July 10th, 2019 12:47 PM by Taydus Taydus, AHWD, CNE, CRS, GRI
This is a bit of a long blog, but worth the read as it affects both home buyers and sellers.
July 9th, 2019 was my last day as a Zillow Premier Agent. Over the years I have paid tens of thousands of dollars to Zillow for the privilege of saying that I was a Premier Agent, at times paying Zillow as much as $6,000 a MONTH. During this time I sat on panels at local Zillow conferences, as well as participated in their control groups that were used to gain opinions of real estate professionals regarding our local market and how the new programs that Zillow were considering, may fit it. Ah, those were the days! I was spending a lot, but my ROI was awesome! The Zillow platform was good for both their Premier Agents and their clients.
Then things began to change.
Zillow raised their prices for their Premier Agents; they based the price of the leads they provided to their Premier Agents on median price range in the zip code the agent was paying to market in, but failed to take into consideration the lack of inventory in the more desirable markets.
Zillow’s algorithm would then look at the number of impressions each zip code received and would determine if they could add more Premier Agents to that particular zip code (and in the process collect more $$$ for that area). However, they failed to recognize popular micro-markets such as the market that I live and work; Boulder, Colorado. Boulder, for example, is a popular destination for many. When people think about moving to Colorado they often draw upon a fond memory of visiting Boulder, or the surrounding area, so they start their online home search in this area. Then, after clicking through multiple online listings, the reality hits that maybe living downtown Boulder is a bit pricier than they realized. But still, with every click of their mouse, Zillow saw it as an “impression” and an opportunity to dilute an already strained market with more Premier Agents.So in short, the inventory went down, prices went up, and Zillow diluted the market with more agents, and proceeded to charge us MORE per lead based on the number of impressions the zip codes in my area were receiving. This pattern was happening all across the nation in various markets.
Oh, but it only went downhill from there.
Then, Zillow decided to offer their concierge service. This, in my opinion, was horrible for both agents and clients alike. Unless a potential client clicked on a specific agent on their Zillow screen, and contacted them directly, they would be shuffled off to Zillow’s concierge team. Most clients did not want to talk to Zillow, they wanted to connect with an agent and found this process very frustrating. From there, the Zillow concierge representative would connect them to an agent, giving priority to the agents that were paying more to receive more leads vs. actually matching the potential client with the most qualified agent. Then, assuming the Premier Agent paid to subscribe to Zillow’s concierge service, if that client was connected to an agent via Zillow, that agent would then automatically become that client’s “preferred agent” and be the only agent that would show up along the right hand side of the screen when that client returned to Zillow to look at properties (I believe this arrangement of the automatic agent preference would last for about three months before expiring). Most clients were unaware of this and they were also unaware that when they made inquiries on properties from that point forward, their inquiry would only go to that one agent that Zillow had matched them up with. Of course they had the option to “opt out” but most didn’t even realize they were opted in.
Hold on! It gets better (not!)
Many Premier Agents, such as myself, did not like the concierge service that Zillow was offering so we opted out.
However in recent months, Zillow has changed their platform once again and use of the concierge service is no longer an option for either home shoppers or agents (although the potential client does still have the option to select a Premier Agent directly from the list to the left of their screen while shopping on Zillow…but most don’t realize this).
So a potential buyer shopping for homes on Zillow finds a home that is of interest and they click to receive more information. A Zillow representative then calls them, and connects them to a Premier Agent that is paying to receive leads. Nothing is explained by the Zillow concierge representative, and often times the potential buyer thinks they are being connected to the listing agent. Often times they are already committed to working with an agent and don’t realize that they are being patched through to another buyer’s agent. There are multiple scenarios, but, the Zillow concierge representative does not ask any pertinent questions, and instead, blindly passes the call off to one of their Premier Agents that are paying to receive leads, leaving the potential home buyer confused about the process, and the agent frustrated with the lack of information.
What potential buyers DON’T know is that Premier Agents are expected to answer the phone when Zillow calls no matter what; if they are with a client, they are still expected to answer, if they are driving, they are still expected to answer. This is NOT in either the clients or the agent’s best interest; it is in Zillow’s best interest, and as a Premier Agent, if you DON’T answer, the number of leads you are given decreases (however your monthly payment does not reflect the decrease in leads). Before making the decision to leave, I questioned this practice and explained how if I were with a client, I wanted to give that client 100% of my attention and that it would be rude to take a phone call. I also argued that if I were in my car and not in front of my computer, I could be of little service to a potential home buyer who was inquiring about a property. You will be shocked (and horrified!) at what my Zillow sales rep advised me to do. I was told that I should take the call anyway, not ask if the potential buyer if they were already working with an agent, and to simply tell them that I would set up a showing for the property they were inquiring about, and then ask when they would like to see the home. I was then instructed to look the property up and check my calendar when I got back to my desk, and if I were unavailable or if the property were already under contract (which many of them are), to simply call the buyer back, and say that “we are unable to get in to see the property at (whatever time they requested), but we can see it (fill in the blank with a time that worked for me)” and if the property were under contract I was instructed to say “I’m sorry, but this property is already under contract, however I have taken the liberty to set up showings for similar properties in the area (assuming there are any available), and emailed you some information.” This to me is not right. It feels bait and switchy. It feels deceitful and misleading to the client and I refused to work in such a manner. I did not like getting a potential homebuyer’s hopes up, only to call them back later and tell them I cannot deliver, yet this is what I was advised to do by Zillow.
Keep reading! There’s more!
Keeping in line with Zillow’s new, greedier business model, they started marketing not only to individual agents such as myself; they started marketing to brokerages and large real estate teams. Again, I complained that the way these brokerages and teams showed up on the Zillow webpage was deceitful to the public. You see, a team will show up as one entity along the right hand side of a potential buyer’s screen when they are on the Zillow site. The homebuyer sees that there are an inordinate amount of reviews for this “agent” and thinks that this agent may be their best choice, so they choose them. What they don’t realize is that the number of reviews that is listed is for the ENTIRE TEAM OR BROKERAGE, so when a buyer chooses them, they are routed (often by some automated internal Round Robin program) to the next agent in line for that team or brokerage; it could be someone with years of experience, or it could be someone that just received their license the week prior…I like to call this agent roulette, and it is not good for potential home buyers and sellers!
Well, Zillow is yet again, rolling out a new platform – and this latest change is one of the major reasons I elected to leave…for me, it was the final straw.
The new platform will eliminate the monthly payments that their Premier Agents pay. Instead, they will distribute leads based on how many closings any given Premier Agent is able to close based on the leads Zillow provides.
In my personal opinion, this is not good for anyone.
For the individual agent such as myself, there is no way I can compete with the number of closing a large team or brokerage can close; no matter how good I am! I am only one person as compared to multiple agents that make up a team or brokerage. That said, regardless of the excellent service, years of experience and knowledge that I bring to the table for my clients, I will most likely be at the bottom of Zillow’s barrel when they distribute leads based on this new platform.
This, again, in my opinion, is also very bad news for potential home buyers (and sellers) for the following reasons:
At one time Zillow was great. But in this agent’s opinion, they have caved to greed and their own bottom line vs. doing what is in the best interest of their agents (i.e. the same agents that built them), and the potential clients that visit their site.
So please, feel free to shop Zillow to look at homes; it’s an easy and fun site to navigate. But when you are ready to get real about buying or selling a home, look locally, ask a trusted friend or family member who they could recommend, and choose a quality and experienced Realtor® to assist you vs. leaving your choice to chance and a nail-biting round of agent roulette.
For another FABULOUS tool to help you shop for a new home or simply stay on top of what is happening in the real estate market in your neighborhood, check out the HomeSnap app! The app is free, and it pulls DIRECTLY from your local MLS (i.e. no more outdated informaiotn). Warning: Creep Factor Alert (but it is a pretty cool tool!) you can stand in front of a house (even if it’s not for sale) and snap a photo from the app, and pull up all of the listing information if it is currently listed, and all of the public record information if it is not on the market. If you would like for me to send you the link to download this app, please text me at (303) 345-3256 and let me know that you would like the link for the HomeSnap app :)