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Zillow gets one step closer to practicing real estate

(CORPORATE) Real estate giant, Zillow, has been testing “Instant Offers,” today expanding to include themselves in the mix of buying and selling homes.

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For over a decade, real estate practitioners have worried that their feeding Zillow endless information would empower them to eventually pick up real estate licenses and become their largest competitor. In 2007 and 2008, it was massive blog fodder an an emotional issue for many as agents and brokers rallied against it.

Zillow has always said they will never practice real estate. Ever. They’ve maintained their position that they sell ads, not properties.

But today, the company is one step closer, as SEC filings reveal they will be testing the buying and selling of homes directly in two test markets, Phoenix and Las Vegas.

They’re not the brokers of any of the deals, and this is clearly a play to compete with Opendoor which is already valued at over $1 billion, but it is certainly another inch closer to confirming the fears that caused so many to figuratively flood the internet streets with torches and pitchforks.

The company announced today that they would be expanding their Zillow Instant Offers Program to Phoenix after testing in Vegas and Orlando last year, wherein sellers could solicit cash offers from investors.

In the new test markets, however, they’ll be participants, stating they will be “buying and selling homes with Premier Agent partners.”

Zillow stated that their Instant Offers Program is “an excellent source of seller leads for Premier Agents and brokerage partners,” given that the majority of sellers who requested an offer ended up using an agent from the program.

Fast forward to today, and they’re no longer the matchmakers, they’re also planning to buy and sell investment properties themselves.

In a statement the brand said, “Beginning this spring, home sellers in the Phoenix and Las Vegas real estate markets will be able to compare an agent’s comparative market analysis (CMS) to offers from Zillow or other investors.” Adding, “When Zillow buys a home, it will make necessary repairs and updates and list the home as quickly as possible. A local agent will represent Zillow in the purchase and sale of each home, enabling agents to earn commissions.”

All of this could be one step closer to competing in the real estate market as actual practitioners, or maybe Zillow is just as enchanted with Chip & Joanna Gaines’ house flipping as the rest of us.

Lani is the Chief Operating Officer at The Real Daily and sister news outlet, The American Genius, and has been named in the Inman 100 Most Influential Real Estate Leaders several times, co-authored a book, co-founded BASHH and Austin Digital Jobs, and is a seasoned business writer and editorialist with a penchant for the irreverent.

Real Estate Corporate

New Zillow strategy – telling you to take your money and shove it

(REAL ESTATE) Zillow is adding a new feature that is raising eyebrows, but could go a long way toward consumers’ trust in their new direction.

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In college I would spend hours investigating what courses I would be taking the next semester. My university provided a flow chart of the kinds of classes I needed to enroll in, but it was completely up to me which one I chose. I used two main sites that helped my make my decision. One was a site that showed me every single variation of my potential schedule and the other was a crowd sourced rating site for the professor. Since then, several rating sites have come out all in different industries, and as you already know, real estate is no exception.

As a consumer, I have a very strange relationship with Zillow. I’ve never bought a house, but I’ve used Zillow to find multiple rental homes, to dream about homes I’ll never afford because I like avocado toast and to look at the before photos of a home my friends bought.

I also have a strange consumer opposition to them after their little Zestimates drama last year, their recent foray into alleged photo poaching, and their not so blatant attempt to run the table by buying a mortgage company.

That said, Zillow’s new strategy has my interest piqued.

With the purchase of Mortgage Lenders of America, Zillow has secured their place at the adults table of the real estate world. They’re now the search engine that will help you find a house, the company that will connect you to a Realtor and the lender that can help you buy it. Zillow is taking their one-stop shopping a step further and allowing you to rate your real estate agent (beyond their existing rating system) — just like I did with my professors.

Customers will be asked for input on agents’ communication style, responsiveness, trustworthiness, and expertise (sound like HomeLight? Yeah, I know).

In an effort to be customer satisfaction driven, Zillow’s Premier Agent customers will be privy to reports based on data that Zillow will collect from other customers that will gauge agents’ performance.

Zillow believes their customers are all about customer service and I can’t say they’re wrong. I don’t know of any industry where customers don’t want quality assistance. The irony is not lost on me, though, that they’re an online company trying to measure human interaction.

Zillow’s President, Greg Schwartz, explained, “we promise you this: we’re going to give you the greatest platform to make it happen. And we’ll keep pushing to get it right so you can deliver exceptional experiences.”

Solid promise, but how is it going to work? Will it be like the website I used to rate my professors where it was an option to do so or I could just lurk in the shadows and reap the benefits of the reviews? Or is it going to be like Uber / Favor / fill-in-the-blank-phone-app-service where I am required to submit a review before I’m allowed to do literally anything else? They’ve long had agent ratings, but insiders suggest that an Uber-esque rating is really what’s in play here.

Schwartz went on to talk about agents who aren’t performing up to customer standards — again, are there hard and fast guidelines? Because I can guarantee you that as a customer, I will have different standards than Mariah Carrey.

Schwartz said, “For agents who aren’t performing up to customers standards — Zillow will no longer be interested in taking their money. The company wants to be able to tell every consumer who comes to the site that the agent they select will deliver a high-quality experience.”

Whoaaaaaa. Schwartz is really swingin’ for the fences there. If you aren’t up to Zillow’s standards, they’ll tell you to take your money and shove it. Despite a shaky opinion of the mega-company, this speaks to me.

I’m not entirely sure alienating large groups of a people you’re trying to work with is the best strategy, but Zillow seems to have the appearance of trying to do good things. We’ll see what shareholders think, how brokers will respond to a potential Uber-esque rating for their agents, and ultimately, how consumers opt to trust the data in a sea of subjective agent ratings alongside endless lawsuits against that shake confidence in the brand.

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Real Estate Corporate

Zillow closes deal on mortgage company, they’re now officially lenders

(CORPORATE) Zillow just spent money on a mortgage company so they give you some money, too. #MakeItRain

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With the changing of the leaves comes the changing of Zillow. Zillow, you know the one — that real estate website that has helped home buyers find houses for years — has decided to enter the mortgage game.

Yep, you read that right. Late Wednesday, the company completed its acquisition of Mortgage Lenders of America (MLoA). MLoA is a privately held online lender in Kansas… well, they were. They’ll still operate from their Kansas HQ and they’ll keep their VP, but Z is the captain now.

That’s one small step for home buyers and one giant leap for the real estate industry. All other aspects of consumerism has made its way to the ether, there’s no reason mortgage lending shouldn’t either.

Zillow has been in the search and listing side of real estate for over a decade now. However, they first dipped their toes into the selling side of the real estate biz when they announced their “Instant Offers” program, which allows sellers in particular markets to receive offers from investors. Shortly thereafter, in a fairly predictable move, they became an investor and purchased homes as well.

Becoming a lender was a very obvious next step for the online real estate site and has been a long time coming.

Now, with the acquisition of MLoA, they’ll have the capacity to be more than just an investor. To accompany the acquisition, there’s supposedly a rebrand for MLoA in the near future, too.

This acquisition certainly opens avenues to develop tools and partnerships.

“Getting a mortgage can be the toughest, most painstaking and time-consuming part of the home-buying process,” Greg Schwartz, president of media and marketplaces at Zillow, said in a statement. “Having our own mortgage origination service as an option for consumers will allow us to streamline the process for people who buy a Zillow-owned home.”

This is a huge move for Zillow. They went from showing home buyers homes to actually buying homes and now financing the buyers purchasing those home.

While this certainly streamlines, shortens, and simplifies the home-buying process for consumers in the Zillow Offers world, it will be interesting to see how it effects them as a company and the mortgage industry as a whole.

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Real Estate Corporate

WeWork has more office space in Manhattan than anyone

(REAL ESTATE) WeWork is now the biggest renter in Manhattan – what it says about the company, and perhaps an opportunity for *your* business.

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It’s official: WeWork now rents more office space than anyone in Manhattan—including their previous competitor, JP Morgan. With 5.3 million square feet of rented space, the coworking company clearly intends to maintain its momentum, thus lending credit to the inherent value of social work environments.

The sheer growth WeWork has seen in 2018 speaks to the notion that the coworking craze — perhaps surprisingly — isn’t slowing down.

While WeWork (and other similarly themed companies) only accounted for 3.3 percent of the new leases signed in 2017, they ate up 9.7 percent of new leases signed in the first two-thirds of 2018. Those aren’t the numbers of a trend in decline.

Despite some water cooler disdain toward WeWork’s potentially wishy-washy work culture and some of their latest publicity stunts, investors seem to like them more than ever. In fact, word on the street is that SoftBank — a prolific WeWork investor — is considering a second investment that would value WeWork at or around 40 billion dollars.

Like we said: not a sign of a declining company.

WeWork’s objective success isn’t the star of the show here, however; it’s what they’ve proven through that success which matters.

WeWork’s ethos (that human beings need interaction with other similar human beings in order to thrive in a workplace) gets further reinforced with every lease the company signs.

If small- to mid-sized companies can take away one thing from WeWork’s example, it’s this – many people need other people in order to do their best work.

There will always be exceptions to the rule—plenty of folks work alone from home and are happy to do so—but the fact that freelancers living in some of the most expensive real estate in this country are willing to pay additional cash just to be around other like-minded individuals is fairly indicative.

If nothing else, keep in mind the social atmosphere afforded by WeWork when designing your office spaces or nailing down your workplace culture expectations. And yes, they allow Realtors and brokers to lease space, too…

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