Zillow: Whatever you do. Don’t poke the bear. Lol. Poke!

by Eric Blackwell

The Real Estate Group, Virginia Beach and Chesapeake VA

Author website

It has been 8 years since I have regularly blogged here. During that time I have learned a lot, broadened what I do, and instead of working as an SEO constultant, I am working full time as the Director of Online Marketing with The Real Estate Group in Chesapeake VA. I still live in Southern Indiana, but I love working with roughly 250 of the best career minded agents and without a doubt led by the best broker owners that I have ever worked with. And I have met some great ones during my career. I probably should state here and I will with each post going forward that I am acting in my personal capacity and the views are mine alone and not that of my employers. (Do you know how difficult it was not to drop in a gratuitous Mike Pompeo reference here? Lol) –

I am not an Ivy League educated, MBA type. I am main street personified. So I look at things like Zillow’s announcement and the Notorious ROB’s response to it with a more practical and downhome point of view. (CLICK Here. Please read it before continuing. I’ll wait. 🙂 And be sure to see the menacing picture of the bear. 🙂 ) First off, I want to thank Rob for the transparency that he was paid to consult with Zillow on the PR response to this more. Many others might not have disclosed that. We all appreciate transparency.

But here from my perch just north of Louisville KY, in Southern Indiana, I would like to offer my response to his analysis. Boiled down he basically makes the case for “Real Estate Industry: OMIGOSH, WHATEVER you do, DON’T poke the bear!!! You will regret it! Zillow has (insert hushed tones) WALL Street Money! $2 Billion (end hushed tones) in cash. Ummm…okay Mitt Romney… but those of us on main street (and especially when we are not in Phoenix or one of the other cities that they iBuy in currently) might have a different view.

It does not take a Phd diploma on the wall to quickly calculate that even with $2B in cash and assuming that they have to keep $200M to operate with…and at $300K per house that they can put in play about 6,000 houses at a time. And that they would have to prove that they were seriously profitable, not just rubbing zeros off of $20 bills like they have been. So when people Wall Street offers veiled threats couched as “well intentioned worry” forgive us homeboys and homegirls for not buying into the panic. 6,000 houses spread across 125 markets = 48 homes per market. Ok. Ummm, have at it. Scale it up boys. Actually the faster for you, the more we win… 🙂 (More on the defensibility of iBuying below)

Notorious ROB mentioned that one of “our” reactions was “Zillows My Competitor!”. Actually I think that is not precise. I think for most of us, it is “Yep. Zillow’s My Competitor…yawn..time to get up early and work a little harder. Where is my Diet Mt Dew.” I have been saying it for years. So have most of the industry. They are a competitor. One of many. Main Street was not relying on Zillow’s “Read My Lips” promise about Zillow never becoming a brokerage. Home town folks smell that stuff for what it is. But they are “just” a competitor. Probably need to keep things in perspective.

That said. People who help competitors are thinking short term and not strategically. (Most of the bad decisions I have ever made came from short term thinking. That said, if you have successfully used Zillow to build a team…the store is closing or at least getting a LOT more expensive. Time to create alternative sources of affordable leads is way overdue, but start now.) Simply put, ROB’s point about ROI does not take into account that you need to be thinking 1,2,3 years ahead and not just one month ahead. And digging fast. (My main street opinion.)

Completely missed in his analysis was an analysis of Zillow’s lead generation strategy. The iBuyer proposition as a whole. Is it defensible? What would Mom and Pop REALTOR or Brokerage need to do to re-create it? Money and time. Zillow has money to scale. But do they have the time? Is the bear REALLY as scary as ROB would like us to conjure up? Mostly it is because they are focused on a relatively small number of markets at the moment. They are using the revenue from everywhere to focus iBuying in a (relatively) small number of cities.

The truth is that technology wise iBuying is not difficult to replicate. It is not about that. iBuyers will generate an “offer” but it is still subject to a lot of things and while it is a “simpler” process than selling your home, a REALTOR working with an investor or group of investors in an area could easily replicate it. And it only takes 5 or 6 of those in any given area to make Zillow’s life much more difficult. Would it be inconvenient? Yes. Would it have it’s difficulties yes. But the bear that should not be poked further MAY be the real estate industry in general. Zillow does not have a monopoly on teeth or claws. We are already seeing that take place in many areas with franchises and brokerages work to build iBuyer type calls to action and systems. Some working better than others. What if that accelerated. How bout that? My guess is that it will. By people who can get in or out of it much easier than Zillow can. People with out $22B valuations and quarterly reports. Time for Teams and Brokerages to create some iBuyer networks with investors type of stuff as well methinks.

Bottom line is that while most REALTORS don’t want to use the iBuyer Call to Action to attract leads, we could if need be and I don’t see any technological special sauce that would stop us. And local beats national, especially when national is running it with in house newbies. It just does.

An Additional point: ROB points out that Zillow is using the MLS Feeds again. He makes it sound like that is a bad or dangerous thing. My first thought was GREAT, we are winning!! They have to compete for online leads using the SAME rules that WE do now (in the areas that they are using the MLS feeds). I welcome that. One of the worst parts about syndicators is that they were NOT bound by the same rules that we were. Now they cannot say they are different than us. They are one of us. Bound by the same rules. As a person developing online marketing options for a brokerage, as long as I can have the same rules as someone else, I am fine with competing.

Even since yesterday, we are seeing website platforms already sending out emails to Zillow premier potential clients and others soliciting business to compete with Zillow (that didn’t take long, Morgan. Lol. 🙂 ). More are coming shortly I am sure. We are seeing innovative follow up systems, CRMs and integrations that are helping agents, teams and brokerages follow up faster and more effectively with potential clients faster than ever before. Many of innovations in these systems were developed BECAUSE Zillow Premier Agents needed them to handle multiple streams of leads INCLUDING Zillow. Thanks Zillow for forcing us, your competitor to innovate. I mean that. Our industry needed that 10 years ago, and competition is healthy. Let’s do this.

One last thing from Main Street that would be wise for people to factor into their analysis. We look to compete. We do not look to monopolize. Anyone with a $22 Billion valuation HAS to monopolize or lose market cap. On main street we compete for business locally. With VALUE vs price alone. We focus on Expertise. Personal Service. Our Sphere. Those things won’t go away. And our industry has the tools to compete with the Zillows using whatever the Call to Action of the day is.

I have 4 adult kids. They all have either bought houses in the last couple of years or are in the process of. None of them went to Zillow. This was not because I ranted to them about Zillow being evil, because I haven’t. 🙂 All of them went to local REALTORS in the area that we know. People that have helped our family and friends and proven value have earned our trust and we have helped them. I go to local experts. Turns out, so do my kids. Real Estate is no different. Build your Sphere. 🙂

But that does not mean we cannot use technology to take on competition. And when Jay gets off of the new fishing boat and says “Just keep serving your clients.” and then proceeds to lecture REALTORS on what they should do. I agree with him that serving your clients and working your sphere is essential. But whatever is in the back half of that paragraph behind the serving your clients part is typically how Zillow wants you to behave. Don’t kneel in subservience to “just” a competitor. Just my .02

Main street is not going to be scared by Wall Street. We can innovate as well. My point is this. If the consultant who was paid by Zillow to help them understand REALTOR response and plan theirs shows you a picture of a scary bear who says “OMIGOSH don’t poke it!!”, there are a bunch of us in fly-over country here in the Midwest smiling and more than happy to poke it. With good reason. We have decades of experience of knowing that they show us pictures of scary bears when they want us to “behave” and we know what to do about it.

Now where’s my Diet Mt Dew? 🙂