Zillow’s expansion plans: compete with brokers?
Real estate media company, Zillow has recently made several big moves, some are being called game changers as they add value to their offering with the goal of better serving real estate practitioners and consumers. Not everyone sees it that way, however, including VHT Chairman, Brian Balduf, who is no stranger to controversy, recently taking on black hat SEO tactics of real estate media sites.
Balduf sees Zillow’s expansion plans as anti-broker and in a statement to be released later today, Balduf outlines why. The statement is featured in full below.
“If it walks and talks like a brokerage, it might be Zillow,” by Brian Balduf, VHT Chairman:
Zillow’s new Agent Hub tool
When Zillow rolled out a new CRM tool for real estate agents on Friday, it hit a nerve with brokers who are already offended by big aggregators’ controversial tactics to get in between them and their customers. Now it looks like Zillow is also trying to get in between them and their agents.
Zillow describes Agent Hub as a key step in moving Zillow beyond advertising with a suite of tools and services giving agents a central hub for marketing and managing their businesses and becoming more productive.
Agent Hub is said to provide agents with analytics dashboards to monitor listing and agent profile metrics, as well as marketing and social media training and industry news updates.
All this prompted industry observers such as Geekwire to suggest that Zillow’s agent strategy is targeted at competing with Market Leader and other industry outsiders that are aggressively pursuing the billions spent annually by real estate professionals on marketing and advertising.
Brokerages are in Zillow’s crosshairs
But there’s more going on here than competition between two companies in the same space. In this battle, it’s real estate brokerages who are in the crosshairs of Zillow’s ongoing expansion plan.
Understanding why that’s the case requires understanding how the Internet has changed consumer buying habits. Once upon a time, agents were the source of clients for brokerages. But now, consumers have direct access to MLS listings and they’re spending weeks or months shopping for homes on the web without help from agents.
Today, agents have to pay Zillow and other third parties to help them find these online buyers. And these savvy third parties are investing big bucks in developing a range of CRM, lead management and other support services that are easy for agents to access and free or low-cost to use. (Zillow’s plan, the company disclosed this week, also includes opening a new California office and adding 100 employees to its sales force to promote the Agent Hub offering.)
An interesting comparison
Here’s an interesting comparison. If you look at some advertising by brokers trying to attract agents, and at what these industry outsiders like Market Leader are marketing to agents, you’ll see some interesting similarities:
The broker’s message in the above ad — about providing the “best tools, training, support and lead generation” to agents — has been borrowed by third party companies like Market Leader. Its brochure ware says it offers agents “integrated websites, contact management, a marketing center, and lead generation services that generate a steady stream of prospects plus provides the systems and training for converting those prospects into clients.”
The only difference in the services is that these third party players aren’t restricted by all the rules and regulations that a brokerage must adhere to.
Zillow undermines brokers’ value to agents
With Agent Hub, Zillow is helping to undermine brokers’ value to agents and eclipsing their role by providing services directly to agents – services that traditionally have been provided by brokers. Like Market Leader, they’re taking money out of brokers’ pockets, undermining agents’ loyalty to brokers, and basically competing for the low hanging fruit – agent marketing dollars.
No wonder agents are questioning the role of traditional brokers and demanding a larger share of commissions. If the trend continues, will agents need brokers at all?
Brokers CAN actually strengthen their relationship with agents and increase their value proposition. But they need to spend less time trying to recruit more agents and more time using their resources to get leads for the agents they have. They should be helping agents nurture buyers through the sales process so they can close more sales.
This battle is all about trying to help agents generate leads and close deals more effectively. Whoever does it the best, wins, period.
AGBeat is not affiliated with VHT and the above comments expressed do not necessarily reflect the opinions and position of AGBeat officers and employees.