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Zillow feeling the heat as Realtors flock to Facebook
With Facebook's brand-new ad features along with lead-generation companies, agents are moving their real estate marketing dollars to the world's largest social media platform.
By: ExpectLeads.com, LLC
While the estimated worth for Zillow is in the billions, Zillow is a free service for a vast majority of its users who come to the housing site to browse for their potential new home, check the value of their existing home (a highly debated algorithm aptly named Zestimates™), and even to post their home for sale or rent (for sale buy owner) - all at no charge.
Like most sites of the modern-age, the cost for this service is passed along to companies that pay for the data of the Zillow shoppers. In Zillow's case, the companies are individual Real Estate Agents who pay monthly to get a chance to speak to home buyers and sellers directly and to assist them in their endeavours. For users of free services the adage goes: "If you're not paying for the product, you are the product".
While this relationship may seem like a match made in heaven (Zillow hooks up home-buyers with ready-to-go real estate experts who are eager to help them) the relationship has become tenuous at best. When Zillow began allowing users to sell their homes online at no charge, many real estate brokerages and the National Assosication of Realtors called foul. Not only is home selling (and buying) a difficult endeavor for the average person, it is frought with endless legal paperwork, legal liabilities, and a complicated mortgage, inspection, appraisal, and buying process. Many in opposition felt that to assist users in bypassing Realtors® and Real Estate Attorneys by helping people to assume that to sell a house was a simple as uploading a few photos does a potential disservice to the home seller who may not realize there was much more to the process - and that the cost of a Real Estate Attorney to draw up paperwork (required by most mortgage lenders), the liability that comes when you represent yourself, the time, money and work it takes to show and advertise a home. This is in addition to the fact that most homeowners are not warned or made aware that representing themselves usually results in up to 20% less in final negotiations for their home according to 2013-2015 statistics.
Zillow, feeling the heat from their paying customers (agents who subscribe monthly to be a Premeir Agent™), released a statement saying that they had no intention of replacing agents and that they want to work with agents to bring agents, homebuyers, and sellers together. That aspiration may not hold much water in court. Realtor.com (owned by News Corp) recently filed a lawsuit against Zillow for what they claim is "Trade Secret Theft" by their Chief Strategy Office and the National Association of Realtors recently banned Zillow from all 2016 events pending litigation.
But even with all of the issues between industry trade organizations and private housing companies, individual paying agents have held strong with Zillow in the attempt to grow their database of leads and clients - often spending hundreds of dollars a month on advertising to have their picture and name next to a listing and/or to acquire rights to zip codes of leads of which they are notified of when a user in their preferred area is looking to buy or sell.
That is until now.
While Zillow tightens it's grip on the end users, they threaten to allow their paying members (real estate agents) to slip through their fingers. Zillow Premier Agents have mixed reviews online though the majority are less than complimentary are are far from a recommendation. Zillow agents can now expect to share leads with several other agents, or have their profile appear right along with several other paying members and the listing agent. Many detractors have complained of over saturated areas and poor quality leads. With sometimes steep prices and lower-than-expected results, many agents are passing up on the contract-based Zillow advertising and instead taking their money and investing it themselves in highly targeted ads on Google, Facebook, Twitter, and Instagram.
While many complain of dilution with Zillow, others are discovering that websites like Facebook have begun to roll out new features making ads, lead-generation, and brand-awareness easier and more affordable. In the second quarter of 2016 Facebook rolled out a Lead Generation tool for advertisers which includes lead forms, landing pages, and more. They will also allow you to target ads based on income, net worth, location, and likeliness to buy or sell soon.
As the largest Social Network in the world, Facebook has amassed a large quantity of data on it's users allowing advertisers to reap the benefits by creating ads that are specifically designed, targeted, and served up to customers who are already looking for such services.
New lead-generation companies like ExpectLeads.com®
While Zillow works to mend relationships with the real estate industry, and keep their strong-hold on the housing market, other companies are going to use this distraction to show that there may be better options.