Breaking Down the Zillow Touring Agreement
WELCOME
Ever have one of those weeks where it goes kerflooey and the only thing that gets you through it is thinking about the beach? Well, I have definitely just had one, so I’m delighted to be gearing up to spend Mother’s Day at the ocean with my whole family. I swear to you, there’s little that salt water, sunshine, and Glitter time with my grandbabies can’t fix.
But before I go, we need to talk about what’s on everyone’s mind—the Zillow touring agreement. So let’s do it!
THE REALITY OF REAL ESTATE
No Change of Heart Here
Unless you’ve been stranded on a desert island Castaway-style, you already know that Zillow has just announced their seven day touring agreement.
Here’s what Zillow’s Chief Industry Development Officer (which doesn’t sound like a Bond villain’s job at all) has to say about this on the Zillow Group blog:
The proposed NAR settlement outlines the requirement that buyers have written agreements with agents before touring. While this may seem like an extra step, when done right, agreements can provide transparency, promote open conversation, and foster alignment between the two parties. However, insisting that a buyer sign an exclusive, long-term agreement with an agent, perhaps before even meeting the agent, feels premature. That’s why Zillow has created a non-exclusive touring agreement, and we’re making it available for use to the entire residential real estate industry.”
Zillow says this agreement will benefit the consumer.
I beg to differ. In my opinion, the entity that benefits most from this is Zillow.
First of all, offering an agreement like this flies directly in the face of what the NAR is about to do. Come July, we cannot show buyers a single home without an agreement for compensation. On top of that, our E&O insurance won’t cover us if we don’t have that agreement. So our companies and our association are both telling us we have to get a signed contract before we show even one home, and if we don’t, we’re in violation.
The president of the Virginia Association of Realtors has been very clear that this seven day touring window is in violation of the state law and the code of ethics. (This will vary from state to state, but stay tuned because if your state NAR doesn’t have rules yet, I’m sure they’re coming.) Trust and believe that Zillow law does not supersede state law.
But in most states, Zillow can get away with this because they’re not a brokerage and they’re not bound by brokerage rules. This gets awfully tricky because if you’re an agent and you go ahead with the seven day test drive, if your clients Bobby or Suzy fall through the floor of 123 Banana Street, Zillow has no liability.
If in that seven days, Bobby and Suzy decide they want 123 Banana Street and when y’all write the offer, someone fat-fingers the data entry and types “127 Banana Street,” again, guess who has no liability? You and your brokerage are on the hook. And if Bobby and Suzy buy 123 Banana Street in that seven days, you’re only going to get paid if the broker is offering compensation and 40% of it is going to go to Zillow. (And if you don’t get paid, no harm, not foul because you were required to get them to use Zillow Home Mortgage.)
And, P.S.? When there are no provisions to pay the agents, those agents have to turn around and spend their money on Zillow advertising and leads.
Now, what’s to stop an agent from saying, “Listen, Bobby and Suzy, I’m going to be at the beach for a week, but I can set you up with a bunch of showings with a Zillow touring agent.” Do you know how many showings can be done in seven days? At least 34, because that’s what my associate Elizabeth did recently with a couple who was in from New Jersey to look at homes.
Anyway, if Bobby and Suzy wait until I come back to write an offer, that Zillow touring agent gets nothing. Imagine showing in the ballpark of 34 homes with not $1 to show for it. The premise is that this will give greener agents the opportunity to meet and court buyers as showing agents. But they’re treating the touring agents like door openers, making it seem like real estate agents aren’t important and that our function is purely mechanical.
I have never in my life seen a company capitalize on a specific industry with no investment. This company has made billions doing the opposite of what Realtors do. We have safeguarded and gate-kept the information that they are freely giving to the consumer. When we started giving them information, they turned around and sold it back to us. They are very good at capturing all the attention, but their whole model is designed to pad their own bottom line, not yours, and not to the consumers’ benefit.
What’s ironic is that for all the millions of people who look at Zillow every day, only 2% of those who search on Zillow buy their home from Zillow.
So what’s an agent to do with all of these changes and challenges?
You make yourself valuable by becoming a trusted advisor, and I will cover what means when I’m back from the beach.
@glenndabaker Don’t catch yourself… People don’t look for houses on Zillow people look for houses on Google. They put in 123 Banana St. in the Google se… See more
GLENNDAISM
One Final Word
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First of all, it’s in a gated, 55+ gated community in East Cobb. It’s beautifully appointed and in absolutely pristine shape. There’s a first floor master which all my senior buyers want, but there’s plenty of space upstairs when they kids and grandkids come to visit. Plus, the outdoor area is just a delight and ideal for entertaining, with enough space for your dog to his business in private. If you’re looking for a turn-key experience, look no further!
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