Have you all heard about Zillow gradual shift from monthly fixed-fee subscriptions to a commission-based model? With the new model, advertising agents don't pay up front for leads, but if they close on a Zillow lead, they have to pay 30%-35% of their take on the sale.
Zillow recently announced it would move exclusively to the commission model in two new markets: Charlotte and Durham, North Carolina. With these two addition, there are six markets across the country on the commission-only system, with the other cities being Phoenix, Atlanta, Denver and Raleigh, N.C.
I write about Zillow for an investor news site: AimGroup.com. I'm looking for real estate agents, preferably ones who subscribe to Zillow's Premier Agent program, to give feedback on this move by Zillow. Is it good or bad for agents? Is the 30% - 35% cut fair? If you're willing to discuss it with me, it can be on of off the record, your choice.
Realtor · Charlotte, NC · Member since 2017 · 357 posts · 292 votes
3y
I think 30-35% is extreme. All agents are familiar with the referral structure, but 25% is my norm. For a lead that you have to work so hard to cultivate, such as a Zillow lead, that's a lot. My team used to use Zillow as a lead source but dropped them a couple of years back. In my experience, with Zillow leads, many are not serious or do not value Realtors and simply look at them as door openers. I'd much rather focus on other sources for buyers and sellers that are more inclined to talk to an agent and respect our expertise and time.
Real Estate Agent · Kansas City · Member since 2018 · 4k+ posts · 3k+ votes
3y
I think it's better. Our team spends about 7K per month to advertise on their, we have used Zillow for 10 years or so now. We get quite a bit of leads but the conversion is only 5% percent. Doing a referral based system will not "cost" the agent monthly. Zillow can make more and the agent doesn't have to use up their marketing budget. If the house is 300K then the commission would be 9K so Zillow would net 3K ish per deal.
Realtor · Charlotte, NC · Member since 2017 · 357 posts · 292 votes
3y
I think 30-35% is extreme. All agents are familiar with the referral structure, but 25% is my norm. For a lead that you have to work so hard to cultivate, such as a Zillow lead, that's a lot. My team used to use Zillow as a lead source but dropped them a couple of years back. In my experience, with Zillow leads, many are not serious or do not value Realtors and simply look at them as door openers. I'd much rather focus on other sources for buyers and sellers that are more inclined to talk to an agent and respect our expertise and time.
Real Estate Agent · Wilmington, NC · Member since 2021 · 166 posts · 116 votes
3y
I have been on both market-based pricing and their new Flex referral based % program. The flex program is very intensive and certainly not for everyone as it is basically another full job. I like generating my own leads and having full control over future business.