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Can Realtor.com Make Money? Don't Know, But Let's Get Some Facts Straight About Zillow

Today an article was posted on RealtyTimes.com entitled Can Realtor.com Make Money? by Blanche Evans

Overall, it was a great recap of the history of Move.com (formerly Homestore) and an interesting question to ponder.  Ms. Evans does a good job laying out the facts, as only she can. 

However, there were one quote in the article that I specifically wanted to address, as I found it to be quite infuriating.  It was quote by Steve Cook, former Vice President of Public Affairs of the National Association of Realtors and today working with Alan Dalton on a top-secret project at Move. 

Steve says, "Zillow is private, so you don't how well they are doing. Their plan was to disintermediate the Realtor. Now their plan seems to be to build listings and traffic and become an advertising portal, and now they're getting into the mortgage business. Our model is different from theirs. We sell enhancement and marketing tools to Realtors, not advertising."

Let examine the pieces of this statement. 

Zillow is private, so you don't how well they are doing - True.  And this is a benefit of being a private company. 

Their plan was to disintermediate the Realtor. - It NEVER was the plan.  And it NEVER will be the plan.  Buying real estate is not like buying an airplane ticket.  It is not something that can become a commodity, easily bought and sold by computers online. 

Now their plan seems to be to build listings and traffic and become an advertising portal-  Selling advertising was always the plan.  We are a media company.  We have always intended to have listings on the site, however the way we have gone about has shifted over the past 12 months, based on Realtor and Broker feedback.  When we initially launched the ability upload listings for free on Zillow, it was a manual one-by-one process.  Of course Brokers that have a large number of listings said this was an unacceptable way for them to use Zillow as a marketing platform.  So in response to this we built a bulk upload tool, which is being launched next week.  Prominent brokerages such as ERA Real Estate, Remax Allegiance and United Country are a few of the first Brokerage listings you will see online. 

and now they're getting into the mortgage business-  This is the only statement we have ever released about our intent to work with Mortgage Professionals.  While I can't divulge a lot information about a soon-to-be-released opportunity for mortgage professionals, I can say that it will be consistent with our goals as a media company.

Our model is different from theirs. We sell enhancement and marketing tools to Realtors - Yes, your model is different than ours.  We GIVE AWAY enhancements and marketing tools to Realtors. 

not advertising...  - Ummmmm.. I wonder what he calls those large rectangles at the top and sides of the pages that read "LaSalle Bank" and "Sheraton"?  Come on Steve, those look like ads to me.  And I have seen ads Realtor ads on the site as well. 

What is infuriating about this statement is that various leaders at Zillow have said time and time again that it is in no way our intention to disintermediate the Realtor.  Steve knows this and yet he chooses to irresponsibly relay this inaccurate information to the Realtor community.  A community that used he to represent as a leader at NAR.  To perpetuate these inaccuracies about a tool for Realtors to use to make more money and sell and list more real estate is of poor character in my humble opinion. 

 

 

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Comment balloon 27 commentsSara Bonert • November 07 2007 10:17PM

Comments

WOW!  Your recent reader widget in the sidebar looks like the Who's Who of Real Estate Blogging on this post!  Marlow, Tim, Joel...quite a crowd you've gathered.
Posted by ARDELL DellaLoggia (Better Properties Seattle ) over 12 years ago

Sara, We truly enjoyed your presentations in Grand Rapids today.  I think I'll simply watch the discussion on this one...very interesting. :)

Posted by Lola Audu, Audu Real Estate~Grand Rapids, MI ~Welcome Home! (Lola Audu~Audu Real Estate~Grand Rapids, MI Real Estate) over 12 years ago

Sara, I intend to read all your posts because I want to know what Zillow is up to. I figure you're a good source of that information. I won't be looking to Steve Cook to explain it. I'll do that for myself.

Bill Roberts

Posted by Bill Roberts, "Baby Boomer" Retirement Planner (Brooks and Dunphy Real Estate) over 12 years ago
Very interesting reading...  I totally agree with your take on the "We sell enhancement and marketing tools to Realtors not advertising" statement.  Realtor.com sells advertising - plain and simple!
Posted by Irina Netchaev, Pasadena CA Real Estate (Pasadena Views Real Estate Team, Inc.) over 12 years ago

Very interesting but I think it goes without saying its been the goal of so many thousands of companies to cheapen the role of the real estate agent and some of your tools - zestimate kinda does this since a lot of homeowners are relying on that tool for their home value than actual MLS data.  Its great that you guys are giving away your services for free.  That being said, it was a way to get around dealing with all of the politics of the different MLS's around the U.S.

But as along as there are REALTORS, there will be a subculture that will attempt to get in the way of the client and the agent for money.  As a long as agents resign themselves to there being no other way to get business, they'll keep feeding the interloper beast. 

That being said, I think that he did lump you guys in with Homegain, House Values, Just Listed, Service Magic, Lending Tree...the list goes on and I haven't seen that side of your product yet.  Is it fair? No.  But you guys and others like Trulia are breaking the rules has they have been until now. 

And in case you're wondering - I do post my listings on Zillow and I've got about the same results for free as I did with Realtor.com that I was paying thousands for.  I figure you get what you pay for. 

Posted by Jonathan Osman, Charlotte House Hunter Group (Jonathan and Associates, Inc) over 12 years ago

LOL!  For someone so mad you put it out there in a calm and funny manner.  Realtor.com DOES sell advertising, big duh!

Can't wait to see your bulk upload tool! 

Posted by Renée Donohue~Home Photography, Western Michigan Real Estate Photographer (Savvy Home Pix) over 12 years ago
The only way realtor.com can make money to to increase their take on selling leads to companies. I got one several wweks ago. The guy wrote realtor.com that he was interested in the home. They forwarded the lead to Prudential. Since it was my listing I was sent the lead. The buyer bought the house.2/3 of the selling commision goes to Prudential. These leads do not come for free. The buyer was rel nice and wanted to sell my listing. If he did not buy the listing I may not have worked with him for 1/3 of a side. I pay a big monthly fee so it makes it hard to work with a client like that if you are busy.
Posted by Eric Bouler, Listening to your Needs ( Gardner Realtors, Licensed in La.) over 12 years ago
Great service.  It kind of reminds me of the fight napster had w/ some music artists.  Some appreciated the service because of the exposure and others hated the service because they felt like they were cheated out of money.  Even with Zillow's free service clients will need a realtor to consult them on what they can do to increase exposure to their house and get top dollar.  Lot of this information is just a general idea of what is happening in the market and does not take into consideration upgrades or any current conditions of the house.  Zillow is another portal for us to use to increase exposure to our listings and attract buyers to us also.  Should they make money? Absolutely that's what free enterprise is all about.  We as Realtors should not be scared of new portals and new technology because after all competition will only make us better if we continue to adapt.  In the end the consumer is better educated and that's a good thing.
Posted by Mario Villagran, MBA, Realtor (U.S. Spaces) over 12 years ago

I'm no defender of Realtor.com but lets give credit where credit is due.  They have never stood in between the buyer and the agent.  In the case of Eric Bouler, his company Prudential signed a mass agreement with realtor.com to showcase all their listings.  So when a buyer wants to inquire on Eric's listing, Prudential is making sure they get an additional cut - not realtor.com.  Its sad when agents don't even know who's the one's with hands in their wallets. 

I'm all for a better educated consumer and free enterprise.  What I am against, as all agents should be, is any company getting in between the agent and the buyer for a fee, just like what is happening to Eric. So as long as those companies find a way make their money without inserting themselves in my transaction, fine with me.

Posted by Jonathan Osman, Charlotte House Hunter Group (Jonathan and Associates, Inc) over 12 years ago

Sorry Jonathan.  I can't give any credit to They-That-Shall-Not-Be-Named (OK, can you tell I can't stand Realtor.com already?)  They most certainly stand between the buyer and the agent on each and every one of their listings that is not enhanced (enhanced should be read as "pay extra money for.")  

A listing on Realtor.com that is not enhanced will have the Brokerage's office number only.  If a buyer is interested in the home (an unlikely scenario since one picture and no property description does not excite anyone but I'm willing to give them the benefit of the doubt for argument's sake) they can only call the brokerage office.  Who will get that call?  It's anyone's guess.  Mine is whoever's on floor duty.  If no one's on floor duty, will the brokerage "sell" the lead to the listing agent in the form of a further cut of the commission as in the case of Eric Bouler and Prudential?  Perhaps.  

In essence we have to pay to have Realtor.com not stand between us and the buyer.  And it's not cheap.

oh, hi Sara! =)

Posted by Maggie Dokic | Miami, FL | 888.883.8509 X101, GREEN, CDPE, SFR, Pinecrest | Palmetto Bay | (eXp Realty LLC) over 12 years ago

Wow! Timing is everything, isn't it? I just had a meeting with my agents today where I announced that we would be placing all our listings on Zillow.com in addition to all our other advertising and listing sites. Mind you, I made this a requirment, not an option! I own a small real estate company in Springfield, MO with only 5 agents, but we're growing fast. I like Realtor.com and I like Zillow as well! I have paid a healty chunk of cash to Realtor.com to enhance all of my listings. So far, my traffic has increased about 300% on the average listing. Realtor.com has the advantage right now of being the site most visited by people searching for homes online. Here's what I like about Zillow: FREE! Ahhhhh! Arguably the second in the nation for the most internet traffic looking for homes. Zillow allows you to create a free profile and participate in answering questions asked by consumers, giving the agent a free opportunity to build their reputation for FREE! Ahhhhhh! Again, you have to love the sound of that word "free," especially in this business where our advertising bills are through the roof! My hat's off to Zillow! I wish them the very best of success because all my listings are also on Zillow! Sure wish that bulk upload tool was released this week! I'll be spending most of the the day uploading more than 50 of my company's listings tomorrow!

Winter Associates, REALTORS

Posted by Loren Winter (Winter Brokers, LLC) over 12 years ago
Maggie, Really?  You do realize that the listings that you take aren't yours but belong to your brokerage.  If you don't like your own office's policy, then fight to change it or leave for a better company.  All realtor.com is doing is putting the actual owner of the listing on their site.  We believe in that while the listings are technically the office's, they belong to the agent and work hard to make sure they get all the leads coming their way without a referral fee. 
Posted by Jonathan Osman, Charlotte House Hunter Group (Jonathan and Associates, Inc) over 12 years ago

Bill-  Thanks, I appreciate that. 

Irina- Which is fine.  Why lie about it, is what I don't understand.

Jonathon- Thanks for all the comments. We are going to be taking a close look at the consumer experience over the next few months and try to figure out how we can adjust the site to make it even easier for them to search listings faster and get in touch with the listing agent easier.  Thanks for posting, and hang in there, we are working to get the leads coming for you!

Maggie- Hi back! :)

Loren- This is great to hear!  Each month the traffic numbers are different and each source reports different number, but we usually fall between the second and fourth most trafficked consumer real estate website.  Best to you.

Posted by Sara Bonert, Real Estate Internet Marketing (Zillow) over 12 years ago
I said it once and I will say it again.  Zillow is out to put us out of business.
Posted by Denise Allen, Realtor@ Chesapeake, Hampton Roads (Resh Realty Group) over 12 years ago
Denise- And I can't say it enough that we are not.  Nor do I think we could if we wanted to.  Even though we are not, there I said it again.  :)
Posted by Sara Bonert, Real Estate Internet Marketing (Zillow) over 12 years ago

Michael- Thanks for the comment... (I think?).  I would agree that R.com's reputation is very fragile right now, esp. among the industry.  They need a big step up to the plate, soon.  Who knows, maybe they will release something amazing at NAR next week and do it? 

You are right about SE mkting.  Interestingly, 85% of Zillow's traffic comes from people directly typing our URL or typing the work Zillow into a search engine.  The rest comes from my Active Rain blog. 

OK, that last sentense wasn't true. 

Posted by Sara Bonert, Real Estate Internet Marketing (Zillow) over 12 years ago

Anyone a big fan of Conaan O'Brien? I love the "In the Year 2000" skits...

So my tribute:

"In the year 2000...."

All professionals in finance and real estate will have been outlawed for making any profit. People will make uninformed decisions in both areas and the United States will fall to a third world country of poverty.

 

So, how far off would I be?

Not blaming Zillow mind you. But with the internet and every wannabe millionare techie trying to jump in anywhere they can, soon many professions may be extinct. Travel agents will be the first to go, followed by Real estate agents and mortgage brokers. Eventually doctors will be replaced by the masses of web related medical experts that can now diagnose themselves!

I am all for the information age, but sometimes I wonder at what cost we as a nation are selling ourselves out for?

Posted by Charlotte Home Loans Your Charlotte Mortgage Lender over 12 years ago

Nice thought provoking post.  Thanks for keeping us straight.

Ron

Posted by Ronald Stead, Your HomeTown Real Estate Professional (Valley HomeSteads) over 12 years ago

Sara,

It's good that you came in and offered your side of the story. Now everyone who reads these posts can draw their own conclusions. I'm looking forward to seeing what your new program for mortgage pros will be like.

Posted by Esko Kiuru over 12 years ago

Michael- The 'I think' part was referrring to your first sentense, not the meat of your comment.  :)

Ed-  Not familar with Conan, sorry can't stay up that late.  I don't think you can lump travel agents and real estate agents in the same pool. 

Posted by Sara Bonert, Real Estate Internet Marketing (Zillow) over 12 years ago
Realtor.com is in the business of selling advertising at a premium regardless of what they call it.
Posted by Gary L. Waters Broker Associate, Bucci Realty, Fifteen Years Experience in Brevard County (Bucci Realty, Inc.) over 12 years ago
Sara:  Our model is different from theirs. We sell enhancement and marketing tools to Realtors - Yes, your model is different than ours.  We GIVE AWAY enhancements and marketing tools to Realtors.  Yes, to enhance one's listing... this is what really chaps me.    The price is exorbitant and I just signed up again for a year.  DUH!  
Posted by Jan Wood (None) over 12 years ago

Sarah:  You're the first person I've had contact with who works for a site like Zillow!  I'm subscribing to your blog to see what I can learn.  Thanks for posting.

Mike in Tucson

Posted by Mike Jones, Mike Jones NMLS 223495 (SUNSTREET MORTGAGE, LLC (BK-0907366, NMLS 145171) ) over 12 years ago
Sara:

I have very mixed feelings about Zillow. Let's just say that I am skeptically optimistic of you guys.  I understand that some at Zillow say that explaining why you guys own actual brokerages is sort of complicated...I'm sure I could figure it all out if it were explained.  Complicated or not....

However, I LOVE THIS POST!  Those boys over at Move talk out of both sides of their mouth and it gets on my nerves. 

I actually have a good report to give about Zillow on something.  No, I am not being sarcastic either.  I plan to write it later.  I give credit where credit is due. 

I really enjoyed this.  Realtor.com  PPPPPPHHHHHHTTTTT!  (lots of mumbling....)
Posted by Jessica Horton Jessica Horton Realty, Jessica Horton: I'm not #1... You Are! (Jessica Horton - Jessica Horton & Associates) over 12 years ago

Sara,

Please don't take the Realtor.com bozos seriously.  The only smart move they almost made was to purchase ActiveRain.  The fact that NAR continues to fritter its goodwill away with these folks is almost criminal, but the Realtor.com follies have certainly paved the way for Zillow and others to enter the game. 

Posted by Stefan Scholl, Northern Michigan Real Estate (Buyer's Broker of Northern Michigan, LLC) over 12 years ago
Sara, just shows that zillow is doing something right and is seen as a threat, and the difference in pricing to advertise is probably one of the reasons. Thanks for allowing a new realtor a cost effective way (ez ads) to get my name out to my target zipcodes.
Posted by Brian Hoots (Real Living Speckman Realty, Inc. ) over 12 years ago

 

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