The Big Loser In Zillow’s Continued Growth Will Be Local Communities 

Anyone watching Zillow’s growth should have remembered that Zillow Group has a responsibility to its shareholders to become profitable. The company naturally would continue making changes to diversify and generate profits. As a real estate brand, expanding into a brokerage business is a common-sense step. The August 2021 launch of Zillow 360 shouldn’t be a surprise. 

Zillow touts its new Zillow 360 product as a premium experience that saves home buyers and sellers money. As it tries to compete with other iBuyer programs, it’s essential home buyers and sellers reflect on the impact these programs have on their real estate experience. When homeowners opt for a national product instead of using local service providers, communities lose out.

How iBuyer Programs Work

iBuyer programs have been operating for several years now. In 2018, 9.6% of the 6.12 million homes sold were to iBuyer programs. Until Zillow 360’s launch, market leaders included OpenDoor and Redfin.

Typically, much like a real estate investor who flips homes, iBuyer programs purchase homes from the owner, clean them up, and resell. They usually prefer homes that don’t need extensive work, are relatively newer, and are not unique or custom home. How specifically they operate varies between the companies.  

Programs like Zillow 360 lure home buyers and sellers by focusing on the convenience of “one-stop shopping,” touting the time they’ll cut out shopping around for the right real estate agent, mortgage lender, and title company. Home sellers don’t want to worry about showing their house, dealing with the upkeep to keep it show-ready, the negotiations afterward, and the moving process. Zillow 360 also promises discounts, rebates, and kickbacks for using its service.

Buyers and sellers don’t often realize that attached hidden fees often make these programs more expensive. They also don’t have a choice in selecting their real estate agent. Working with the right person can make a significant difference in the experience of finding the right home and closing the deal. Still, some home buyers or sellers opt out of using a local real estate agent even if it means spending an extra 2-5% to do so.

Zillow’s Impact on the Industry

There’s no doubt Zillow has had a significant impact on the home buying and selling industry, even before the launch of Zillow 360. More home buyers turn to online search for properties on platforms like Zillow long before contacting a real estate agent. What real estate professional hasn’t had a potential client bring up the Z-estimate in their listing appointment?

Not all home buyers are aware that each time they share their information on Zillow and inquire on a property that their information is sold as a lead to real estate agents and brokerage firms. That’s the reason they are bombarded with emails, calls, and marketing materials after making their online query.

Contact and search data is shared with many of Zillow’s service providers. As Zillow states in their privacy policy, the information is collected and shared to benefit the customer, but having your contact data is also part of how Zillow generates income. In Zillow’s Premier Agent service, Real estate agents pay $20-$60 to receive lead information and premium placement on a listing page. 

Consumers also aren’t aware of how many real estate brands now fall under Zillow Group’s umbrella. All these brands funnel data into Zillow, which they can use for marketing and income generation purposes. These include: 

• DotLoop. A service used by many real estate professionals and brokerages to handle the transaction process in real estate. This cloud-based system manages contracts, agreements, pre-approvals from banks or lenders, copies of earnest money checks, and other documents relevant to the transaction. 
• Showing Time is a more recent Zillow purchase. Showing Time is the leading showing scheduling software used by real estate agents across the country. The data available from ShowingTime helps Zillow track which agents in various markets are working with the most buyers, sellers, total sales volume, listing sale price data, information on what homes are seeing the most traffic, and more.
• Mortgage Lenders of America. With this acquisition in 2018, Zillow was able to move quickly into the mortgage lending market. Zillow’s aim with the purchase was to develop new tools and partnership opportunities for brokerages with in-house mortgage operations and mortgage affiliates. 

With the expansion into the iBuyer arena through Zillow 360, the real estate giant continues to leverage its reach to control more aspects of the industry.

Zillow 360’s Implications for Local Businesses 

As selling and buying through iBuyer programs become more prevalent, consider the long-standing implications on local communities. iBuyer programs remove money from local communities to benefit the national conglomerates. When a home buyer or seller chooses to use local brokerages and real estate agents, those professionals spend the money in their local communities, both in the vendors they choose to work with and their personal income. 

iBuyer programs may hire “local” vendors or real estate agents for their work, but remember, these corporations are driven by profit first. They slash expenses by seeking out the best rate and not necessarily quality service. It’s also about efficiency; they want vendors who work quickly or close fast. Homebuyers and sellers should ask if their assigned agents and vendors truly have their best interests at heart when transacting through the iBuyer experience.

Remember, too, that many brokerages invest in their communities through local nonprofit partnerships, giving financially and through time volunteering. It’s thanks to brokerage support and donations that organizations similar to Habitat for Humanity can function. It’s not uncommon for real estate agents to waive commission fees when assisting veterans, women’s organizations, and other nonprofit groups with their real estate needs. They can only afford to do this if they have a solid client base.

Alternatives to using Zillow

Homebuyers and sellers have other choices when it comes to handling a real estate transaction. Most real estate professionals understand home buyers and sellers are turning to sites like Zillow because they want access to data. However, Zillow doesn’t need to be the go-to source for your data.

The simplest way to learn about your real estate market is to run a web search for the target “city” with the keywords “real estate” or “homes for sale.” For example, search Google for “Charleston homes for sale,” and you’ll uncover relevant information about the Charleston real estate market.

Your best bet for accurate information is to find a local real estate website with a home search connected to an IDX feed for the area. This type of website provides up-to-date listing information. Many make providing your contact information optional or don’t require you to provide anything. They are less likely to share your data with outside providers or use your contact data to generate profits for them. 

If you are looking for homes or real estate in the South Carolina or North Carolina market, EZHomeSearch.com covers SC and most of NC. Our client care team can assist you with your search and will only connect you to a local professional when you ask to be connected. We don’t sell or leverage your data for financial gain.

In addition, our listing data and information updates every 15 minutes. Our search filters are equipped with precise targeting information. Not only can you filter by price, bedrooms, and bathrooms, but you can target waterfront properties, golf course communities, and more. 

When you choose to search with and use a local provider like EZHomeSearch, you support local communities and work with real estate vendors committed to providing the best possible experience for your real estate needs.