The new pilot program, which launches in Florida under Premier Broker, will allow brokerages to generate leads with no upfront costs.

Zillow is testing a new referral service in Florida that could shake up how it does business, and for the first time in the company’s history, earn a piece of the real estate commission pie — a step it has avoided since the company launched 14 years ago.

The pilot program, which will operate under the umbrella of Zillow’s Premier Broker lead-generation platform, allows brokerages to receive a limited number of leads with no upfront cost. Brokerages then pay a portion of the brokerage commission once a deal is closed — which Zillow refers to as a “performance advertising expense.”

A Zillow spokesperson declined to comment on what the portion of the commission will be, but noted it could change as testing continues.

Greg Schwartz, president of media and marketplaces at Zillow Group, wrote in a blog post introducing the new program that the change comes as a response to broker feedback.

“You told us that it’s sometimes disruptive to pay for advertising in advance and you would advertise more if we could change the timing of the payments,” wrote Schwartz.

Premier Broker is launching first in Florida with two partners: NextHome and Keyes Realtors. Brokerages in the state that are interested in participating are encouraged, in the post, to contact the company.

“Helping our members work with more buyers and sellers is our primary focus,” James Dwiggins, CEO of NextHome told Inman. “Ongoing marketing costs can be expensive for most brokers and agents, so a fee for success allows every dollar earned to be a win.”

“We are always open to exploring new partnerships that benefit our agents, and with our continuing expansion of offices across the country, we are positioned to provide the coverage Zillow is looking for in piloting their new program,” Dwiggins added.

Right now, Zillow only has plans to launch the pilot in markets that are underserved by Premier Broker and Premier Agent — where there aren’t enough advertisers to meet the demand of home shoppers. The new program is not intended to displace Premier Agent or Premier Broker, the former of which is a top revenue earner for Zillow and a program that’s currently being updated. 

“We see this as a win-win for homeshoppers in these underserved markets and for Premier Broker clients,” Schwartz wrote. “Prospective buyers and sellers will receive responses from our Premier Broker clients, and broker partners will be able to take advantage of a pricing system that makes sense for their bottom line.”

The new program would put Zillow in direct competition with Opcity and the newly launched Rocket Homes, referral services powered by major companies. Opcity was recently acquired by Move Inc., a subsidiary of News Corp and the operator of realtor.com, and Rocket Homes is a sibling company of Quicken Loans.

Email Patrick Kearns

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