Thrive Not Survive Episode #50: Zillow is in Canada
TNS Podcast Episode #50: Zillow has Come to Canada
Today’s episode is on Zillow’s entry into the Canadian market. I got back on Wednesday afternoon after having been asked to speak as part of a panel at the first annual Zillow Canada Forum in Toronto. It was a blast and my mind is still spinning with all of the amazing content that I consumed and conversations that I had.
I wanted to cover off a few things that I learned at this event for you, our listeners, with the hopes that you will have a better understanding of what exactly Zillow is. There are a lot of agents that have never even heard of Zillow and there are some that have. There is a lot of misinformation floating around right now and I wanted to at least give you my take on what this company is all about, I am going to try and be as unbiased as I can here.
Now, that said, full disclaimer….Redline Canada has partnered with Zillow. Our agents are starting to fill out their profiles and we are hoping that our boards are going to relinquish their control on the data so that we can begin to syndicate our listings direct to Zillow. In light of this information, I hope that you will stick with the podcast, like I said, I am going to do my best to present to you the facts with the hopes that you can come to your own conclusions.
First I am going to describe who Zillow is and then give you my take on their entry into Canada.
Zillow was established in 2006 launching their first website which quickly brought in thousands of listings and millions of searches per month. Fast forward to today and they now generate 186 Million monthly searches, have relationships with over 600 MLS’s, builders and developers, property management companies and for sale by owner’s making them the most complete property listings website in North America. There are over 1 Million real estate agents in the US and about 10% of them use Zillow as a platform to advertise and generate leads for themselves.
Zillow uses traditional advertising to reach consumers and get them to the website or downloading the smartphone app - then they keep them on the platform by deep personalization and providing the information consumers want. They know what the consumer wants because they have done massive amounts of research on their consumers, they use AI on the back end to study search habits and try to provide the information to the consumer before they even have to ask the question.
What Does the Entry of Zillow into the Canadian Market mean for me as an Agent?
Alright….that’s who they are in a nutshell. Now let’s talk about what their entry into our market means and what it looks like for the agent as well as the consumer.
First the agent:
Zillow has a lot of work in front of them. Remember, they have been in the US for twelve years and it has taken that long to get as many listings as they do now. They are continually working on the remaining MLS’s out there to make sure that they have the most up to date national database of properties for sale or rent in the US
Zillow is NOT going to have a direct effect on you overnight. It is going to take time and a lot of conversations with boards to get the listing count up. When and if they do wind up getting an MLS feed for your area, your brokerage will have the decision as to whether they want to syndicate their listings to the site, just like the DDF. And, just like the DDF, this will be free to the brokerage as well as to the agent, it doesn’t cost anything to put the listings on Zillow’s website.
As an agent (if you’re not with Century21) it is important for you to go and create a profile on the platform, it is equally as important for you to not only fill that profile out in full but to also make sure that you are sending your clients there to leave you reviews. Here is why this is important:
If you have a listing on Zillow, you will ALWAYS be prominently featured on that listing, your headshot, your profile, your reviews, your sales history, your areas of expertise will always be first above the agents that are paying to be there. Zillow’s research has shown that if you don’t have a complete profile including a headshot and reviews your chances of generating a lead through their platform is greatly diminished, so make sure you get that filled out. That said...if you look at any IDX site, most times the requirement of the board or their rule states that the listing agents brokerage must be mentioned. On our BoomTown website, the listing agents brokerage is mentioned, at the bottom, in small text. They get attribution but it is not prominent.
A question or a comment that always comes up is that Zillow is going to sell your leads back to you. I’d like you to think about this from a different angle...Zillow is another IDX platform that will have the ability at some point in the future to showcase every listing in your market on their website. When that happens you will have a choice as to whether you want to advertise on their website.
Said another way, if you have a website that has an IDX feed (meaning you are showcasing every listing in your market) and you are using that site as a lead generator for yourself and paying money to generate those leads, what makes Zillow different from what you are doing right now?
Ultimately, when Z does come to your market, if you want your listings syndicated you are going to have to find a brokerage that is going to have that partnership or agreement in place. Keep in mind that in the future (we feel the tipping point will be in about 24 months) you will get questions from the seller if their listing is going to be on Zillow, what will your response be?
Probably one of the biggest sore spots for Realtors in the US has been the Zestimate. Remember a few years ago, Zoocasa tried to rip off the Zestimate with something called the Zoopraisal?? Oy. Anyway, when the Zestimate first launched it had an average of 12% plus or minus with respect to a home’s value. Today it is closer to 4%.
Does this matter for the consumer? In most cases, according the Zillow’s research, yes it does. The consumer wants to have information around the price of their home and they want it to be accurate. They are very clear on their site around data and always give the consumer a price range of what their house will be worth.
In my mind, the Zestimate is an excellent conversation starter and one to be used to the agent’s advantage to extrapolate and explain the data that Zillow used to come up with their ranges. If the agent feels they are way off, that will be explained by way of their CMA. Hopefully the agent has enough experience to really show the consumer the data and explain in it a way that a computer generated algorithm cannot.
With the announcement here recently around sold data, please know that Zillow has every intention of following the rules set out by each member board. If one board says that data has to be password protected or not disclosed publicly, Zillow will comply just as they do with a number of Non Disclosure states in the US like Texas for instance. I don’t think we will have to worry about Sold data being shown publicly here in Canada for a long time so this is something Zillow probably isn’t to concerned about and neither should the consumer.
Zillow wants to provide as much data to the consumer as possible including information on school districts, property tax information, neighbourhood information (including whether the market is a buyers market or sellers market, mortgage information, the zestimate on the home.
Right now on the Canadian listings, the information is limited but will come with time.
Ok...here are some statistics to leave you with:
Zillow has invested $500 Million dollars into R&D between 2015-2017 and hired 1000+ programmers
100 Million + visits per year from non US audiences to Zillow dot com
4 out of 5 US homes have been viewed on Zillow with 186 Million monthly unique users
Zillow has done research on texting which helps them generate those warm leads for their Premier Agents: 96% of smartphone users text (what I want to know is who are the 4%?). 98% of text messages are opened versus 22% of emails. 95% of texts are read within 3 minutes of sending.
Last one, this pertains to leads and lead generation: Nearly 50% of all leads generated on the Zillow platform are not contacted (47% to be exact). 24% of agents will make two attempts and only 12% will attempt more than 5 times to get in contact with that lead.
Remember, Zillow is here. If you are concerned about Zillow coming in and stealing your leads or stealing your business or looking to put you out of business, please look at this objectively and use the US as the model.
Zillow started 12 years ago and today there are as many real estate agents now as there was then. Zillow’s main source of revenue is from Realtors, why would they look to be rid of the Realtor when they are their main source of revenue? Zillow is like an IDX search site where you can choose to advertise or not.
Regardless of where you stand on Zillow, make sure to ask questions, to educate yourself and don’t just listen to me or what other leaders in the industry are telling you. Get as much information about them as you can and then make your own informed decision.