with another broker – a need driving somewhere around 90% of the transactions in the MLs today.
And we know that after all the furor dies out, the greatest part of the market will remain undisturbed, fueled by people working through the inventory of the MLS.
OK, now that we’ve gotten that out of the way let’s go list and sell some real estate –
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