If you have yet to hear the news, Zillow has decided to enter the residential brokerage world. Many of us agents are not surprised. In fact, during our office weekly sales meeting, Zillow has been a hot-button topic for years. Many of us have vowed never to work for Zillow, but I believe many may be swayed to them sooner rather than later.
If you did not already know, Zillow charges agents to appear as Premier Agents next to their own listings (See Why Zillow’s Business Model is so Valuable). Some agents pay to be listed as Premier Agents, while others argue strongly against it. Others simply use Zillow’s services but keep quiet about it for fear of angering their colleagues. I cannot blame them for that.
My Thoughts on Zillow as a Real Estate Agent
Personally, I have always liked using Zillow to look at new listings. Their map feature is far more useful than switching between Google Maps and our Multiple Listing Service (MLS). But, in recent years, I have found Zillow’s website buggy and sometimes out-of-date, which makes it a pain to use. Those issues aside, there are three far more important reasons why I will never consider applying for Zillow for a job as a real estate agent.
Why I Will Never Work for Zillow
I have many reservations about Zillow, or any tech companies’, motives. I will explain why that is later on in the article. While I still look at Zillow’s website when looking at listings outside of my local area, I would never rely on them for definite listing information.
I Disagree With Their Business Model
Above all, I disagree with the way Zillow does business. I have always been of the opinion that if I am going to try something new, it should benefit the consumer first. When Zillow first showed up on the scene, about a decade ago in my area, they were revolutionary.
Gone were the days of signing up your clients for MLS notifications. But, pretty quickly many other sites showcased listings in a user-friendly way. So, Zillow introduced Premier Agents, a system where agents can pay to appear next to listings in a certain geographic area.
I do not think the concept of a Premier Agent has any benefit to a buyer or seller. If the website shared actual market data and listed answers to questions that consumers could use to find an agent (See What Questions to ask (and not to ask) a Real Estate Agent) then I would see that as a plus. In my opinion, a pay-to-play business practice does not help consumers. As far as I can tell, all it simply does is recommend agents who spend money on advertising.
I Would be Putting Other Real Estate Agents out of Business
Another issue with Zillow is that if I were to use their services, I would doing a disservice to my fellow real estate agents. For example, if I were to pay to be a Premier Agent, I would be taking clients that otherwise would have called the listing agent. That’s not so nice, in my book.
However, if I were to work for Zillow’s new brokerage office, I would literally be expediting the shift to finding clients via the internet. As we shift towards a technology-reliant industry, coincidentally us agents put more power into the hands of non-agent technology companies.
A few years back, Redfin onto came to the scene and quickly started picking up buyers through their practical website. Zillow will continue that trend, making more agents salaried employees rather than 1099 independent contractors. While theoretically this a good thing (health care and other benefits), much of the upside is lost, as I will explain below.
I Would Be Putting Myself Out of Business
Let’s face it: Those who are driven and passion can still make money in real estate. It’s not unheard of for successful agents to make upwards of a million dollars a year. As companies like Zillow, Redfin and others come onto the scene, that simply is not possible. No technology company in their right mind would like to see a real estate agent making big money without taking a big cut for themselves.
In turn, agents working for Redfin get a base salary and a small bonus on each sale. The rest of the money goes to Redfin, and I presume back to their investors. Instead of all real estate being local, most of the money goes back to the bank accounts of rich folk back in San Francisco.
Overtime, it is not unrealistic to think that more and more competitors of Zillow, Redfin and others will come join the field. As each new market disruptor emerges, the job of a real estate agent gets less and less lucrative. This has happened in just about every industry, such as attorneys, insurance agents, taxi drivers etc. Neither white-collar or blue-collar jobs appear to be safe.
Final Thoughts – Why I Will Never Work for Zillow
I always support reform and innovation in the real estate industry. As many of us insiders know, the industry is archaic. We know that in many instances conventional brokerages offer far less to their employees than they bring into their firms. However, many of us hope true innovation comes from within the industry, with tools that will help agents and consumers, not hedge funds and speculators.
I have long believed that making an agent hustle between many deals at one time is in no one’s best interest. You cannot turn a real estate transaction into an assembly line, with one person doing each step, like Redfin attempts to do. Mistakes get made, and consumers lose out.
Agent satisfaction and perseverance is extremely important in any deal. If an agent is overworked, they will eventually reach capitulation. As a consumer, you never want an overworked, uninterested agent representing you. We can improve the process without looking to San Francisco companies for innovation that benefits their pockets, and hurts everyone else’s. For that reason alone, I will never work at the modern-day Zillow. I hope they re-focus on innovation and practicality for consumers, and not profit.