Real estate brokerage hasn’t been the same since Zillow was founded in 2006.
Over the last 14-years Zillow has made every attempt to integrate itself into the home sales process. Now, Zillow is at it again with the announcement on Feb. 10 that they have acquired ShowingTime, the industry’s top showing management software for $500 million.
With multiple acquisitions of companies, Zillow has vertically integrated itself throughout the entire home buying and selling process. Some of these acquisitions include Hotpads, StreetEasy, and Trulia. The massive Trulia acquisition for $3.5 billion sent shockwaves through the real estate world as it became clear that Zillow would soon be unstoppable.
As much as Realtors loathe Zillow, they need the company to generate buyer leads for agents. Agents can pay anywhere from a few hundred to over $10,000 per month for leads from Zillow. The leads are not cheap, and they are not always effective. Most agents lament the fact that most selling leads generated with that data back to agents.
In 2015, Zillow acquired Dotloop for $108 million. Dotloop is a transaction management software many agents use nationwide. It was a strategic move that would allow Zillow to integrate itself even further into the sales process. All evidence points to the fact that Zillow desires to get into the real estate brokerage business. This move is one that residential agents have always feared. Zillow is already operating as a brokerage in several markets.
The most recent acquisition will further provide Zillow with data needed for it to compete in the brokerage world. With the data that ShowingTime provides, Zillow will now have the last piece of the puzzle to integrate all brokerage data into one location. The move will make it far easier for Zillow to engage in brokerage in more markets quickly.
Realtors across the country are not happy about the move.
The main concern is that since Zillow is a member of most MLSs, and the company is beginning to start engaging in brokerage services. They have an unfair advantage.
Tom Woiwode, broker of Coldwell Banker Access Realty in Savannah stated, “Prior to Zillow’s announcement of their intent to acquire Showing Time, the members of this organization (MLS) freely entered their private clients and customers information into Showing Time, knowing the entity was a neutral third party who did not compete with them in the marketplace.”
MLSs are now in an awkward spot because a brokerage/member of the MLS has all its competitor’s client data.
Woiwode went on to say, “I do not believe anyone past or present ever contemplated a participant acquiring that service. Through no fault of our members, that data and its history will now be owned by a fellow participant.”
The feeling amongst most Realtors is that Zillow is engaging in a data power grab. According to social media comments, most Realtors are not surprised by the move.
With Zillow now having access to most client information, it is positioned to take significant market share from local residential brokerage firms. As Zillow progresses in its acquisitions, more of local agents will be forced to join the Zillow brokerage, hurting local real estate companies.
Real Estate is an ever evolving profession. Zillow has disrupted the industry multiple times, and it doesn’t look like they plan to stop any time soon.