Zillow and Real Estate Xenophobia
Recently, in a real estate Tech Support Forum on Facebook, someone posted their opinion of Zillow's latest TV commercial. Zillow is a powder keg for controversy in the real estate community as it is, but since the commercial didn't make a prominent reference to a real estate agent (there was a broker sign in the yard) and was themed on a returning member of the military service, the discussion was particularly passionate. These debates always seem to have 2 camps: those who hate Zillow with an incredible, almost inexplicable vitriol, and those who tell them to get over it.
Now is about the time I disclose my relationship with Zillow. I have advertised on the site since 2006, been in their Premier Agent program since 2010, and for the past 10 months I have been a member of Zillow's Agent Advisory Board. This does not mean that I have always been a zealous supporter of all that Zillow does; to the contrary, I always felt that my participation on the platform gave me license to offer, shall we say, feedback. I have been critical of some things they have done, and benefited greatly from others. Overall, the relationship has been overwhelmingly positive, and one could make the case that I am more emblematic of the good that can come of leveraging their systems than virtually any other agent in my market.
Back to the Facebook discussion: one particular agent took exception to my being a paying customer of Zillow. When I shared that my participation on the site has helped sustain my firm through the housing crash, this person stated that I was basically supporting a company that sought to put agents out of business, asked how I could sleep at night, and said that if "Zillow saved your business, you need to back to school (sic) and learn business." He also called for agents to stop doing business with them , which wouldn't be a smart thing to do on social media, as boycotting is an anathema to real estate practices.
Sadly, this person is not alone. There are three basic issues that real estate licensees have with Zillow. The Zestimate, or estimated home value they post for every property, the data accuracy issues that Zillow has in common with every other real estate syndication site (in other words, that is an industry problem more than it is a Zillow problem), and Zillow's pay model, in which they accept payment from agents in exchange for advertising (wow, what a concept). I am not going to deconstruct those issues now because I have already written on the Zestimate and the other issues aren't exclusive to one site. Suffice to say on the Zestimate, however, that both listing agents and homeowners can claim their property and make data corrections to revise the estimate. It is done with municipal assessed value in every market.
What should be addressed, however, is the abject hatred some licensees display about Zillow that not only undermines our professional body, but speaks to their inability to grasp what consumers want and how the industry is changing.
Webster's Dictionary defines xenophobia as
an unreasonable fear or hatred of foreigners or strangers or of that which is foreign or strange.
I think this definition is apt for people like my Facebook discussion counterpart who demonized Zillow and it's adapters with such passion.
The big conspiracy theory among the mouth breathing haters is that Zillow really wants to put brokers out of business via a sinister plan of disintermediation. In other words, they want to supplant brokers and be the sole conduit of real estate transactions. The evidence offered is that some Zillow executives used to work at a travel website, and the travel industry was dramatically changed by the Internet. I used to be a bartender; I guess that means I want everyone to have beer goggles. I don't know which is more absurd.
I have been to Zillow headquarters in Seattle. There is only one thing that is sinister about Zillow. Their employee snack bar. If I had one of those I would gain 30 pounds in short order.
Real estate professionals need to understand that Zillow is not the enemy. We are, to a vast extent, our own worst enemy. We shoot ourselves in the foot when we don't understand the change in consumer trends. The Internet has been mainstream for well over 15 years now. Brokers are no longer the gatekeepers of information. Our trade association's Internet policy is in large part the same since 1996. And while our ability to adapt to a new generation of consumers dies in committee, there are thousands of other lean, profit motivated capitalists out there gauging exactly what consumers want and how to best deliver that. In other words, Zillow and companies like them aren't the news. They are the messenger.
If you are an agent that pines for the "good old days" when your best source of clientele was people walking into the office off the street, you need to be on notice.
If you long for the days when a consumer wanting information on homes for sale had to go through you because of the cabal-like grip licensees had on the data, you are on notice.
If you are fearful of Internet companies because you are concerned that buying a home will be a point and click transaction like buying a book or booking a hotel room, you are on notice.
The real estate industry will never "take back their data" via a boycott of technology companies. Battle cries like that are an intellectual dunce cap because it isn't what consumers want.
Here is what the xenophobes need to understand: adapt or become irrelevant. You will not be supplanted by Zillow or any other website, you'll be overtaken by your competitors who get it. Learn what consumers want and deliver it. Understand that our value proposition to the public is not as the door to the data, but as the trusted adviser in the largest financial event in most people's lives. Failure to live up to that will only solidify the stereotype of a glorified door unlocker in the minds of too many consumers who want professional guidance, not lists of homes emailed that they already downloaded themselves. Stop demonizing what you don't understand and start learning. Zillow has made my firm money because I have learned how to use it.
Data companies and online advertising platforms like Zillow are not going away. They are the future. The sooner our trade organizations get that, the sooner they'll regain the consumers lost to the better, faster stronger platforms unencumbered by outdated rules and committee bickering. In the meantime, change with the times or go in with your cousin on that corner cafe he's been talking about.