Zillow’s expansion plans: compete with brokers?
Real estate media company, Zillow has recently made several big moves, some are being called game changers as they add value to their offering with the goal of better serving real estate practitioners and consumers. Not everyone sees it that way, however, including VHT Chairman, Brian Balduf, who is no stranger to controversy, recently taking on black hat SEO tactics of real estate media sites.
Balduf sees Zillow’s expansion plans as anti-broker and in a statement to be released later today, Balduf outlines why. The statement is featured in full below.
“If it walks and talks like a brokerage, it might be Zillow,” by Brian Balduf, VHT Chairman:
Zillow’s new Agent Hub tool
When Zillow rolled out a new CRM tool for real estate agents on Friday, it hit a nerve with brokers who are already offended by big aggregators’ controversial tactics to get in between them and their customers. Now it looks like Zillow is also trying to get in between them and their agents.
Zillow describes Agent Hub as a key step in moving Zillow beyond advertising with a suite of tools and services giving agents a central hub for marketing and managing their businesses and becoming more productive.
Agent Hub is said to provide agents with analytics dashboards to monitor listing and agent profile metrics, as well as marketing and social media training and industry news updates.
All this prompted industry observers such as Geekwire to suggest that Zillow’s agent strategy is targeted at competing with Market Leader and other industry outsiders that are aggressively pursuing the billions spent annually by real estate professionals on marketing and advertising.
Brokerages are in Zillow’s crosshairs
But there’s more going on here than competition between two companies in the same space. In this battle, it’s real estate brokerages who are in the crosshairs of Zillow’s ongoing expansion plan.
Understanding why that’s the case requires understanding how the Internet has changed consumer buying habits. Once upon a time, agents were the source of clients for brokerages. But now, consumers have direct access to MLS listings and they’re spending weeks or months shopping for homes on the web without help from agents.
Today, agents have to pay Zillow and other third parties to help them find these online buyers. And these savvy third parties are investing big bucks in developing a range of CRM, lead management and other support services that are easy for agents to access and free or low-cost to use. (Zillow’s plan, the company disclosed this week, also includes opening a new California office and adding 100 employees to its sales force to promote the Agent Hub offering.)
An interesting comparison
Here’s an interesting comparison. If you look at some advertising by brokers trying to attract agents, and at what these industry outsiders like Market Leader are marketing to agents, you’ll see some interesting similarities:
The broker’s message in the above ad — about providing the “best tools, training, support and lead generation” to agents — has been borrowed by third party companies like Market Leader. Its brochure ware says it offers agents “integrated websites, contact management, a marketing center, and lead generation services that generate a steady stream of prospects plus provides the systems and training for converting those prospects into clients.”
The only difference in the services is that these third party players aren’t restricted by all the rules and regulations that a brokerage must adhere to.
Zillow undermines brokers’ value to agents
With Agent Hub, Zillow is helping to undermine brokers’ value to agents and eclipsing their role by providing services directly to agents – services that traditionally have been provided by brokers. Like Market Leader, they’re taking money out of brokers’ pockets, undermining agents’ loyalty to brokers, and basically competing for the low hanging fruit – agent marketing dollars.
No wonder agents are questioning the role of traditional brokers and demanding a larger share of commissions. If the trend continues, will agents need brokers at all?
Brokers CAN actually strengthen their relationship with agents and increase their value proposition. But they need to spend less time trying to recruit more agents and more time using their resources to get leads for the agents they have. They should be helping agents nurture buyers through the sales process so they can close more sales.
This battle is all about trying to help agents generate leads and close deals more effectively. Whoever does it the best, wins, period.
AGBeat is not affiliated with VHT and the above comments expressed do not necessarily reflect the opinions and position of AGBeat officers and employees.
April 18, 2012 at 3:44 pm
“This battle is all about trying to help agents generate leads and close deals more effectively. Whoever does it the best, wins, period.” Absolutely spot on. The odd thing, at least for now, in this simmering competition stew, brokers are providing their ZTR competitor with gunpowder (property data) which is used to sell ads to the brokers agents, which generates money, which ZTR use to manufacture more tools (bullets) to shoo the gunpowder-providers (brokers) in the head. Awareness on all fronts is rising and will rise as the market rebounds and (hopefully) smart brokers move from a survival-mode-mindset to a kick-ass-and-take-names-mindset.
“But they need to spend less time trying to recruit more agents and more time using their resources to get leads for the agents they have.” I believe to thrive you must do both impressively. Half-assing on lead gen, developing new talent, quality control and attracting new talent will have a broker chasing and lagging instead of leading and reaping.
I don’t believe a middle ground is possible due to TRZ’s shareholder/investor demands and expectations, growth can only come from disintermidiating brokers. What I’m encouraged by is the fact that (for now anyway – wake up brokers TRZ is a Trojan Horse) brokers can (if they have the will) pull the life support plug on TRZ. In will be interesting to see how brokers react in a surging rebound market.
Thanks for sharing.
April 18, 2012 at 4:02 pm
The entire old guard needs to be pushed – if you’d told me 3 yrs ago top producer would be html5 I’d have called you insane and asked you to step away from the crack.
IMO this is more threatening to old vendors and new vendors with old tricks – read that again.
This is a snap in the face to NAR – wake up, we’re taking the reigns as the leader in the real estate industry, and Trulia just solidified my belief last week.
The fact is, Zillow is a threat to everything that was once normal in real estate, and there isn’t a damn thing wrong with that. The arrogance of the old mans club is coming to a head – mark my words.
April 19, 2012 at 4:00 pm
Benn – Definitely agree that other RE service providers like Move, etc should worry about Zillow, but how is “Zillow is a threat to everything that was once normal in real estate”? It seems to me that Zillow does two things: sells web ads from listing data, and provides web services to agents. This may bring about some industry consolidation in these markets, but I don’t see how this affects much else. This doesn’t seem that revolutionary/disruptive to me. What am I missing?
What would be very interesting – and cause quite a stir – would be if Zillow setups up brokerages ala Sawbuck — ‘brokerages’ that have access to MLS data and build an agent referral business. This would be a lot more disruptive to traditional brokerages than anything else they’ve done recently.
April 19, 2012 at 5:34 pm
Bruce, got your question, and I’m going to see if I can help paint a better illustration of what I mean than stuffing it into a comment. I don’t think Z will be sticking signs in yards, I think it’s a lot more macro than that and not speculative, but what’s actually happening in real time.
April 19, 2012 at 6:22 pm
“I think it’s a lot more macro than that and not speculative” – I have no idea what that means.
April 18, 2012 at 4:31 pm
Spot on, Benn! Things are desperately in need of a shake up. Local brokerages (and parent companies) have failed to provide meaningful lead gen systems for their agents. Zillow and Trulia are simply fulfilling the need/demands that Realtor.com has failed to provide.
April 18, 2012 at 10:50 pm
If *any* agent puts their client information in Zillow’s AgentHub, they are an absolute idiot.
I blogged about here:
April 19, 2012 at 12:40 pm
Jay T. from Zillow here!
Thanks for pointing this out Robert. The TOU you cited in your posy was never intended to include info agents and brokers upload to the CRM / Agent Hub. Zillow will not harvest anything from the contacts that agents input into the CRM, and the language of the TOU is being been updated to explicitly state this.
April 23, 2012 at 8:54 am
Thanks for the clarification Jay T. 😉
April 19, 2012 at 2:06 am
Tsk tsk. What would David Gibbons do?
April 23, 2012 at 8:55 am
He’d probably do exactly what Jay T would do. Good to see you Thomas.
April 19, 2012 at 6:10 am
Agents and brokers woke up too late.
April 19, 2012 at 3:43 pm
All this hand-wringing over Zillow is so tiring.
So Zillow is providing services to agents just like Market Leader and Move. So what? Agents aren’t forced to use any of this. If Zillow provides compelling products with good value to agents, how is this a bad thing?
And this incessant worry that Zillow will become a brokerage — ugh, enough already. If Zillow’s evil master plan is to setup brokerages, then let them. Running a profitable brokerage is hard work. If it were simply a matter of turning on a website, Redfin would have taken over the entire industry years ago. And if they do setup brokerages, do it better than everyone else and make tons of money, then good for them. Seriously – what *is* the problem?
There’s a lot of zillow/trulia/redfin/r.com haters on the REnet who would be better off focusing on how to provide more value to their buyers and sellers – and less time griping about everyone else.
April 19, 2012 at 5:37 pm
I’m not a hater, like I said, competition in the market place especially for associations and vendors is a great great thing.
April 19, 2012 at 6:16 pm
Benn – sorry, didn’t mean to infer that you were in the ‘hater camp’. If I understood the original article correctly, you reported on Mr. Balduf’s thoughts on Zillow, not your own. I think we both agree that a more competitive RE service marketplace is all good.
April 20, 2012 at 10:16 am
I’m not wringing my hands Bruce, I’m speaking up, speaking out, wagging a finger, shaking a fist.
Fortunately I’m capable of expressing my self and focusing on my business at the same time. A part of business is keeping abreast of competitive forces, listening to opposing views and formulating a positon current issues. Expressing myself in writing is helps to crystalize my beliefs.
What I’m not doing it sitting quietly in a corner, deaf, dumb and mute. If I did that I wouldn’t be “doer”, I’d be a dud. imo
April 23, 2012 at 8:59 am
Was Zillow contacted for comment on this story?
April 20, 2012 at 7:02 am
“There’s a lot of zillow/trulia/redfin/r.com haters on the REnet who would be better off focusing on how to provide more value to their buyers and sellers – and less time griping about everyone else.”
Spot on. Unfortunately, this world is full of “blamers” aka those who will bitch and moan about what everyone else is doing that is so “unfair” but refuse to actually do anything themselves to improve their business. I’ll stick to hanging with the doers of the world..
April 20, 2012 at 9:54 am
It seems there are just as many zillow/trulia/redfin/r.com apologists on the REnet who also would be better off focusing on how to provide more value to their buyers and sellers – and less time griping about everyone else.
April 20, 2012 at 10:01 am
This is what makes the internet great. It allows us to bitch and moan, even when we want bitch and moan about the bitch and moaners. We can hate on the haters, we can point how unfair and misguided the unfair and misguided are.
Thankfully because most of us who read and share on AG can walk and chew gum, we can laser focus on growing our business, be a doer and still find time to add to the conversation, even when the haters, moaners, bitchers, unfocused and undoers disagree.
April 20, 2012 at 10:03 am
PS. I think Redfin is an awesome brokerage. ZTR, not so much, they aren’t a brokerage yet.
April 20, 2012 at 10:11 am
@Robert – So we have the Hater Camp and Apologist Camp. How about the Agnostic Camp? Either way – I agree with your point.