Jay Thompson is a former brokerage owner who spent six years working for Zillow Group. He retired in August 2018 but can’t seem to leave the real estate industry behind. His weekly Inman column publishes every Wednesday.
Early Wednesday morning, I was checking the weather and tide reports while preparing to head out for some fishing. No doubt the redfish were already trembling in fear.
An alert from Facebook Messenger popped up. A friend long before they started working at Zillow said, “Morning friend! I’m sure you’re out fishing and winning at retirement, but wanted to say hi and give you a heads up about some news coming out of Zillow this morning.”
There was a link to an Inman piece, “Zillow to hire agents as employees for iBuyer transactions.”
My immediate thought? “Well this is going to be a shit show of epic proportions.” A second fleeting thought was, “Wonder if anyone is going to launch a personal attack?” Nah, who would care what I said literally years ago. And so much has changed since I left the hallowed halls of Zillow Group.
Silly me. As I was reading the piece, another Messenger alert surfaced. This was from a Facebook “friend” whose name I didn’t recognize. In the years I worked for Zillow, I practiced “open networking.” If you were in the real estate industry and requested a connection, I accepted it. Part of my job was to reach out to folks in the industry, to be a part of this amazing community of professionals. That garnered a lot of “friends.”
Pausing my reading, I entered into this conversation:
Random person: “How can you work for them?”
Me: “Who, Zillow? I retired over two years ago.”
Random person: “Liar.”
Sigh. With head shake and an eye roll, it only took a few clicks to unfriend this person and delete yet another absurd conversation. Because who has time for this sort of nonsense? My wife and cardiologist would be proud I let it go before my blood pressure spiked.
I continued reading. As with any news article, I tried to read it with a critical eye. There was no question many would never get past the headline. Heck, many wouldn’t even get through the headline.
They would stop at “Zillow to hire agents” and head off to proclaim that the end of the real estate industry complex has finally arrived — all without a clue about what Zillow was really doing.
Spending over six years inside Zillow gave me some insight into the people, culture and mission of Zillow Group. A lot — and I mean a lot — has changed since I left. Sweeping changes in the leadership and C-suite, a completely new business model, the explosion of iBuying, ever-changing consumer behavior, demands and expectations. The economy. The pandemic.
Despite those changes, many of them being quite significant, there is one thing that hasn’t changed — Zillow’s laser-focused obsession on the real estate consumer experience. Multiple Zillow execs, both current and former, are on record saying “the consumer is our North Star.” That attitude has not changed.
Zillow is not becoming a broker with the intent to eliminate agents, despite all the proclamations that Zillow’s sole purpose in life is to eliminate agents or reduce them to barista-like order-takers.
The simple and undeniable fact is in the 14-plus years of their existence, the total number of agents Zillow has eliminated is zero. Zillow’s intent with becoming a broker is exactly what Errol Samuelson, Zillow Group’s chief industry development officer, has stated:
“In thinking about how to make the customer experience smoother, what we realized is, by having a Zillow employee who’s their end-to-end for the entire transaction, it made the whole transaction easier and more streamlined.”
Could that intent and direction change in the future? Of course it could. The only constant in real estate (and life) is that change happens. Never say never. Which leads to what many seem to be latching on to as they digest this news.
Zillow will never become a brokerage!
Back in the day, I belonged to over 120 real estate-related Facebook Groups. As I often lamented, that’s about 118 more than anyone should be in. Let’s be honest, most Facebook groups are cesspools of whining and misinformation.
Venture into any of those groups today, search for the word “Zillow,” and you will find this news being discussed. You’ll find repeated mentions of, “So much for we will never be a brokerage! Liars! Cheats!” People are tagging me and throwing me under the bus for things I said literally eight years ago.
What I and others at Zillow said was that Zillow had no plans or desire to broker real estate. Why in the world did we say that, and why is Zillow now becoming a brokerage?
I said it because at the time it was said, it was true. Prior to Zillow’s dive into iBuying, there was zero need to become a broker. It didn’t make any financial sense to do so. It didn’t even make common sense. To be blunt, at that time, it would have been stupid for it to become a broker. Hate on Zillow all you want, but no one can say it’s run by stupid people, then or now.
Spencer Rascoff, former CEO of Zillow famously said, “We sell ads, not houses.” I believe (but am not certain) that phrase was first stated in March of 2013. Today, over seven years later, some are calling Rascoff (and me for repeating it) liars. That’s despite the fact that it was 100 percent factual when it was said. Guess what? Things change.
Please understand — I’m not writing this piece to defend what I said during my employment that ended over two years ago. I’m not trying to defend Rascoff. He’s a big boy, and he can handle things himself. He certainly doesn’t need me to defend him. He doesn’t need defending, period.
I’m also not whining or feeling hurt because some are calling me a liar today. I’ve grown some pretty thick skin over the years, and I consider the source and move on. “Liar” is nothing. During my tenure with Zillow, I got death wishes like, “Do us all a favor, and have another heart attack. Maybe next time, the results will be different.” Try, “Maybe I should bring my Smith & Wesson to Zillow’s office and point it at someone’s head.”
Those kinds of comments, disturbing as they are, pale in comparison to things like, “I can find your pretty little daughter and take out my frustrations on her.” Call me a liar? Pfft. That’s amateur-level hatin’. About all I can say to that is — “Grow up.”
I’m writing this because a lot of people have asked for my opinion on this recent news. Yes, in the past, Zillow said it had no desire to be a brokerage. Today, they are saying something different. Tomorrow, next month, 10 years from now, there may be yet another change.
Note: For those who want to completely waste their time and prove I or some other Zillow employee said they would “never” be a brokerage, knock yourself out. I made tens of thousands of comments during my employment. I didn’t ever intend to say “never,” but it’s entirely possible that within those tens of thousands of comments, I did just that.
So, shoot me (metaphorically, please), but I’m human. You try dealing with pure evil threats to your family, and see if you don’t get a little amped up every now and then, and misspeak.
To me, bringing agents in-house to handle iBuyer transactions makes complete sense. Making them W-2 employees and not independent contractors (ICs) makes sense. As W-2s, Zillow can bar those licensed agents “from engaging in any other real estate activity outside the scope of their work at Zillow,” which is a point that seems to be completely missed by those assuming that next week they’re going to drive by a strip mall and see a “Zillow Realty” office.
It’s missed by the brokers fearing Zillow is going to poach their agents. Don’t want your agents poached by anyone? Then offer them value, culture, training, tools, leads and support.
Zillow is going to become a member of MLSs. It’s going to join the National Association of Realtors (NAR). Some are already screaming for the NAR to ban their membership, for their MLS to block their feed. If Zillow is going to broker in-house transactions, it should join the MLS and NAR.
My suggestions for those calling for bans and boycotts is simple — take a refresher class on antitrust laws because apparently you’ve forgotten everything about them. You think Zillow is unethical? Good news. In a few months, you can file a code-of-ethics complaint against them.
What no one seems to be talking about
At the conclusion of the piece that broke this news lies this nugget: “As part of the change, Zillow will also be changing its backend and switching to an IDX feed, which will allow data to flow to and from the company to each local MLS.”
This is huge, and in my opinion, of far more significance than Zillow hiring agents for in-house transactions. From day one of Zillow’s life, for over 14 years, agents have been complaining about the quality of Zillow’s listing data. Well, your complaints have been answered and ended, because now they will have exactly the same data you do. Time to find something else to gnash your teeth over.
Many agents — and even brokers — are shockingly clueless about how Zillow gets listing data. They don’t understand the hundreds of MLS data-sharing agreements that are forged, expire and are reforged. Nor do many understand the thousands of independent data feeds Zillow processes, multiple times a day and the nightmare that is managing all this. Those days will soon be over, freeing Zillow of a giant resource suck, allowing it to focus those resources on enhancing the consumer experience.
It’s that consumer experience that you should be focused on. I recently bought a house with a terrific agent. She made the buying process tolerable. Buying and selling a home is insanely stressful. It’s slow, and it makes you want to eat Xanax like M&M’s. At times, it feels like no one cares. Frankly, pretty much everything about it sucks.
Being a real estate agent is hard, too — way harder than many consumers and even some agents think. You, my friends (and those who find me evil for selling out to Zillow), are in a position to help people through an expensive, emotional and difficult process.
For the love of God, stop worrying about what Zillow does, and stop being bound by fear that some company, website or app is going to replace you. They are not. Focus on providing exceptional customer service.
You can’t compete with the technology of a Zillow or a Redfin. You don’t need to. You need to be driven to provide your clients remarkable service. Do that every time, and you’ll be too busy selling real estate to care what Zillow or anyone else is doing.
Sure, you can jump online, spend your time in some Facebook group lamenting the changes at Zillow, fretting about what’s next. Calling people liars (or worse). Or you can buckle down and get to work. Here’s a comment from someone who gets it, “While everyone was up in arms yesterday, I was ratifying a new contract for a $1m+ home for a buyer that I met via Zillow.”
Wherever you get your business from, and hopefully you have multiple prospecting streams, focusing on your clients will be far more fruitful (and fun) than worrying about what Zillow, Redfin, Compass, the government, a coronavirus, or anything or anyone else is doing. Get over it, get to work, be prosperous. Focus, focus, focus on what really matters — and that’s providing a superior customer experience.
Jay Thompson is a real estate veteran and retiree living in the Texas Coastal Bend, as well as the one spinning the wheels at Now Pondering. Follow him on Facebook, Instagram and Twitter. He holds an active Arizona broker’s license with eXp Realty. “Retired but not dead,” Jay speaks around the world on many things real estate.