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Zillow Instant Offers(Zillow Image)

  • Zillow’s test of its new initiative for home sellers called Instant Offers is expanding beyond its initial two markets and moving into Phoenix, the Seattle-based real estate tech company announced on Wednesday.
  • In addition to dotloop (transaction management and e-signatures), Zillow Group also owns Diverse Solutions (IDX provider), Market Leader (CRM), Postlets (listing advertising) and, of course, its search portals Zillow, Trulia, StreetEasy and HotPads.
  • Zillow now has a new program called “Premier Agent Assist” where it will provide the initial and continued follow-up for 30 days on new leads to help its Premier Agents increase their conversion rates.
  • Zillow has publicly stated that it has no intention of going into the brokerage business, but plans can change.

Disruption and innovation abound in today’s real estate technology world. With the recent announcement of Zillow Group acquiring transaction management firm dotloop, Zillow continues to be mentioned in headlines — and social media threads — as a threat to the real estate industry.

Zillow continues to dip its toe into every single aspect of the real estate transaction. In addition to dotloop (transaction management and e-signatures), Zillow Group also owns Diverse Solutions (IDX provider), Market Leader (CRM), Postlets (listing advertising) and, of course, its search portals Zillow, Trulia, StreetEasy and HotPads.

Zillow now has a new program called “Premier Agent Assist” where it will provide the initial and continued follow-up for 30 days on new leads to help its Premier Agents increase their conversion rates.

Zillow Group will not need to go out for additional funding to pivot to online real estate.  The company is valued at over $5B and is operating at a run rate of $703M. Their balance sheet shows $570 Million in cash and cash equivalents.

Moreover,  Google has registered as a licensed mortgage broker in the US and is already working with Zillow to sell home loans. Google has $90 Billion languishing in cash. Situating that cash in home mortgages is a way to put that money to work.

Zillow Knows The Consumer Better Than Most Brokers

Want to know who owns what house? Zillow knows. Zillow launched an effort to acquire public record data years ago. But Zillow’s customer record goes beyond the public record. Zillow knows the home buyer and sellers’ email address and phone number from a decade of consumers passing through their portal. They even know who the agent was that worked with them on their last transaction!

At what point does it make sense just to take over the entire transaction as the broker of record?

RISMedia to Release White Paper Investigating Industry ‘Disruptors’

Thousands of real estate professionals have spoken, and the vast majority have concluded that Zillow Instant Offers represents a negative addition to the real estate market for consumers, and another step towards Zillow’s alleged attempt to disintermediate brokers and agents and go directly to homebuyers and sellers.

According to an RISMedia Survey launched shortly after Zillow’s introduction of Instant Offers in two test markets—Orlando, Fla., and Las Vegas—nearly 87 percent of respondents consider the introduction of Zillow Instant Offers as a shift towards Zillow to become a real estate brokerage, a strategy that has been anticipated by many since Zillow’s formation in 2006.


While Zillow has publicly stated that it has no intention of going into the brokerage business, we all know that plans can change (Sorry, JayT). Zillow doesn’t have to replace real estate agents — it only needs to replace the brokerage.

The real estate agent would then hang a license with Zillow, just like he or she would with Century 21 or Keller Williams or any other brokerage.

I can sense your blood pressures rising already, but it’s nobody’s fault but our own. We have given Zillow access to our data for years.

Even when ListHub shut down its feed to Zillow and Trulia earlier this year, brokerages and MLSs were pounding at the door to give the portals their data.

With this data, Zillow has developed tools and technology that has allowed it to provide the information that consumers want. Doing that has enabled it to garner a huge following and a potential customer base of people who already know, like and trust the brand.

Yes, I know you will say that the information that it provides is not always accurate — the Zestimates are a joke. And it has so many listings that are already sold and under contract that it makes the site worthless.

Worthless to you, maybe. Zillow and Trulia are still the No. 1 and No. 2 real estate websites in the United States, and their numbers continue to grow.​

To the people who use the site (you know, our potential future customers), they like the site, they know it and they trust it. Remind me, who is it that people do business with again?

Brokerages can only dream of the systems Zillow has in place.


Leads and technology solutions were two of the biggest value additions that brokerages brought to agents beyond a place to hang their license. Now Zillow does both and does it better than most individual brokerages.

Zillow offers powerful lead generation, lead management (CRM) and lead conversion (Premier Agent Assist), transaction management (dotloop) and advertising (Postlets). The only thing missing is the brokerage license.

The only thing missing is the brokerage license.

Obviously, there is more to being a brokerage, such as training and oversight. However, if Zillow were suddenly earning 40 percent of every transaction that its agents closed, that could pay for a lot of training and oversight.

And unlike some brokerages that will sign up anyone with a pulse and a license, Zillow would be flooded with agents who are willing to work this model.

 That wave of agents would give Zillow the ability to be choosy about the agents it brings onboard. It could choose only the ones who can convert those leads into closings, provide great customer service and put more money in Zillow’s pocket.

Zillow Instant Offers

Image result for zillow instant offers danger to brokers
By now you have called in to refill your Xanex Rx after learning that Zillow is not only democratizing the home buying process, it’s turning it into an Amazon-like experience. We knew this was coming.

The way it’s working now: if the seller chooses to use the “Instant Offer” program, they will also receive a comparative market analysis from a local real estate agent, free of charge. That can help them decide if they want to proceed with the sale, and it might even lead to a lead for the providing agent.

One might ask, why not use a “Zestimate”? I mean, Zestimates drive us all crazy, though I think, I hope, by now homeowners know it’s really a starting point, nowhere near the actual value. Last year Zillow announced they had significantly improved the accuracy of the Zestimate tool, and after all, they said, home is worth only what someone is willing to actually pay for it. I believe there are nuances in that phrase: interest in real estate spurs more looking, which in turn spurs more buying. But keep repeating the fake message enough and it becomes the truth! 

Why Would Zillow Become an Online Brokerage?

Zillow has capped out on advertising revenue. In January of this year, they applied significant pressure to their broker advertising products in a calculated move to switch their revenue stream to agents. Brokers were really not that interested in the leads anyway – they just passed them along to the listing agent. But listing agents and buyers agents are starved for leads and were not total un-happy-ish about the price increase.  The price increase weeded the garden of agents who were casual advertisers and paved the way for the serious online real estate agents to get the customer flow they need.

Zillow can continue to move forward with their Mortgage programs. They appear to be RESPA compliant.

Zillow can continue to work with owners and renters to satisfy the property management business.

Zillow can continue to work with developers with their New Home marketplace.

Heck, Zillow can even continue to support FSBOs.

Zillow already has Upstream, Broker Public Portal and RESO.


All of the initiatives that the brokerage community is pursuing will only catch them up to Zillow Group.


What everyone wants to know is the timing of all of this. That is a hard guessing game. There will need to be an inflection point. Perhaps it will be the resolution of the litigation with MOVE, operators of Perhaps it will be driven by the Zillow board of directors who see the company failing to transition to yield profits despite capping out on every Key Performance Indices like revenue per agent, site traffic, etc.

Regardless of what feelings you might have, the cards have been dealt and Zillow is holding the royal flush.



Posted by Cary W Porter on
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Jay from Zillow Group here (you know that, Cary, but your readers may not.

No point in going through this item by item, as you know we've said hundreds of times we have no desire to become a brokerage. But I would like to correct a couple of things in your post.

You mention as reasons we would do this things like we own Diverse Solutions and Market Leader. But we own neither, both were divested, ML years ago.

"Premier Agent Assist" is hardly new. (Nor is the dotloop acquisition "recent.")

You say we are "capped out" on advertising revenue, but the fact is we currently capture less than 5% of the online advertising spend agents make. That's hardly capped out. You also claim site traffic is capped out, yet site traffic continues to grow. (As does revenue per agent, which you also claim is capped out.)

Finally you mention that perhaps the resolution of a lawsuit with Move will be the "inflection point" that causes us to throw away everything we've built and the hundreds of millions we've invested and completely shift our business model to low-margin real estate brokerage. That litigation you're citing as a point was resolved, over a year ago.

Your research on Zillow Group is clearly well off the mark, as is your conclusion that we will become a brokerage.

We have no desire to broker real estate. Many of the arguments you make for such a move are invalid. And there are many other reasons such a pivot makes no sense. Some have speculated for eleven years now that our plan is to become a brokerage. Doing that made no sense then, it makes no sense now and it makes no sense in the future.

Posted by Jay Thompson on Tuesday, August 15th, 2017 at 6:55am

Good, fore-sighted article, Cary, and an interesting, as you say, 'deflected' response from Zillow. In my opinion, the time is coming when the 'standard brokerage' we've known for years will be known as 'the past'.

Posted by Ed Irwin on Monday, September 4th, 2017 at 2:38pm

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