There’s a Zillow on my Pillow
The Long Of It:
For years Realtors have been losing sleep over the natural enemy of the boutique agent: Zillow. Then a couple years ago Zillow announced the apocalypse when they were expanding their business beyond data acquisition and selling leads to the brokerage world as an iBuying option for sellers. But then...
This last week Zillow announced they were shutting down their iBuying division reporting hundreds of millions lost in the program, and an overall market valuation loss of $10 BILLION, and that they would be laying off 2,000 of their employees.
I feel like Jerry Seinfeld sitting across from George Costanza at the coffee shop, where George is complaining about every negative thing in his life: how nothing is going his way, he’s giving up, there’s no nope...with me responding with an apathetic: “That’s a shame.” Now, my heart goes out to these employees who are losing their jobs before the holidays--this is obviously horrible. But, when I thought I couldn’t care less about Zillow, here I am 6 feet lower helping drop a little of my own dirt on their iBuying grave. And to be honest, it feels kinda good…#schadenfreude
You know what Zillow is tremendous at though? Consumer trust. When the market started to flood with Realtors two decades ago, with thousands of Realtors asking if anyone knew anyone who wanted to buy or sell their home, Zillow started a website actually providing some value to the consumer--a better-than-ever interface for people to search for properties. Sellers then expected to see their own listings on the platform, so Realtors syndicated their MLS data to all sorts of search platforms. Then Zillow (and homes.com and realtor.com, etc) used that MLS data to reach consumers and sell ad space back to Realtors.That’s right. They were using our own (free) MLS data (that we gave them) to sell leads back to us. And boy did it work! Zillow is good at reaching people, which is why our sellers want their properties on the platform, and it’s why we willingly participate. “You give me exposure and happy sellers, and you can use the data to market to other agents.” Here’s the deal, I don’t think Zillow is the devil. And Zillow has never taken business away from me personally. In fact, I think the business Zillow DID take away from agents the last couple years were probably from agents who didn’t belong in the business in the first place--which is sort of the business we are all in. But now, Zillow has had enough of the brokerage and iBuying game and is focusing on selling leads again. Good for them. They have also purchased Showingtime and Dotloop to try and control the end-to-end transaction lifecycle. Good for them. I like those tools and we use them. So how can Zillow be so dang good at data, consumer trust, acquiring real estate tech, but fail miserably at being an iBuying brokerage?! One simple word.
Relationships.
They don’t have them.
They mistakenly thought the consumer/realtor relationship was joined at the hand, where they could move us to the fringe of the transaction with home inspectors, lenders, title professionals, etc; but they just learned we’re actually connected at the heart, and as long as we are focused on our people, the relationships, we always will be at the center of the transaction WITH the client and not become an ancillary service. It cost Zillow a $10 Billion market valuation to learn this.
The Short Of It:
It’s important you are good at transactions; like, really, really good. From the terms and execution of the Purchase and Sale Agreement, to negotiating the deal and providing a white-glove service to your clients--you have to have SKILLS and be EXCELLENT at executing your job. But none of that matters if you don’t have clients.
Michael Maher’s “Seven Levels of Communication” is a great example of how to build and cultivate relationships in a way that will actually get you hired. The ROI is in the Influential Zone. Everything you do in the Informational Zone should be designed to create an event in the Influential Zone. This helps shape how we use our time; where we focus our attention; and what we actually DO. Even if you are generating leads online, the actual relationship is formed in the follow-up. Have you ever started working with a client that you DIDN’T have a relationship with, and fetl like it was a far-more difficult client or transaction? We see it all the time.
Zillow could learn a lot from this graph. I think we all could. But I’ll tell you this...I don’t fear companies who aren’t focused on the relationship.
And I sleep just fine at night. :)
