To all the agents in the house,
Andy Florance comes across as a confident man. In a lively phone interview with me last month, Florance, founder and CEO of CoStar, declared, "Zillow is no longer a relevant player" as a real estate listings website that serious homebuyers will rely upon.
Zillow is used by voyeurs, Florance said, "Checking out the inside of their Tinder date's house."
Agents, meanwhile, "obviously hate" Zillow, the CEO said, because of Zillow Premier Agent, which arguably diverts customers from a property's listing agent to a different agent who has paid to advertise with Zillow.
You can read all of Andy Florance's assertions about CoStar establishing its residential real estate, and my subsequent reporting on said assertions, here. But there are a couple of main, and somewhat contradictory, takeaways I wanted to highlight.
First, is that Florance is partly correct. Agents say that they really do hate Zillow. This is because Zillow is now a brokerage, thereby competing with brokerages they assist by posting listings. But the animus mainly lies with Premier Agent, where agents pay monthly fees to have their names pop up to consumers.
Some agents share Zillow's defense that Premier Agent is pro-consumer, because it discourages the same person representing the buyer and seller.
"I remain unconvinced that once you enter into a listing agreement, agreeing to protect your client's interests, that you can suddenly agree to become neutral while pledging to protect the fiduciary interests of both parties," said John Ball, a broker at The Real Colorado Homes Team in Westminster, Colorado. "Dual agency is no more than thinly disguised broker greed."
But the majority of people I interviewed shared the thought of ACME Real Estate's Courtney Poulos that, "Zillow is making money off of consumer confusion."
The second takeaway is that I'm either not interviewing the right people or some of you agents aren't coming clean about your Premier Agent use! Through the first nine months of 2021, Zillow Premier Agent revenue was just over $1 billion, a 42% increase from 2020.
That suggests many buy-side agents rely on the program, or view it as a necessary evil.
Unclear is whether CoStar can make Zillow no longer necessary. The first test comes this spring in New York City, when CoStar unveils Citysnap, in partnership with the Real Estate Board of New York, to directly compete with Zillow's StreetEasy.
Agents, let me know your thoughts. Are you (secretly) dependent on Premier Agent? Can CoStar really cut into Zillow's widespread consumer use? I can be emailed anonymously at mblake@housingwire.com.
Sincerely,
Matthew Blake
Senior Real Estate Reporter
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