Nick Bailey, the chief customer officer at RE/MAX has a message for real estate agents and brokers who are spinning in the wake of Zillow announcing it would be acquiring ShowingTime, a real estate tour scheduling and data company, for $500 million.
“Don’t panic,” Bailey said Monday morning, during a virtual town hall session hosted on the company’s Facebook page.
“This is a technology company acquiring a technology company to create access to properties,” Bailey said. “I’m sure they will innovate, iterate and evolve it.”
Bailey previously worked for a company, Market Leader, that was acquired by Zillow in 2014, and he subsequently spent three years serving as Zillow’s vice president of broker relations, so he offers the perspectives from both sides.
Zillow’s north star, Bailey explained, is the consumer. That often puts the real estate brokerage space in conflict with Zillow, specifically when it comes to things like the Zestimate and lead generation.
In a huge industry though, there’s room for all sorts of companies and models, Bailey said.
“I think there’s space in this industry for all kinds of companies, competitors and platforms,” Bailey said. “There is space for iBuyers. There are going to be certain sellers that because of desire, ease, timing, etc., may want to use that type of platform.”
Bailey also specifically addressed some questions and “myths” that he’s heard from RE/MAX agents in the wake of Zillow’s ShowingTime acquisition.
The first myth he’s heard is that Zillow will shut current agents out from the platform. Zillow itself has committed to keeping ShowingTime as an open platform for the real estate industry.
“I believe they are acquiring a technology company to provide a valuable service to consumers and agents and they want as many parties to utilize the product as possible,” Bailey said.
The other concern he’s heard from a number of agents is that they’ll be using a platform owned by a competitor. Zillow late last year announced it would become a licensed real estate brokerage in order to have its own Zillow Offers transactions managed by its own agent employees, a move that drew the ire of many in the industry.
Bailey’s response to Zillow getting further into the real estate space is, “So what?”
“Anyone can get into our business,” Bailey said. “Getting a real estate license is easy.”
“The barriers of entry are low,” Bailey added. “The barriers of entry to getting a real estate license are low but the barriers of success to be a great real estate agent are high.”
In fact, 87 percent of newly licensed real estate agents fail, according to Bailey, who said independent contractor and employee agents have been working in tandem in the industry for years, with independent contractor agents outselling employee agents.
Zillow getting into the brokerage business also plays directly into another fear often expressed in some corners of the industry: that Zillow is looking to disintermediate agents. Individuals expressing that concern often point to Zillow co-founder and CEO Rich Barton’s previous company Expedia and how it affected the travel industry.
Buying a plane ticket is much different that buying a house, however, Bailey pointed out.
He also said that real estate agents collectively spend $13 billion in marketing annually. Zillow’s agent advertising business Premier Agent generated more than $400 million in revenue for the company in the fourth quarter of 2020.
“They have a vested interest in real estate agents being successful because they spend money with their company,” Bailey said.