Zillow and realtor.com want to get in your pocket and stay there forever. I think that is a bad idea.

Have you heard or read this before?

“Nothing to be worried about, Realtors are essential … This is a face-to-face, belly-to-belly business … These companies are just advertisers — Realtors are in control of the client. Nothing to see here, move along!”


The world has changed and these guys intend to make a lot of money riding that change. They will reward their shareholders with a big piece of your commissions.

They would prefer that agents, brokers and consumers stay asleep for now and wake up sometime after it is too late to do anything about it. They will be your friends until one day you realize they are your masters.

The change happened as mobile phones became more powerful and the price came down. We have moved from a world where people read newspaper real estate sections and drove cars to look at houses to a world where all that information is in your pocket or purse. We do not drive to places we can go to on our smartphones. We do not drive to the Amazon store.

If these companies get the attention of most of the people who want to buy or sell a home, and they have all of the (your and your clients’) listing data, and they automate processes (like lead management, document processing, others) and offer them as “value added” services to agents and brokers, they will ask that you pay handsomely for any leads they generate.

If Zillow and realtor.com own the online consumer relationship, they will direct client referrals to the brokers and agents who pay them the most. Why not? It just makes sense — these companies are in business to make money for their shareholders.

Have you heard this?

“These companies have invested hundreds of millions of dollars in advanced technology. We could never compete. They are big and smart. We are small.”


If the technology and infrastructure cost $10 million, I would be shocked.

If every licensed agent in the U.S. put up $1,000, it would have more than paid for realtor.com operator Move Inc.  The technology was not the important asset, however — it was access to MLS listing data that was valuable.

So, who owns the listing data?

Today the consumers’ listing data passes to the broker, to the real estate associations, and on to Zillow and realtor.com so they can present the listing to a large online audience. The cost for this wide exposure is buried in the commission paid when a consumer sells a home. It is free, or maybe not entirely free, but at no additional cost to the consumer, so it seems like a fair deal.

It may seem fair as long as consumers do not find out how much of the commission they pay their agent eventually goes to Zillow and realtor.com to provide this service. It could be 20 percent or 30 percent — is 50 percent too much? I guess we’ll see, but the price will go up as Zillow and realtor.com roll out more content and services and establish themselves as the only game(s) in town.

Consumers and agents are the real players here. They take the risk and do the work to get a property listed, advertised and sold.

Why share so much of the commission with Zillow or realtor.com for advertising?

Can’t agents and their clients choose where their listing data is displayed online? Don’t they ultimately control where the listing data should be advertised?

Why not keep the money in the pockets of the real players?

Why not launch a broker- and agent-owned and -controlled real estate site to compete with Zillow and realtor.com?

Why not work and invest together to control our future?

Don Stewart is founder of Agent Invitation Inc., which operates an agent matching site that lets consumers rate agents and request proposals for services.

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