In 2006 Zillow, the online real estate marketplace company, hit the world scene. Little did we know that this little website would explode over the last 15 years into the massive business venture it is now. Total assets in 2019 reached up to $6.1 billion. The founders, Rich Barton & Lloyd Frink, have been building this company from the ground up, pulling in new acquisitions and pursuing new avenues of revenue. Always adventuring into the next frontier of real-estate, and taking a patent or four along the way.

In a new move that surprised real-estate moguls around the country, Zillow Mobile was developed and they began creating mobile applications (listed below). However, I don’t think anyone expected what this would lead to in 2018.

• April 29th, 2009 – iPhone Application
• March 18th, 2010 – Android Application
• April 2nd, 2010 – iPad Application
• March 31st, 2011 – Blackberry Application
• July 13th, 2012 – Windows Phone Application
• November 27th, 2013 – Windows 8.1 Application
• November 2015 – Apple TV Application

Once these apps were in place Zillow announced some news that would rock the real-estate world, Zillow Offers. The app provides a unique position for the company to directly purchase a seller’s home from them and do all the work to sell. Completely eliminating the go between aspect of the job. In the first year of this and leading into 2020, the company took a massive hit to their revenue because of the front end of purchasing all of this property.

Zillow 2.0 is still holding strong however. The current CEO Rich Barton is not worried about the downswing. He has been molded in the world of business over the years, having learned about the benefits of “risk that is tempered” while he founded/co-founded Expedia and Glassdoor. This business guru is a force to be reckoned with.

These highly aggressive tactics don’t just stop at the purchasing arena either. Over the last 15 years the business has acquired 21 patents. The patents in recent years are starting hedge competitors into a tight spot. Listed below are some of the more recent patents that have been cleared.

1. “Automated Control of Image Acquisition Via Use of Mobile Device User Interface” – Filing Date 8/21/2020

• Techniques are described for using computing devices to perform automated operations to control acquisition of images in a defined area, including obtaining and using data from one or more hardware sensors on a mobile device that is acquiring the images, analyzing the sensor data (e.g., in a real-time manner) to determine the geometric orientation of the mobile device in three-dimensional (3D) space, and using that determined orientation to control the acquisition of further images by the mobile device. In some situations, the determined orientation information may be used in part to automatically generate and display a corresponding GUI (graphical user interface) that is overlaid on and augments displayed images of the environment surrounding the mobile device during the image acquisition process, so as to control the mobile device’s geometric orientation in 3D space.

2. “Estimating the value of property in a manner sensitive to nearby value-affecting geographic features” – Filing Date 7/7/2014

• A facility for determining an estimated value of a home is described. The facility applies a first valuation model that is insensitive to value-affecting geographic features near the home to obtain a first valuation. The facility applies a second valuation model that is sensitive to value-affecting geographic features near the home to obtain a second valuation. The facility combines the first and second valuations to obtain an estimated value of the home.

3. “Automatically determining a current value for a real estate property, such as a home, that is tailored to input from a human user, such as its owner Utility Patent Grant (B2)” – Filing Date 9/4/2015

• A facility procuring information about a distinguished property from a user knowledgeable about the distinguished property that is usable to refine an automatic valuation of the distinguished property is described. The facility displays information about the distinguished property used in the automatic valuation of the distinguished property. The facility obtains user input from of the user adjusting at least one aspect of information about the distinguished property used in the automatic valuation of the distinguished property. On a later the day, facility displays to the user a refined valuation of the distinguished property that is based on the adjustment of the obtained user input.

4. Providing Simulated Lighting Information for 3D Building Models – Filed Date 4/6/2020

• Techniques are described for using computing devices to perform automated operations related to, with respect to a computer model of a house or other building’s interior, generating and displaying simulated lighting information in the model based on sunlight or other external light that is estimated to enter the building and be visible in particular rooms of the interior under specified conditions, such as using ambient occlusion and light transport matrix calculations. The computer model may be a 3D (three-dimensional) or 2.5D representation that is generated after the house is built and that shows physical components of the actual house’s interior (e.g., walls), and may be displayed to a user of a client computing device in a displayed GUI (graphical user interface) via which the user specifies conditions for which the simulated lighting display is generated.

But what do these patents do to the market? They are cornering their position as THE online real estate company. The stranglehold on any competitors is going to be hard to fight. The numerous patents typically tend to revolve around automated or multi-faceted searching and pricing on people homes. One of the newest ones actually takes images and translates into pricing.

This patent trolling technique is definitely something to take into account for other companies. This way, businesses hold their top place is to sue people into the ground with scrupulous patent lawsuits based on patent law. They throw red tape and paper on top of new competitors to drown them in fees before they can actually become competitive. Personally, I find it disgusting but from what I’ve learned, that’s capitalism at its finest. Beat them down with paper so you can stay on top.

Real Estate Exchange, Inc. (REX) has today filed an federal anti-trust lawsuit against Zillow and the National Association of Realtors (NAR).

REX accuses NAR of “non-negotiable” compensation structures baked into the MLS, an assertion that has been proven otherwise in the past.

They go on to accuse Zillow of making changes recently to their site that makes “non-MLS listings accessible only via a recessed, obscured, and deceptive tab,” leading to REX’s listings (on Zillow) losing traffic, “severely impacting REX’s reputation, its ability to execute its innovative and disruptive business model, and driving consumers away from REX and back into the MLS regime, ensuring higher commissions that benefit NAR’s members” which they say ultimately disadvantages consumers.

REX claims that Zillow (and other real estate aggregators) have helped them “to maneuver around the NAR/MLS cartel’s high commission structures” by aiding them “to reach a large audience of potentially interested buyers.”

But then Zillow went and became an ibuyer, shifting their focus from search to owning inventory, eventually joining NAR in 2020.

REX accuses Zillow of hiding non-MLS listings like theirs through their redesign. All of their homes are listed by a licensed real estate agent, but they are not NAR members and proclaim they never will be.

The crux of REX’s argument is that as a newly minted member of NAR, Zillow must follow rules set by NAR (which is done by members in committees, not the executives), and so they have joined forces to conceal non-MLS listings on Zillow’s site, thus entering into an anticompetitive posture together.

“Zillow began like so many other platforms: it served a great value to American consumers. Unfortunately, we see Zillow as backtracking on their original mission to serve consumers, instead focusing on their own profits,” said REX CEO Jack Ryan in a press release today.

In the last week of February, REX presented this case to 35 states attorneys general, leading up to their federal filing (their presentation can be found here).

The full lawsuit can be found here.

In a statement to The American Genius, Mantill Williams, NAR VP of Communications states, “This lawsuit has no legal basis, and we intend to vigorously contest it. This is an example of a brokerage trying to take benefits of the MLS system without contributing to it. It has been long recognized that the MLS system provides considerable pro-consumer, pro-competition value. REX’s lawsuit seeks to undermine that consumer value—simply for REX’s own benefit.”

Williams continues, “The MLS system levels the playing field for small businesses and allows innovation to flourish, all to the benefit of buyers and sellers. The advanced MLS technology gives publishers access to all the same information, allowing buyers to see as many properties for sale in one place as possible, while simultaneously ensuring sellers have access to the largest pool of buyers. Because of MLSs, we’re at a point in the market where we’re seeing unprecedented benefits to consumers and competition among brokers, especially when it comes to service and commission options.”

A Zillow spokesperson tells us, “We are aware of the lawsuit and believe the claims are without merit and intend to vigorously defend ourselves against it. Zillow is committed to giving consumers the most up-to-date housing information on the most amount of listings possible on a single platform. As part of our switch to MLS Internet Data Exchange (IDX) feeds and becoming formal MLS participants earlier this year, we were required to make changes to the way some listings appear on the site in order to be compliant with MLS rules. As a result, when using one of our platforms to search for homes, buyers may see two options to view their search results – “Agent listings”, and “Other listings” – which include For Sale by Owner listings or Coming Soon listings not on the MLS or, for that matter, on most other real estate sites.”

They conclude, “As part of our efforts to empower consumers, we have been actively working to update the industry rules, including those around ‘co-mingling,’ to allow a seamless search experience so we can continue to display all types of listings on our platform.”

Zillow has a bit of a shady record. Between their excessive patent-hoarding and the aggressive nature with which they tend to squash competing services, you wouldn’t be remiss in treating them with caution—especially now that the real estate service is revamping their terms of service with some seemingly sinister changes in mind.

The actual terms of service prove for a lengthy—but recommended—read. However, WAV Group, a real estate consulting service, highlighted a few specific stipulations in the terms of service. If you’re here for the short version, it’s this: Have a lawyer look over the updated terms before agreeing to them if you’re a Zillow user. Otherwise, keep reading for a deep-dive on some of the more concerning aspects of these changes.

Data, regardless of the form in which it appears, should be considered an asset; if you aren’t worried about how Zillow (or other companies in their wake) will use the terms of service to legitimize sending away your information at a moment’s notice, you absolutely should be. To wit, WAV Group also recommends having a lawyer look over Zillow’s privacy policy which, while not on par with the terms of service, also underwent a bit of a redesign.

In a nutshell, Zillow’s updates allow them to use and distribute your data—including information associated with your listings—at their discretion. That sounds pretty standard, but Zillow makes it clear that they aren’t just using your data: They own it. What that means is you can’t repurpose or reuse that data again without specific parameters in place if you want to avoid breaking Zillow’s terms of service.

Zillow is also kind enough to alert you that they will take no responsibility for anything negative that happens as a result of your data use on their behalf, a process which can include unauthorized credit checks, the appropriation and use of your data by third-party services, and all of the downsides that accompany these actions.

So, for example, if Zillow passes along your data to a third-party service that has shaky web security, you can’t hold Zillow accountable for the hand-off regardless of negative repercussions on your end.

Now, you wouldn’t be wrong to want to delete your listing and clear out of Zillow after all of this, but you would be wrong in thinking it’s that simple. According to the new terms of service, you may delete your account, listing, and preferences; you just can’t delete any listing data from Zillow since, upon accepting those terms, your data is their data.

Finally—and, as WAV Group mentions, extremely importantly—Zillow’s new terms of service allow them to claim referral fees on your behalf without accepting any responsibility for potential harm to you, your property, your company, or—you guessed it—your data. This basically means that Zillow can act as a referring agency on your behalf without asking for your consent, which runs the risk of everything from raising your bottom line to risking your privacy.

It’s undeniable that Zillow has a motive here: Recuse themselves of responsibility for reckless and irresponsible behavior. Don’t trust the terms of service like you most likely do with other products here—make sure you have a lawyer (or at least a particularly shrewd second pair of eyes) to look over these terms before you sign any kind of deal with this real estate devil.