From online showings to all-digital signings and closings, the digital transaction has fully come into its own. All month, Inman examines the companies and technologies driving this new world of digital transaction.
Last week, an influential real estate executive called me, lamenting that Realtors were “whining” about Zillow buying ShowingTime.
He showed a level of disdain toward his own real estate agents.
No doubt agents can be a raucous bunch with wildly divergent opinions. Consider: Some stormed the U.S. Capitol last month, and others marched in Black Lives Matter protests last summer.
The independent contractor business model frees broker-owners from carrying an expensive payroll, but it also gives agents the freedom to do as they wish and express how they feel. Many do, which often annoys the people at the top.
This, in part, gave rise to Zillow and its marketplace dominance. When it came to the digitization of real estate, executives often failed to grasp the worries and future needs of the working agent. And they hesitated in taking bold steps to act on their behalf.
Yes, some agents had to be led into the future, but good ones were already there, waiting for their broker-owners to deliver the tech goods. When they didn’t, others stepped in and filled the void.
Zillow harnessed the power of the internet and delivered tangible value to agents while the legacy industry stood by and let it unfold. Now, Zillow has become the industry’s octopus, its tentacles reaching everywhere.
Consider the record.
How did broker-owners give up their valuable role of providing leads to agents? Many failed to make the necessary technology investments, and consequently, their value diminished and the fortunes of tech companies rose.
Why hasn’t a large real estate franchise invested in a consumer brand and built its own compelling consumer search engine? For 20 years, they’ve trusted in NAR’s enterprise, realtor.com, while many cut short-term side deals with Zillow.
Why hasn’t the industry ever admitted that the process of buying and selling a home is too complicated and opaque, for consumers? Instead of making it demonstrably easier for their customers, they played it safe.
Why did industry leaders look the other way when many of their MLS organizations got wined and dined and received payments to sell their data to Zillow?
Why didn’t MLS execs create local portals like the Houston Association of Realtors to participate in the consumerization of real estate?
Why did industry leaders remain silent when agents began to complain loudly that Zillow was exercising too much clout with their customers? They knew what was at stake, but they chose not to confront these competitive realities.
Any discussion about disruption often focuses on the disrupter, when in fact the disrupted lay the groundwork for transformative change. Zillow has a monster presence in the marketplace, but others let it run freely in the wild.
Many franchises and broker-owners did not not deliver on the essential services required in the digital age. So it’s not surprising that some agent dependencies have shifted from broker-owners to Zillow. It has the consumer brand and the leads as well as the software for prospecting, transaction management and now showings. The rest of the digital steps will soon follow.
Zillow exploited the industry’s vulnerabilities and used them to build its business. It became a broker, by default.
No one is evil in this story. Instead, it is a tale of winners and losers. Who is winning has become more clear.
For the losers, the results are their own doing and the day of reckoning is coming.
Is the game over? No, but the industry must act on a new digital mandate and invest in that future. There’s no better time than now.