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Op/Ed

Are Realtors the real loser in the sword fight between Zillow Group and Move, Inc.?

The last year has been one of dramatic and rapid change in the real estate tech sector, but Realtors are vulnerable, and we’re worried.

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Corporate warfare demands headlines in every industry, but in the real estate tech sector, a storm has been brewing for years, which in the last year has come to a head. Zillow Group and Move, Inc. (which is owned by News Corp. and operates ListHub, Realtor.com, TopProducer, and other brands) have been competing for a decade now, and the race has appeared to be an aggressive yet polite boxing match. Last year, the gloves came off, and now, they’ve drawn swords and appear to want blood.

Note: We’ll let you decide which company plays which role in the image above.

So how then, does any of this make Realtors the victims of this sword fight? Let’s get everyone up to speed, and then we’ll discuss.

1. Zillow poaches top talent, Move/NAR sues

It all started last year when the gloves came off – Move’s Chief Strategy Officer (who was also Realtor.com’s President), Errol Samuelson jumped ship and joined Zillow on the same day he phoned in his resignation without notice. He left under questionable circumstances, which has led to a lengthy legal battle (wherein Move and NAR have sued Zillow and Samuelson over allegations of breach of contract, breach of fiduciary duty, and misappropriation of trade secrets), with the most recent motion being for contempt, which a judge granted to Move/NAR after the mysterious “Samuelson Memo” surfaced.

Salt was added to the wound when Move awarded Samuelson’s job to Move veteran, Curt Beardsley, who days after Samuelson left, also defected to Zillow. This too led to a lawsuit, with allegations including breach of contract, violation of corporations code, illegal dumping of stocks, and Move has sought restitution. These charges are extremely serious, but demanded slightly less attention than the ongoing lawsuit against Samuelson.

2. Two major media brands emerge

Last fall, the News Corp. acquisition of Move, Inc. was given the green light by the feds, and this month, Zillow finalized their acquisition of Trulia.

What used to be a three horse race became a two horse race, but the entire track changed as Move became News Corp. and Zillow/Trulia became Zillow Group. What does News Corp. have in common with Zillow Group? They’re both media companies.

Anyone still wondering whether Z/T/R intend to become national brokers can now rest easy, as they have both made it so abundantly clear that they’re media companies, period.

3. ListHub and syndication heats up

In January, Zillow announced that they would cut ties with ListHub, then this month, after Zillow and Trulia officially got married, ListHub (remember, they’re owned by News Corp./Move, Inc.) shut off the pipe that feeds listings to Trulia. Yesterday, a California judge granted Zillow Group a restraining order that forces ListHub to continue syndicating at least until their next court date on March 12th. Zillow Group CEO, Spencer Rascoff continues to assert that ListHub sends subpar data to make Move competitors appear to have inaccurate data.

Sources tell us that Zillow Group should have been prepared for the relationship with Trulia to end, given that Zillow already announced their breakup with ListHub, and some indicate that this fight reveals a vulnerability in Zillow’s data quality, otherwise they would have simply supplemented Trulia with their own listing data instead of ListHub’s. One broker told us that she feels this is Move being petty.

Move disavows claims that inferior data is being sent to Zillow, and say they look forward to their day in court (as we’re betting Zillow is as well).

That brings us to today

The swords have been drawn, the lawyers have suited up, and we’re watching a corporate war like we’ve never seen in this sector. And it’s just now heating up. These two juggernauts are battling for the same eyeballs and same dollars, so there will be figurative casualties. I wouldn’t say anyone’s fighting dirty, but that they’re fighting, stabbing, and clawing, and they’ve got deep pockets to back up the fight. That said, because of Move’s affiliation with (thus accountability to) NAR and their dues-paying members, we’re more confident that Move’s interests are aligned with practitioners’and that’s important to note as we move forward here…

In an email to employees obtained by Realuoso, Ryan O’Hara, Move, Inc.’s new CEO said, “Competing in business typically involves trying to be better, cheaper, faster or different than your competition. How will we compete? By continuing to build the best web and mobile experiences for consumers and the best and most valuable tools for brokers and agents, and by providing the market with the most comprehensive, most accurate and most up-to-date listings in the U.S. I can also promise you we will quicken the pace of product innovation and apply more marketing muscle to our consumer and industry outreach. When we do all of this, we execute on our vision of putting real estate at the fingertips of today’s information-driven consumer and enabling real estate professionals to provide their customers with indispensable and personalized service. And that’s how we win.”

Rascoff, on the other hand, has blogged about his open mindedness as to the future of Zillow Group’s direction, and he’s been one of the ballsiest leaders in the industry, so we have no doubt that he’s rallying his teams’ enthusiasm to a fever pitch as they prepare for what we are certain is a delightful and exciting battle for Rascoff and his executive team. He’s a competitor and has never made apologies for it.

A shocking level of apathy in the industry

Some might think that we’re projecting that Realtors are the ones that lose out because of potential changes to Market Leader (many Trulia staffers were laid off from the Bellevue office where sales and support are (that’s Market Leader territory)), which could impact Keller Williams who is their biggest customer. But no, it’s none of that minutiae.

I originally set out to opine that Realtor confusion will put Move on top (some will expect that a Z/T merger means one bill, but operating separately, they’ll still pay two bills and be disillusioned), but then I hit the phones. I called dozens of Realtors across the nation, not just our readers, and the responses were astounding.

Several had no idea that Zillow had acquired Trulia, many didn’t know what ListHub was or how it related to this fight, and not one could accurately tell me any details of the three major points outlined above. Not one Realtor.

Only a select few knew that ListHub had severed ties with Trulia, meaning their listings might not appear on Trulia as of this week, and three actually said they didn’t care one way or the other, even when we discussed the importance of listing accuracy.

One told me that her most important concern is whether there are flyers at her listing because she’s so rural that most people still don’t have internet, so this battle means nothing to her (even though I asked her about the future, to which she said, “I’ll cross that bridge when I get there”).

Every industry has idiots, but for the most part, Realtors are a bootstrapping breed of ingenious ass kickers who live or die by how good they are at every single transaction. So how were so few uninformed, and for those that were, why didn’t they care? Don’t they know that almost every single transaction starts online, and that where they land dictates how they get to you!?

Here’s why Realtors are going to be the loser here

Realtors are going to lose in the Zillow Group battle with Move, Inc. because they’re busy working instead of obsessing over the minutiae of listing syndication and blossoming media company mergers and acquisitions. Realtors are a hard working, honest bunch, but let’s look at it through the lens of politics – there are a few decision makers pushing papers, a few more that approve those papers, a lot that watch news, a larger group that react negatively or positively when they learn of a policy that impacts them, and the largest group which has no idea what the hell is going on at any given time, and couldn’t identify the VP of America if paid $1M.

So here is how I see the industry:
industry involvement

  • True insiders are the handful of people that lead these companies and know every move that is going on, long before even their employees know. In this circle are the Spencer Rascoffs, the Ryan O’Haras, and Dale Stintons.
  • Informed insiders are the small circle of people that work at these companies and know what’s going on, or are talking to the true insiders on a regular basis. These are also the types that are involved (like those leading policy-making committees at a national level).
  • Well informed are those that aren’t directly affiliated with any of the aforementioned companies, but study them. This is most of our readers – you’re a decision maker at your company, so you work endless hours, but you’re good at your job because you’re obsessed with knowing as much as possible to retain your competitive advantage.
  • Somewhat informed are the normal practitioners that read real estate industry news from time to time, may watch some cable tv news, but mostly focus on their continuing education and being good at their job.
  • Uninformed is where an even larger number of practitioners lie. They are not stupid by any stretch of the imagination, but they honestly have no clue what Zillow Group is, and even when told, they don’t care, they have a call to make and you’re wasting their time.
  • Clueless is the large number of people that don’t know what ListHub does or why it matters, and like the uninformed, they’re not stupid, they’re just not interested, and that’s their prerogative.

Because of these levels outlined above, very few people in the sea of practitioners even know what is going on. It is my firm belief that this is exactly why Realtors will lose out – not enough are involved to affect change, fewer care to be involved, and even fewer will ever know that there was even a battle. This means that decisions are being made that they have no awareness of (therefore, no say in), and it’s not like American politics where we all urge each other to vote to be heard – involvement is the only vote here, no matter how busy you or your practice are.

Our industry’s track record of diminished involvement means media companies have increasing power, and hell, they’ve earned it. But until the day comes where I can spend a week on the phone calling Realtors, and they all know what the issues are or why they matter, they’re vulnerable. Realtors are vulnerable, and as an advocate for Realtors, that makes me increasingly nervous.

#ZillowMoveBattle

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.

Op/Ed

6 lessons from failed transactions that will save your next deal

(BUSINESS) Failed transactions can be a tremendous source of learning for any level of real estate professional.

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The late Maya Angelou was known to have said, “I’ve learned that you can tell a lot about a person by the way (s)he handles these three things: a rainy day, lost luggage, and tangled Christmas tree lights.”

And while I believe that this humorous quote is quite true, you can also learn a lot about a real estate professional when the going gets tough. That is, when a real estate transaction begins to face challenges or when there are signs that the transaction itself is going to fall through, you can learn a lot about an agent by his or her behavior in the face of adversity.

Having assisted agents in closing thousands of transactions, here are the six largest lessons that I’ve learned about real estate from these failed transactions.

  1. Never oversell your services. Don’t promise the moon if you cannot even deliver the stars. That is, don’t offer up marketing programs that you cannot deliver. Don’t promise your client that the property will be on page one of Google if it will not. And, never promise that you can save a client from foreclosure or negotiate a sale for top dollar. It’s not generally a good idea to guarantee that you can sell a property—especially at a price that does not align with current market value. When you cannot deliver on your promises, clients get angry. This anger will result in bad reviews, no referrals, and possibly even a cancellation of contract.
  2. Don’t be pushy. If a client is on the fence about making an offer or listing the property for sale, never be too pushy. It is generally a good idea to document pros and cons in order to help a client make a more informed decision. However, if you push clients to list their home as a short sale when they are still considering a loan modification or when you push buyers to make an offer on a property they don’t really like, your behavior will come back to bite you in the butt. Help clients make informed decisions in their own best interest—not yours.
  3. Always read the preliminary title report. If you are listing a property for sale or if you represent a buyer on a purchase, one of the first things that you must do is review the title report. If there are a significant number of unpaid liens, the seller will need to pay those off at closing. Often, this can be difficult or there may not be enough funds to close and cover the seller’s obligations. So, don’t put your buyers into a situation like this and don’t take a listing if you are not going to be able to get it closed.
  4. Always check proof of funds. If the buyer is an investor buying on behalf of a corporation, limited liability company, trust, or partnership, make sure that the buyer has the authority to sign on behalf of the entity prior to moving forward. Obtain proof of funds monthly if you have an ongoing relationship with the buyer in order to confirm that the entity has the necessary buying power.
  5. Have the lender update the pre-qualification letter monthly. Since lending guidelines are constantly in a state of flux, it’s a good idea to ask your buyer’s lender to provide you with a new pre-qualification or pre-approval letter monthly. With the fluctuation of interest rates and the risk of a buyer purchasing a big-ticket item on credit, you’ll always want to be certain that the buyer will qualify for a loan before moving forward and making an offer.
  6. Don’t waste time on anyone with irrational expectations. Perhaps you are working with an investor buyer that wants to purchase a home to flip for 50 cents on the dollar. Or… perhaps you are working with a seller that wants to sell his home for $300k over market value. It doesn’t matter how hard you try; this individual may be a waste of time. Consider how many money-making opportunities you’ve lost while spending time showing countless properties and making lowball offers. Instead, focus on lead generation and money-making activities for individuals and transactions that will actually close.

You can avoid panic mode in your next real estate transaction if you heed this advice. The greatest benefit from a failed transaction is what you actually learn and how you can apply it. You don’t want the same stinking stuff to happen to you over and over again. With that advice in mind, I wonder why it is that the Christmas lights are always tangled.

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Op/Ed

The 10 skills every successful real estate pro shares

(EDITORIAL) It isn’t slick business cards that make a real estate pro successful, it’s a constant striving for improvement. Here are the 10 skills the most successful among us share.

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“Success is not final, failure is not fatal: it is the courage to continue that counts.” -Winston Churchill

Churchill’s quote may be shared with lame inspirational imagery on Facebook in an effort to make people think the poster is an inspiration, but his words are timeless and a universal truth. People enter the real estate profession with big dreams and expectations and are often met with the brutal reality that it is a lot of grunt work.

Once in the industry, what separates the successful from the failures? There are 10 skills every successful Realtor shares, no matter their expertise:

1. Education level

Successful real estate pros continually educate themselves, and not just in the “I have 6 hours of legal updates to take before I renew” way, but through webinars, earning designations and certifications to refine expertise, continuing education, and so forth.

Resting on laurels is never an option for successful pros, because they’re constantly seeking the competitive advantage. Further, they are educated enough to educate people around them, be they consumers or fellow agents – the skill to effectively convey a message is a sure sign of being educated.

2. Negotiation skills

Those at the top of the food chain can negotiate well, and we’re not talking about haggling at a rug bazaar, we’re talking skillfully navigating the transaction from start to finish, knowing the laws and processes so well that they aren’t just worried about their bottom line, they’re taking their fiduciary relationships with clients ultra seriously.

It’s not about being cutthroat, it’s about being extremely knowledgeable and being able to get the best deal possible (and convey that to) a client, who in turn refers to them because of their wicked value proposition.

3. Communication skills

Real estate agents are famous for not calling anyone back. It’s true, let’s be real. But those at the top not only have the systems in place to handle calls when they’re unavailable or funnel leads through the most effective pipelines, they treat their clients like gold. Which means communicating at every phase of the transaction. No one at the top lands a client then just shows up at the closing table, it just doesn’t work that way.

Emails are routed properly, social media connections are groomed effectively, and systems are in place to deal with incoming communications. Further, they are able to communicate complex legal terms simply and concisely to clients, and they make the process look easy. They’re very hands on.

4. Tech-savviness

The most successful in the industry aren’t necessarily programmers, but they’ve vetted the endless systems they have working well together to get consumers from point A to point Z effortlessly. Many are left behind, duct taping together old crappy technologies, while the successful agents tend to be ahead of the curve and are thirsty to always improve (see #1). This doesn’t mean they’re Twitter experts and want to come talk to your office about the benefits of tweeting, it means their site won’t look like it was half-assedly built in 1999, they aren’t using outdated tools, they’re pushing technologists to serve them so they can better serve their clients.

5. Marketing skills

If you ask someone that is successful about their toolbox and methods, you’ll be in for an hours-long conversation. Marketing is second only to negotiation skills when it comes to a Realtor’s value proposition, so they don’t just slap up a flyer in a yard, they have endless digital analytics in place, they (and/or their team) follow up on every single opportunity not only for leads but feedback. They tweak. Then they tweak again. And again. And again. Marketing skills isn’t just knowing what a modern logo looks like, but what a good ROI is on a specific type of ad, which listings require a re-shoot, expertise on a farm area like school ratings, and so forth. It’s a science and an art that separate the successful from the others. By miles.

6. Problem solving

The most successful in the industry are creative and think well on their feet. When problems arise, they can confidently offer an immediate and effective solution, which requires experience and education (which yields refined judgment). If a sale is falling through because the buyer wants the hot tub to convey, but the seller plans to take it with them, they know when to let go of the damn hot tub and when to hold on, as well as what to offer each party to create a win-win.

This also applies to knowing when they’ve expanded too quickly or too slowly and need to add team members and navigate those waters of operating a business to scale.

7. Team building

Speaking of teams, there is more team building to a successful agent’s tale, no, it takes a village – relationships with all types of vendors they can call in a pinch, title professionals that are effective, photographers that are skilled, and so forth.

The most successful in the industry are networkers with a purpose that have refined their pitch (and they know “I help people buy and sell homes” is forgettable, but “I specialize in luxury properties on the north shore” yields more referrals), and know that their team expands far beyond their four office walls.

8. Leadership

Successful real estate pros are typically quality leaders. They know how to motivate every actor in a transaction, motivate their team, and get everyone to work toward a common goal. To be honest, these qualities are often natural when you combined the aforementioned skills.

9. Risk takers

Most people don’t think of Realtors as risk takers, but inherent to success is a refusal to settle. Even if there is a market area dominated by a successful Realtor, they know that the pipeline always has room to grow. They’re the first to try new technologies to speed up a transaction or better serve a consumer, they’re the first to add or subtract an offering to refine their methods, they’re willing to try out new agents that show promise.

They also know how to balance risk for the sake of success versus risk for the sake of taking risk. In real estate the “fail faster” mentality of Silicon Valley tech doesn’t make for a successful veteran agent or brokerage.

10. Advocacy

What most outsiders don’t know is that most successful Realtors are advocates for homeowners and homeownership, often involved at the local, state, or national level with volunteer efforts. They serve on committees, they communicate the importance of homeowners’ rights to politicians, they volunteer at places like Habitat for Humanity and are typically deeply involved in a non-superficial way in their community.

The takeaway

Real estate is a profession that anyone can enter if they can pass a basic test, but the most successful are those that know resting on laurels and refuse to stop growing, stop pushing, stop educating themselves and others, and they refuse to stop advocating. That’s what makes the industry so wonderful, and why we will always advocate for those in the trenches.

#REsuccess

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Op/Ed

Ratings companies have evolved into two camps that couldn’t be more opposite

(EDITORIAL) The ratings and reviews game has evolved considerably in recent years, and now, two clear camps have emerged… which do you think is better for consumers?

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Nearly every industry today is either participating in or being assessed by ratings and reviews. It’s what consumers want – it has become a consumer-centric fundamental.

Because time is scarce, consumers are increasingly seeking what they hope are reliable, trusted sources that collect and post both product and service experiences of real customers. The idea is that having access to the actual experience of others will lead to making better, more informed decisions and choices in selecting their next product or service provider.

In meeting this consumer interest, a pursuit of five star ratings has created a Star Wars battle line with two distinct camps:

  • Marketing Spin Camp – best foot forward, filtered results, selected feedback, and heavy bias of positive news
  • Transparent and Accurate Camp – reliable, measured, complete, unscrubbed and unmanipulated information from real past customers

So one camp chooses to Photoshop the picture while the other offers untouched results; one camp chooses pleasant fiction and the other chooses the reality of non-fiction; one camp elects to edit and cleanse, the other offers accountability and transparency with some blemishes; one camp seeks an immediate, short-term, gamed advantage to win customers while the other trusts that truth is the foundation of long term relationships; one camp doubts its ability to deliver great results and chooses marketing spin while the other camp believes consumers can be discerning and their service providers can deliver.

Facts sure can ruin a good story

In response to Brad Inman’s comment in an April 19th, 2016 interview, “…what I’d love to see here… (is) a higher-quality agent… better ones”, the former president of an organization promoting the Marketing Spin Camp stated, “Ratings are not the way to a higher-quality agent because ratings are a marketing tool… I don’t care what anybody says about that.”

The power of Marketing Spin is in telling a tale. Since the facts can ruin a good story, those in the Marketing Spin Camp often find it more convenient to avoid, ignore, omit, or not even bother to learn the facts. These facts have been researched and available for some time now, including in a 2008 report, before most in the Marketing Spin Camp entered the North American real estate market.

Transparency, accountability, and feedback both change and positively alter behavior in sports, business and politics. The evidence is clear, empirical, and unambiguous.

Ratings and reviews when properly designed, delivered, and data aggregated (scientific methodology with research expertise) do create the kind of accountability, transparency, and feedback that influence and alter professional behavior creating both measurably higher quality and a more satisfying customer service experience.

Spin a story, discredit the real estate industry.

The facts – Here are the measurable results that are specific to the real estate industry and related to how service quality assessment of every closed transaction can influence agent behavior, the quality of service they provide and make them better (data based upon more than 2,000,000 customer satisfaction assessment surveys):

• 54% more Very Satisfied customers with the overall service experience than the national average
• 86% fewer Dissatisfied and Very Dissatisfied customers with the overall service experience than the national average
• 400% greater likelihood of agent making a post-closing service follow up call than the National Average
• 65% greater Satisfaction with quantity and quality of communication
• 72% greater Satisfaction with attention to transaction details
• 78% greater Satisfaction with negotiating assistance
• 54% increase in sales of returning past customers
• 56% increase in referral sales from satisfied past customers

Star Wars – the battle for five star ratings is bigger than the quest to win today’s customer. Honest and accurate ratings and reviews are about TRUST and long-term customer relationships.

Adopting practices of misleading information, selected feedback, and manipulated data are a “win the battle lose the war” strategy that also sacrifices the opportunity for ongoing improvement, real service excellence and true five star results.

Presenting manipulated, selective, or cleansed customer feedback as accurate and honest is also likely a violation of the Code of Ethics.Click To Tweet

You have the power to do the right thing.

The 2015 independently commissioned D.A.N.G.E.R. Report identified agent service inconsistency and the invisible interactions between agents and consumers as the highest threat to the survival of the industry and the value of Realtor® services.

Believing that ratings are only about creating positive messages or merely a marketing tool that cannot influence professional behavior is factually incorrect and a sad surrender in the face of what can and is actually being done.

“Like them or not, reviews are now central to the consumer decision-making process. Go all in or stay out of the game. People will sniff BS a mile away if you try to peddle filtered or otherwise less-than-open reviews.” -Brian Boero, Founding Partner, 1000Watt Consulting

While we may frequently feel that events in business and life are beyond our control, each of us has the power to do the right thing, to do it well and to do it now!

This editorial was first published here in February of 2017.

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