Why I like Zillow is that it's very user friendly. Our pathetic local MLS needs to learn from them. I'm a new agent and still think like a regular guy, a costumer. Even if data isn't super fresh and correct and I can easily navigate Zillow and Trulia, why would I waste my time with cumbersome Paragon Client Connect? If I, the buyer, need an immediate satisfaction of my home search curiosity - Zillow and Craigslist are the places to go.

Being the author of the "article", it was never intended to be a literary work of art. I don't take any offense to it being a jumbled mess either. When I write anything, or respond to anything other than a simple Yes or No question, I find it necessary to tell some type of supporting story.

Today I have somewhere to go, so can not and will not respond at length. I am concerned for the well being of our industry, the long term well being of it. I believe it is a short term strategy for some to buy leads (exposure) on Zillow. I also believe it is a terrible long term strategy, as an industry we may be funding our own demise, at least in regards to the industry as we know it.

Ironically, I do not believe my personal business will suffer as a result of whatever happens. I am not a "the sky is falling" type of guy. My business has been steadily growing since 2003. I did not become a short sale or REO agent, and my business continued to grow right through the fluctuations.

Regarding Diverse Solutions and Zillow products. I did just cancel 3 of my websites with Zillow. Diverse Solutions is a whole other animal. Diverse Solutions was my favorite IDX long before Zillow bought them. I have it integrated into numerous sites, blogs, etc. I still categorize it as one of the better IDX's out there for the type of marketing I do.

I am all for progress. I never raise an eyebrow when people copy my strategies and business models. I believe it forces me to continually improve. It is this aspect of this business I really enjoy.

Regarding Jay's comments "There's something in there about Zillow needing to continue to grow. Then there is this curious statement, "It is my opinion that they plan on limiting the number of options real estate agents have when choosing where to work."" - Zillow is a publicly traded company, and stockholders require revenue growth. In my opinion there is only so much revenue available from real estate agent advertising dollars. When that pool is tapped, they will still have a requirement to increase revenue and grow. This is why I believe entering the real estate industry in a capacity other than advertising will be a necessary requirement. Doing so may limit the number of options real estate agents are provided. <--- Seems pretty clear to me. Maybe it is more clear now in case I had not communicated it correctly.

Gotta go... Have a strawberry festival to go to :)

@David Dion thank you for commenting and backing up your points. People were frustrated at @Mark Archer because he came to the site for one post to promote an article and then would not back up any of his claims. Seemed more than a bit spammy and this site is very anti-spam.

David, I think it is quite a stretch to assume that Zillow is going to enter the real estate business just because they are a publicly traded company. The have many routes to go to expand since they are the number one real estate website in traffic numbers. There is a ton of ways to make money off that traffic without becoming a real estate brokerage. It is not easy to create a national brokerage which is what I am assuming you think they will do?

Warren buffet entered the real estate sales business, bit he did it by buying prudential and utilizing current real estate agents. I think Zillow may change the way we do things, but every industry changes and those who don't change with it get left behind. Change also creates incredible opportunities for those who take advantage of the change.

Thanks for the civil response Dave (not that you wouldn't be civil, but you've seen how conversations like this can spiral rapidly into ugliness).

I completely get where you're coming from with Diverse Solutions. I beta tested the product in the Phoenix market and was their first user, long before I started working at Zillow. I still use it and it still generates a lot of contacts -- it is a great IDX solution. If I'm being completely honest though, your use of it does seem a bit hypocritical given repeated statements you've made about how spending money with Zillow is funding our success, and helping ensure real estate's demise.

You're a smart guy Dave, and a savvy business person. I'm sure you can see how when you suggest you will consider offering offer lead gen/conversion training to any agent that stops advertising with Zillow, while at the same time writing us a check for another one of our products, this might come across to some as an apparent conflict in logic.

But hey, you need to do what you need to do for your site visitors and your business. Those should be priorities.

Many agents feel the same way about spending money on Zillow advertising as you do about spending money on our IDX solution -- it works, and works very well for them. I guess that's where I struggle with all you've written about Zillow lately. It's OK for you to spend money on our IDX product, but for those agents that buy advertising, it's feeding the beast and ending real estate as we know it. I simply don't get that, at all.

Yes, Zillow is a publicly traded company, and yes, we need to please shareholders (and customers too). This is not a revelation to anyone.

You're also correct when you say there is only so much agent advertising dollars being spent. The amount is about $6 billion annually, of which we have about 1% of the market share. So there is still PLENTY of room to grow there.

Agent advertising isn't the only way Zillow generates revenue (though it is the primary way). We also generate revenue through display ads, and our Mortgage Marketplace. We've just barely begun to monetize rentals. None of this is secret or being hidden, it's all in public SEC documents.

I still don't grasp your thought process that we will limit the number of options real estate agents have when choosing where to work. I guess I'm just dense on that aspect and we'll have to just agree to disagree on that matter. Entering into real estate brokerage is the only way that thought remotely makes sense to me, and I can assure you there are zero plans or discussions to do so. There is absolutely no need to do that from a financial or business perspective. Why we would do an about face and completely alter our business model and revenue stream -- one that is growing rapidly and is largely untapped -- is beyond me.

Will Zillow continue to make improvements, introduce new products, features and enhancements and consider new revenue streams? Of course we will. This also shouldn't be a surprise to anyone -- it's how any good business is run.

Thanks again for the reply Dave, and hope you enjoyed the strawberry festival! Dip a few in chocolate and send them my way...

if you want to be mad at someone; focus on realtor.com. They have the least visibility for the listing agent and the most for paid advertising and they supposed to be representing us realtors.

I am not concerned with Zillow replacing real estate agents. Their data is seldom correct. I recently pulled up my family home. The estimate was off by more than 75k, due to incorrect data (wrong number of beds/baths). It was ridiculous! However, I do find their trends helpful to give me a quick snapshot of an area.

When the day comes that the average homeowner can successfully negotiate and manage their own transactions, then I will be worried. Frankly, emotions often run too high for the typical homeowner to represent themselves effectively.

Interesting article...

I will be listing my own home for sale this June. The fact is that third party RE sites provides me with the ability to "opt out" of brokerage fees 6-8%, something I have always believed to be outrageously high. Realtors take pics, set an "open house" date, list your house then sit back and wait. Why the hell should I pay 6% - 8% commissions for doing that? No way. Instead I'll use postlets which distributes my listing to many RE sites including Zillow and handle the visits by appointment only and negotiations myself, my RE attorney handles the paperwork. I have lots of experience listing in this manner for our own rental properties so I'll give this a try. Paying a buyer's agent 3% is far more palatable to me than the traditional alternative.

I have advertised rentals for free on Zillow. I use it as a consumer and I find it helpful.

I think David Dion's article 'Zillow Advertising – Funding the Demise of an Industry ???' he was questioning whether by buying advertising on Zillow, agents were helping to contribute to the demise of real estate agents, or at least impacting their profitability. Another way to think about the issue might be that if EVERY agent pays for Zillow ads, then any agent NOT paying for Zillow ads is at a disadvantage. I think a reasonable person can see why an agent would resent feeling like they were 'obliged' to pay this advertising (in return for leads), and can see why a reasonable person (agent) might wave a flag and say, 'Hey guys! If you keep doing this, it will stop being a choice and start being another cost out of your pocket ever time!"

There are lots of models for how people make money on the internet. @Joshua D. makes money by having a whole lot of us contribute content for free. People have debates, get a little heated etc. That's great, people get information, contribute information and hopefully in the end learn more. Either way, Josh's internet property grows and is more valuable to advertisers. More clicks and eyeballs. I am not a pro member and I don't push any products here. If I had a product and I had offered a bunch of information and then Josh acted like a gatekeeper and said he could offer me a bunch of leads for my business if I paid him for advertising, I would resent it. But I don't, he hasn't, and it's totally hypothetical. Calm down Beavis. That's not an exact parallel to the Zillow example, but it's close enough to demonstrate why agents might be reluctant to pay Zillow for ads.

If Josh ever wanted to monetize his work on Bigger Pockets here, wouldn't he likely sell biggerpockets to a Zillow or a Trulia? This isn't an Eagle Scout project - it wouldn't be nearly as good if it was.... Someone ought to pay the kid, he's done good work. Big community of users who post regularly and with enthusiasm. That's actually worth quite a lot.

Hey just for an oppsing view but ponder this. I see realtors as bottom feeders.....strong words yes. Just taking a bite of the deal for what..........to lock and unlock the doors? Certainly you have folks that need hand holding every step of the way but many do not yet there is the old realtor holding out his hand for a hearty commision. I sort of take offense when a ...imo...profession takes aim at a service that helps the average person for free help with a home search and education. It seems your average realtor can smell the money and if none is heading his or her way the help will slow to a crawl if any at all. Now before you get your undies in a bunch there are certainly exceptions to the rule. I for one will be glad when the average realtor is gone the way of the stock broker and the entire industry become for the most part self serve. I think we will all be better served for it and the savings can be passed on to nicer applicances ! :-)

Geez, this thread is going nowhere.

It's like trying to have a rational discussion with a religious zealot who, in desperation in unsuccessfully trying to persuade you to their thinking, screams, 'It's a fact, and it's in the bible, so look it up!'

Uh, yeah.

I've had my agent license since 1978; my broker license since 1990. Part of the role (I may remind the OP) is selling. Not just filling out forms and moving documents around. It may actually require the salesperson to employ some level of sales skills? Amazing.

If you are a licensee and forget that your primary role is to facilitate a sale, which includes qualifying sellers as well as buyers, you are off track. If your skills are so pathetically lacking that you cannot satisfactorily explain to a seller why the robotic algorithm that produces Zillow's "Zestimate" is not as accurate as a local expert with boots-on-the-ground knowledge and market knowledge, then you ought to go back for Sales 101 Training.

If you intend to get consensus for your argument, learn to state and support it in a cogent manner in the forum you wish to influence.

Feel the love. Then stop blaming Zillow and Trulia.

I agree that him posting the link and then not defending his view was pretty poor. The hostility didn't help. Not a user you'd want on BP.

With that said, the general feeling from agents is that Zillow/Trulia etc force you to buy leads from your own product (listings). They provide nothing in terms of content - all they are is an information aggregation website with strong SEO.

People don't realize how expensive these lame websites are for an agent. In my area zip codes range from $200-500/mo.

What is needed is some sort of Wikipedia for real estate. Mostly free, with reliable information. Zillow/Trulia are in it for the money, not as a public service.

The agent representing a property already represents the property as a Listing agent. I've always wondered why listing agents feel entitled to represent the buyer's side as well....

No one is taking away leads from you -- anyone interested in buying the property has to do so through the agent that lists it.

I just don't fully understand this argument.

As a realtor, I pay a quarterly fee for access to MLS. It seems as if you'd like a publicly accessible version of it. If realtors thought this a good idea, it shouldn't be too tough to implement.

I recommended to my broker that we sign up for Zillow premiere, and it's far from $500/mo. We pay just under $100/mo and plan to try it out for a year. One extra successful sale will make it worth it. One contact was so happy with my response, she asked for a few extra cards of mine and that alone may turn into an extra transaction or two.

Sorry, public service? What for-profit business ever claims to be a public service?

@Joshua D. I think if you are representing the seller and the seller's financial interests you have a fiduciary obligation to chase down every possible buyer for the property and seek the optimal outcome for the seller. That obligation is the very nature of acting as an 'agent' on behalf of the seller. If a potential buyer is interested in your listing and she is not represented by a buyer's agent - you still have an obligation to engage her. Aside from 'getting both sides' of the commission, you have an obligation to your client to chase the buyers.

Zillow can almost put listing agents in an untenable position if they say, "You signed a contract to sell this house and we have people who are interested in it. You have an obligation to get these leads." Why can they 'almost' put agents in that untenable position? Because it approaches extortion. At least I can imagine a reasonable agent feeling that way.

Maybe this change just means that a listing agent needs to sit down and explain to the seller how a good part of the commission he is paying goes to fund this advertising.

As far as changing the way real estate is marketed, if more traffic is driven to Zillow and Trulia and Redfin, and fewer dollars are spent by agents on glossy real estate magazines (whose ads are as much about the agents as they are about the property) then the perceived role of real estate agents is reduced. That might be a net good for consumers, but is likely to make it more difficult for the part-time or casual agents... The same thing happened to part-time or casual travel agents 10-15 years ago. That was one of the points raised by the original article.

I am not 100% sure what the right answer is, but it does bear some thinking about how incumbents in and industry (agents) ought to be engaging a big third party like Zillow. At some point, the right move is to tell Zillow to pound sand. It sounds like that's what @Bryan L. 's company decided to do. Will they still sell houses? I bet they will.

Bottom line is many(not all) real estate agents blame the internet (zillow, trulia, fb, redfin, ebay etc) for stealing their leads / clients and putting them out of business. That's a cop-out, imo. Those agents (not all) were lousy and didn't handle business properly so those clients were going to leave them anyway. This article spews retoric that there will no longer be any successful r.e. agents because of zillow... Everyone knows that's not the case. Step your game up or find another career / job. There's nothing anyone can do about evolution. You either adapt and evolve or expire.

Kudos,

Mary

At some point, "Do you list on Zillow?" , will become a standard question prospective sellers ask agents before signing a listing agreement.

The current realtor business model is predicated in controlling access to information. That cat is out of the bag. And so the business model must and will change, whether realtors like it or not.

My opinion is that the model should change from information gatekeeper toprofessional service. Show me why you are worth the money, and I will pay it. I still use travel agents from time to time, because it is much easier and only a little more expensive.

And that is the key, of course, and the biggest threat to the current realtors. The new model that is coming will not support the current commission structure. Agents have had a good run. Protection by the state for their privileged position, but with a really low barrier to entry. In my state, you aretalking about less than three weeks of training and a ttotal cost in 3 figures, to get an agent license. There was always going to be a limit to how long that level of training and investment (less than that required to be an LNA in a nursing home for $9 an hour) could result in a six-figure profession.

It's not an entitlement issue.

Let me try to think of an analogy. Imagine you had your for sale sign in the yard, and a company put their logo and phone number over your sign.

Then they CHARGED YOU for the calls to that number. Essentially leaching off of your work without adding any value. Would you find that fair?

It's kind of the same as Zillow / Trulia online. They are a great aggregator (heck, I often go check information on it rather than sign into MLS) but they just get rich at the expense of agents.

PS: Writing this coming back from a cancelled appointment... from yet another low quality Zillow lead. Apparently cancelling 10 minutes before the appointment is adequate. Thanks for the 40 minutes driving and gas wasted.

Jay T. from Zillow again. For what it's worth, listing agents can post their listings to Zillow (on both desktop and mobile as well as on partner sites), be identified as the listing agent, fixed in the top slot, with links back to their listing site -- for free.

As an Investor & an Agent I don't have a problem with zillow.

They put up all that money to gain the web presence and now they are reaping the benefits of it........That's Capitalism.

As others have said, the article was very poorly written. I had to skim through it. I could not stay focused through all the off topic filler.

This is the part that bothers me. It seems that Zillow gets all the benefits, but none of the responsibilities. Also, the part of the Real Estate Agent is to find the best house, for the best deal for their client. Yes, some people are educated enough that they can do their own shopping and contracting. But not everyone is, and they should have the help and advice of a Realtor who truly carries their client's best interests and knows the law.

"Zillow does not have to play by the same rules as real estate agents. We are bound by a Code of Ethics. Article 2 of the Code of Ethics states "REALTORS® shall avoid exaggeration, misrepresentation, or concealment of pertinent facts relating to the property or the transaction." Article 12 states "REALTORS® shall be honest and truthful in their real estate communications and shall present a true picture in their advertising, marketing, and other representations." From there, there are state rules and board rules that get even more specific regarding the standards of practice WE must meet..."

Regarding "This is the part that bothers me. It seems that Zillow gets all the benefits, but none of the responsibilities." Really? All the benefits? Do you sent them your commission check? Zillow is an information/advertising web site, not a commission stealing licensed person.