Brokerage network ZipRealty Inc. continues to see revenue from its own brokerage operations in 20 markets dwindle, even as it expands its new "Powered by Zip" referral network into additional markets.
Emeryville, Calif.-based ZipRealty today announced the addition of two brokerages in New York to its referral network — Fillmore Real Estate in Brooklyn, and Century 21 American Homes in Queens, Nassau, and Suffolk counties. The additions bring the number of brokerages participating in the "Powered by Zip" network to 12.
A ZipRealty spokeswoman said that since the Powered by Zip program’s launch last year, participating brokerages have used leads from the program to close "thousands of additional real estate transactions" involving homes valued at more than $160 million.
ZipRealty — which has closed down its own brokerage operations in 15 markets since January 2011 — posted $314,000 in net income during the three months ending June 30, the company’s first profitable quarter in nearly six years.
But revenue was down 14 percent from a year ago, to $20.3 million, as same-market transactions fell 20 percent, to 2,924. The number of agents engaged by the company was down 31 percent from a year ago, to 1,508 at the end of June.
After ZipRealty’s 1999 launch, it reported profits in several quarters from 2003 through 2006, but dipped back into the red during the housing downturn, and had run up an accumulated deficit of $118.7 million as of Dec. 31, 2011, the company said in its most recent annual report to investors.
Right-click to enlarge chart. Source: ZipRealty regulatory filings.
In most of the markets ZipRealty has closed down brokerage operations, it’s moved to a referral model, making the most of the traffic its website was generating in those markets by securing listing feeds from other brokers for display on ZipRealty.com.
Brokerages entering into referral partnerships with ZipRealty supply all of the Internet Data Exchange (IDX) listings in their market to ZipRealty.com — including properties represented by other brokers. ZipRealty provides partner brokerages with the leads generated by ZipRealty.com in their market, plus access to a proprietary customer relationship management (CRM) platform.
Market Leader Inc. is displaying IDX listings from more than 150 multiple listing services on RealEstate.com under a similar model that has been called into question by several prominent industry leaders. Critics say they’re concerned that unlike third-party portals like Zillow and Trulia that syndicate listings, brokers can’t opt out of having their listings appear on IDX websites.
The National Association of Realtors’ IDX policy states IDX sites must be marketed and branded as a brokerage site, and must be controlled by a participant — conditions that Market Leader and ZipRealty say they are complying with.
In announcing the latest Powered by Zip partners, ZipRealty said Century 21 American Homes is one of the largest residential brokerages in Long Island, with 400 agents working out of nine offices completing more than 1,200 transaction sides in 2011. Fillmore Real Estate claims to be the largest independent real estate company in Brooklyn, with more than 400 agents at 18 offices completing more than 1,300 transaction sides in 2011.
The 10 previously announced Powered by Zip partners are Better Homes and Gardens Real Estate Metro Brokers in Atlanta; Westchester, N.Y.-based Better Homes and Gardens Real Estate Rand Realty; Long Realty in Tucson; Coldwell Banker Howard Perry and Walston in Raleigh, N.C.; Coldwell Banker Hearthside in Philadelphia; Bob Parks Realty in Nashville; Coldwell Banker Vanguard in Jacksonville, Fla.; Prudential Utah in Salt Lake City; Prudential Tropical Realty in Tampa; and Illustrated Properties in Palm Beach.
The 15 markets where ZipRealty no longer has its own brokerage operations are: Fresno, Calif.; Charlotte, N.C.; Naples, Fla.; Jacksonville, Fla.; Miami; Palm Beach, Fla.; Tampa, Fla.; Hartford, Conn.; Minneapolis, Minn.; Virginia Beach, Va.; Tucson, Ariz.; Atlanta, Ga.; Raleigh-Durham, N.C.; Philadelphia, Pa.; and Salt Lake City, Utah. The company also shuttered the Westchester-Bronx portion of its New York office earlier this year.
ZipRealty continues to operate its own brokerage offices in 20 markets: Austin, Texas; Baltimore, Md.; Boston; Chicago; Dallas; Denver; Houston; Las Vegas; Long Island, N.Y.; Los Angeles; Orange County, Calif.; Orlando, Fla.; Phoenix, Ariz.; Richmond, Va.; Sacramento, Calif.; San Diego; San Francisco; Seattle; Portland, Ore.; and Washington, D.C.