“We sell ads, not houses.” Everyone in the real estate industry has heard Spencer Rascoff say this time and again. The Zillow team was adamant: “We’re just a media company.”
- When a company reaches a certain scale, it can cross red lines.
Brian Boero’s company, 1000watt, represents large and small brokerages and tech companies that could be adversely affected by Zillow Instant Offers.
Zillow’s launch of a homeselling service is a big deal.
Here’s my initial reaction.
A red line has been crossed
“We sell ads, not houses.”
Everyone in the real estate industry has heard Spencer Rascoff say this time and again.
The Zillow team was adamant: “We’re just a media company.”
Other statements from the portal giant echoed a similar sentiment, to the effect of:
Agents and brokers will always be needed.
The dotloop acquisition isn’t a play to get into the real estate transaction.
A company dependent upon broker listings and agent dollars for its very existence would be insane to insert itself into the deal.
Instant Offers appears to contradict these assurances.
However Zillow might downplay this move as a “test,” and whatever the law says about its role here, the company is sitting in the middle of the transaction in this new service.
Being, in effect, a broker.
The brokerage community — or at least those already wary of Zillow — will probably go nuts about this. And I won’t blame them.
But what they can do about it at this point is unclear. Zillow is now a massive consumer brand, has locked in relationships with MLSs accounting for about 90 percent of all active listings, and delivers real value to thousands of agents.
One might read this move as Zillow saying to brokers: “Go ahead; make my day: Pull your listings. We dare you.”
Some brokers will feel backed into a corner. Some franchisors will feel they’ve been had.
They’re going to lash out.
Helping Wall Street gobble up homes is troubling
We’re already starved for inventory. Do we really need a Zillow-sized platform serving up deals for institutional investors?
I find this doubly concerning coming from a company that plays on the emotional power of veterans’ homecomings, deceased moms, the immigrant experience and adoption to get people to use a home search app.
It will be hard to reach that level of poignancy with a TV commercial featuring a hedge fund analyst dropping his latest acquisition into a spreadsheet, but we’ll see.
Zillow has always proclaimed “The Consumer” as its North Star, and maybe that’s why this play feels so wrong to me.
I liked the story of Zillow helping people learn about real estate by giving them information that empowers their decision making. Emailing them offers from big investors breaks that narrative for me.
Because they can
When a company reaches a certain scale, it can break things and get away with it. Zillow claims over 140 million users each month. People now Google “Zillow” more often than they do “real estate.”
The company is on track to hit $1 billion in revenue this year.
You wanna know why the Zillow team is launching Instant Offers?
Because they can.
It’s been 10 years coming, but this move signals that Zillow now feels it can take aggressive liberties with the industry.
How far they can push it is unclear, but we’re going to find out soon enough.
Get ready for a wild ride.
Brian Boero is CEO of 1000watt, a brand and marketing agency focused on the real estate and mortgage industries.