PAULA'S SOUTHAMPTON BLOG: KILLING BROKERAGE--HOW LONG BEFORE ZILLOW SUCCEEDS

KILLING BROKERAGE--HOW LONG BEFORE ZILLOW SUCCEEDS

KILLING BROKERAGE--HOW LONG BEFORE ZILLOW SUCCEEDS???

The Headline says it all: Zillow Launches Instant Offers Pilot Program  

This is another way to allow sellers to list their homes and for buyers to buy them, resulting in a deal without having to pay a commission!! Sound familiar? I wrote a post several weeks back about another such Zillow link designed to side-step brokerages and to allow deals to get done without the "interference" of an agent:

MAKE ME MOVE...Another Way To Take Money Out of Your Pocket!!

Meanwhile, the push to get agents to pay Zillow for their own listings has heated up and here in the Hamptons now there are more and more agents buying into it just to survive. 

It is a major shakedown that Zillow is doing--like the mafia---making you pay for "Protection" of your own listings!!! By the way they now have THREE ways for owners to list their properties with Zillow so they can do direct deals--with no commission at all!

Unfortunately, informing our fellow agents has had very little if any impact--I have been blogging about this since 2007!! It is a fact that Zillow has a stated goal to put ALL brokerages out of business and they are well on their way to doing just that. 

A CONSERVATIVE GUESS OF THE IMPACT ON SOUTHAMPTON ALONE

Zillow just bought out our local MLS! So not only do they have the local brokerages GIVING their listings to Zillow, they are paying them a huge fee to do it!!! Ah, the absurdity!!!

It is not easy for an agent to stop paying them especially if they have been doing it for a while and it begins to appear that Zillow is the source of  their income!! However, Zillow is NOT doing what you think they are doing!

In just this one office here in Southampton, if 10 agents pay a conservative $1000 a month to Zillow  that is $10k a month---and since THEY MAKE YOU SIGN UP FOR AT LEAST 6 MONTHS that is $60,000!

Think about that! And then multiply that by 6 major offices here in Southampton alone, that is about $360,000 for 6 months from those who are paying them!!!---Multiply this figure by 7 (for the number of Hamlets here) and it looks like Zillow brings in approximately $2,520,000 every 6 months just in the Hamptons!!

I hear it is actually a conservative amount if you are paying them only $1000 a month. Realistically it is more like $2,000 a month per agent from those who have found out you NEED to pay that amount or more just to get valid leads!!! 

Add into the equation, the fact that we have well over 2000 agents on the East End of Long Island. The Hamptons is made up of 7 small hamlets and our business is made up of over 80% second home purchases...

THEY WILL PUT YOU OUT OF BUSINESS AND IN PERSONAL BANKRUPTCY IF YOU KEEP GOING BACK TO THE WELL! THERE ARE TOO MANY AGENTS AND NOT ENOUGH PROPERTIES TO MAKE A SIGNIFICANT AMOUNT OF MONEY! IT IS INSANITY TO KEEP PAYING THE SPECIOUS MONGER!!

 
 

 

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                                     **ALL INFORMATION AND CONTENT IN THIS BLOG IS ORIGINAL TO PAULA I. HATHAWAY.  The views expressed herein are my personal views and do not reflect the views of Douglas Elliman Real Estate

 

Paula I. Hathaway, Senior Broker Associate, Douglas Elliman Real Estate

Southamtpon Village Real Estate Specialist since 1995;  Also Specializes in North Sea, Noyac, Water Mill and Bridgehampton, New York

Diamond , Gold and Chairman's Circle Awards; Top Producer since 2005

 

Click here to see my Hampton's website to see all my listings; please email me or call me for all your real estate needs in Southampton, Bridgehampton and Watermill:  http://www.elliman.com/paulahathaway

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Comments

this is a very scary situation for all agents.. although it will not happen overnight.. it could destroy the industry

Posted by Mark Loewenberg, KW 561-214-0370 (KW of the Palm Beaches) 7 months ago

As long as agent stay on the lazy side and spend thousands of dollars to buy their own leads z will be in the mix with many others.

Posted by William Feela, Realtor, Whispering Pines Realty 651-674-5999 No. (WHISPERING PINES REALTY) 7 months ago

Hi Mark,

Yes it is---I get cold chills now because as long as I have been blogging on the subject matter and with the disregard of any of my warnings makes me wonder where are the sound thinking people that fill the ranks of brokerage??? Who are they and how can they go on without taking heed?? I am including the managment of all the offices as well--top management has allowed this to go forward; even encoureged it AFTER the warnings came out!! I have been very vocal about this--I feel so helpless now!!

Posted by Paula Hathaway, REALTOR, Sr. LBA,, ...Finding Your Place In The sun! (Douglas Elliman Real Estate) 7 months ago

William: I think you are right---Z watched the Hamptons---I am certain it may even be because of my outspoken stance from the very beginning---2007-8. Now they have taken over the entire real estate community because they set up a partnership with my company 2 years ago and I was astounded when I heard that they were handing over all our data---with no reservations!! 

Posted by Paula Hathaway, REALTOR, Sr. LBA,, ...Finding Your Place In The sun! (Douglas Elliman Real Estate) 7 months ago

      NAR fell on their sword years ago.  Our Boards and MLS's quickly followed suit, offering everything to Zillow on a silver platter. 

     I believe that we are past the tipping point.

Posted by Fred Griffin, Licensed Florida Real Estate Broker (Fred Griffin Real Estate) 7 months ago

Hi Paula- many consumers can see the value in having a qualified, professional agent working for them. Hopefully, as agents show their value smart consumers will understand that you get what you pay for.  Unfortunately, there will always be consumers who look only at what money they can save and never consider what we already know. 

Posted by Kathy Streib, Home Stager - Palm Beach County,FL -561-914-6224 (Room Service Home Staging) 7 months ago

Fred: This was so predictable---with a company clearly stating their plans to put us out of business...what happened to common sense? Gone forever---we are not going to make it as a profession with Zillow breathing down our necks---they are like a giant vulture waiting for the carcases to pile up!

Posted by Paula Hathaway, REALTOR, Sr. LBA,, ...Finding Your Place In The sun! (Douglas Elliman Real Estate) 7 months ago

Kathy: I agree and I still get those people who appreciate what I do for them but it won't take much to get them to follow the lemmings to the sea. If Icould make a prediction: There will be a time period of health in the real estate community but the masses of people who are currently going out after the home they want to buy now are having what they view as great success and those stories are getting out there by word of mouth. This message will become the silent killer to our brokerages as more and more buyers go out on their own....Then one day when the problems and the hard work that it takes to get a really good home with all it's issues ironed out are finally recognized, we will all have found another way to make a liviing and the professionals will not be there anymore...More work for lawyers as these DIY deals bring about nightmare problems for the "innocent" buyer. Legal fees and overwhelming problems with title issues that are hidden from those who know nothing about real estate take down more and more homeowners and where are the professionals??? Nowhere to be found!!

Posted by Paula Hathaway, REALTOR, Sr. LBA,, ...Finding Your Place In The sun! (Douglas Elliman Real Estate) 7 months ago

Paula Hathaway, REALTOR, Sr. LBA, - I think it is about time we do something sooner rather than later....

What should we do, I have no idea - but something for sure.

(Irony is - we fed this beast and now the beast is about to eat us!)

Posted by Praful Thakkar, Andover, MA: Andover Luxury Homes For Sale (eXp Realty) 7 months ago

Zillow just bought out our local MLS! <- is this true? That's eye opening to me. And when it comes to Z my eyes were already opened. Our boards make it very easy for Zillow to continue their practices. Case in point, as the qualifying broker for my company, I chose NOT to put my office listings directly on Zillow (I syndicated them separately so I could brand the pictures to ourselves - different story altogether). Well, every time I log into the MLS, I have to look at a pop up that screams at me that my listings are not being sent to Z and how easy it is to remedy that situation. And there's NO way to close the pop up, you just have to wait it out! 15 seconds of staring at this thing and spitting nails.

Posted by Maggie Dokic | Miami, FL | 305.81.HOUSE (46873), GREEN, CDPE, SFR, Pinecrest | Palmetto Bay | (eXp Realty LLC) 7 months ago

Praful: It is time and we have begun here in the Hamptons---starting by signing a petition that is directed at our company owners to stop feeding our listings to this monster. Next, I believe we need to make the Department of State aware of how a non-licensed entity has become the leading cause of legal problems within the home buying and selling population. They (Zillow) are leaving the public vulnerable to the unknown issues that naturally pop up when doing a real estate transaction. Although we as a profession may never hear all the horror stories, I am here to tell you that given a period of time, those stories will be told. 

Posted by Paula Hathaway, REALTOR, Sr. LBA,, ...Finding Your Place In The sun! (Douglas Elliman Real Estate) 7 months ago

Maggie: Yes, Zillow bought our local "MLS" HREO.com---the multiple listing service that our local companies all joined to offer a specific kind of service for this community which is a resort area, with second home purchases as the leading sort of real estate deal. Our listings are no longer being handled as they were, with specialized care for the absent homeowner and the international buyer. They are now being offered on a soon to be defunct system.  All the local listings  are becoming just another part of the giant company who is looking to keep local brokerages from doing business!! The purcahse of HREO has allowed Zillow complete access to the private homeowner information with contacts, complete property details and all of our professionally taken photographs. I knew this would happen and warned my company two years ago when they became "partners" with Zillow....crickets....

Posted by Paula Hathaway, REALTOR, Sr. LBA,, ...Finding Your Place In The sun! (Douglas Elliman Real Estate) 7 months ago

No argument from this 'peanut gallery' and I can tell you that  is capitalizing on the disjointed, independent nature of agents all scrambling to try to be the 'King of the Hill'. What will that 'Hill' be worth when they are all out of business?

Posted by Sandy Padula and Norm Padula, JD, GRI NMLS#1483386, Presence, Persistence & Perseverance (Realty One Group) 7 months ago

Having local MLSs fork over everything to Zillow, seems exactly like "falling on their sword," as Fred Griffen points out!  It's putting unreliable algorithms before real estate professionals.

Posted by Myrl Jeffcoat, Greater Sacramento Real Estate Agent (GreatWest Realty) 7 months ago

Hi Paula, I think you are right and they have this thing all planned out. The problem is they know how agents are and that the masses will give in and pay in hopes of getting a piece of the action. It will be years before agents figure it out and redirect their resources to their own lead generation and websites. The die will be cast by then.

Posted by Debbie Reynolds, Your Dedicated Clarksville TN Real Estate Agent (Platinum Properties) 7 months ago

Sandy and Norm: That's what I',m thinking--it won't be too long here before these opportunistic companies, (Zillow, Trulia and Streeteasy) will have cleaned us out! Now with Air B&B, the once lucrative summer rental business is also going by the wayside!! We will be dealing with empty shelves here soon in my opinion. We have already had three years in a row of a very week rental market.

Mryl: In this case there was animosity on the part of the owner of the MLS(HREO.com) since they were gouging the brokerages big time and it was known that the brokerages did not want to continue paying their high fees . HREO was privately owned and they sold out to Zillow who was more than willing to pay a big ticket price tag to establish themselves as "Local"...All of our content went directly into the pipeline of our biggest opponent. 

Posted by Paula Hathaway, REALTOR, Sr. LBA,, ...Finding Your Place In The sun! (Douglas Elliman Real Estate) 7 months ago

Debbie: You are right on target here....it's like they could care less. There are a few agents who have been highly successful with the Zillow sites and pays them huge amounts of money to "protect" their positions. I have heard that one of them has pulled her money from them--that puts the fear of God in the hearts of Streeteasy and Zillow...not a healthy thing for the rest of us.

Posted by Paula Hathaway, REALTOR, Sr. LBA,, ...Finding Your Place In The sun! (Douglas Elliman Real Estate) 7 months ago

I'm sure attorneys everywhere are salivating.  Sellers and buyers closing transactions without the assistance of a professional is a recipe for lawsuits down the road.

Featured in BananaTude!

Posted by Belinda Spillman, Colorado Living! (Aspen Lane Real Estate Colorful Colorado) 7 months ago

Belinda: That's what I am thinking too---it almost makes one want to create a new way of doing brokerage. I understand that there are small groups of agents gathering in smaller companies or partnerships offering the care and expertise that is needed by most people. This is happening  all over the country with the goal of trying to out-wit the huge brokerages who are giving away our life blood (our listings) at every turn. ...what would happen if this new way of doing real estate became a trend that can not be meddled with in terms of giving away data?? ...if the Z, T and S companies did not have all the content they now enjoy??? This sounds insane but I hear it's beginning to happen... We will see!

Posted by Paula Hathaway, REALTOR, Sr. LBA,, ...Finding Your Place In The sun! (Douglas Elliman Real Estate) 7 months ago

Our industry is definitely changing and Zillow just might be our own personal Uber.  Constantly letting buyers and sellers know that they are "not" the MLS and only a lead generator for agents gets old.  Will Instant Offer work?  For the right type of seller yes....but not your average home seller.  The majority of people still want us to be involved...but how long will our business model keep working??? Hopefully, I will be long gone and selling the best cloud with a view of the Pearly Gates before it happens!

Posted by Evelyn Santiago, Managing Broker Heart Realty Group, Inc., Passionate About Real Estate & Our Clients! (Heart Realty Group, Inc..) 7 months ago

This is beyond frightening. But it was bound to happen. Evelyn is right. This will be our Uber.

Posted by Jane Peters, Connecting you to the L.A. real estate market (Home Jane Realty) 7 months ago

Evelyn: You are right--it is our very own UBER with all the devastating effects that come with it....Air B&B has taken a toll on our rentals too and as a result has impacted the infrastructure here in this water front paradise. We now see that every house is a hotel and the numbers of people that impact our glorious slice of heaven is ruining the fishing, clamming, oyster and mussel business--also bay scallops are disappearing too. 

As for the effects of Zillow on our economy here in the Hamptons---this is a second home market with most year round residents being real estate agents---how do you think that is going to look in 5 years?? I give it about 5 years before those who are buying directly find out they have no protection in a direct deal--that the risks they are taking are real when they buy directly---they will want to have a real estate professional assist them and we will be long gone!!!

Posted by Paula Hathaway, REALTOR, Sr. LBA,, ...Finding Your Place In The sun! (Douglas Elliman Real Estate) 7 months ago

Jane: I agree---it is devastating to this area and I

give it 5 years as I mentioned above---then these buyers will be back to start over with the help of professionals---we may not last that long!!

Posted by Paula Hathaway, REALTOR, Sr. LBA,, ...Finding Your Place In The sun! (Douglas Elliman Real Estate) 7 months ago

I'm certainly not a proponet of this!  Pull the feeds as far as I am concerned!  The local phoenix market is already fighting a version of this with offerpad and opendoor.  It will obviously vary by market...but I wonder how zillow will do with this once the markets shifts over to the buyers and values start to drop!

Posted by Stephen Arnold, CRS, GRI, SFR (HomeSmart Elite Group) 7 months ago

Stephen: That will be interesting indeed! I often wonder about market changes and how a major downturn might affect how these sites work for the public. But then I remember that Zillow came along at the time of our worst recession ever and they appear to have taken the real estate community by storm--Most brokerages were pulled kicking and screaming into the abyss. Agents didn't seem to see it as an expedentiture they couldn't afford--they used it as ad costs. However, now that those "ad costs" have gone sky high just to get your face next to a listing that is not yours--(to get a lead who thinks you are the listing agent and who turns away in anger when they find out you  are NOT) and to realize the damage this can do to your reputation and your standing in your real estate community--well, it is now a very different story. Maybe it is evolution playing into the profession. In order to evolve, one needs to survive AND prosper, not just survive!!

Posted by Paula Hathaway, REALTOR, Sr. LBA,, ...Finding Your Place In The sun! (Douglas Elliman Real Estate) 7 months ago

I think it is a brilliant stroke and I will always giver them credit for innovation.

Posted by Joe Pryor, REALTOR® - Oklahoma Investment Properties (The Virtual Real Estate Team) 7 months ago

Joe: Sounds to me like you must be paying them a fortune! The only agents whom I have found to be happy with Zillow are those who have fallen into the thrall of the this company and pay, pay, pay (give, give, give) until it finally catches up to them. Your slip of the tongue, where you say "giver" instead of give lets me know that on a subconsious level you do see the light!! All humor aside, thank you for taking the time to read and comment here!

Posted by Paula Hathaway, REALTOR, Sr. LBA,, ...Finding Your Place In The sun! (Douglas Elliman Real Estate) 7 months ago

                 

                    Thank you Paula Hathaway, REALTOR, Sr. LBA, 

Posted by Kathy Streib, Home Stager - Palm Beach County,FL -561-914-6224 (Room Service Home Staging) 7 months ago

Kathy: Thank you so much for the vote of confidence!...and for the recognition that I know comes from your Weekly Post!!!

Posted by Paula Hathaway, REALTOR, Sr. LBA,, ...Finding Your Place In The sun! (Douglas Elliman Real Estate) 7 months ago

Paula Hathaway, REALTOR, Sr. LBA, I am pleased Kathy Streib selected your blog post today for republishing. It says what many feel, yet are without the courage to write.

Posted by Sandy Padula and Norm Padula, JD, GRI NMLS#1483386, Presence, Persistence & Perseverance (Realty One Group) 7 months ago

Zillow is really good, probably the best when it comes to Technology. But when it comes to the people side, their focus is not on building rapport, building trust, or referral business - it's not even honest. The algorithms are just numbers - they don't tell the whole story, especially for the local market. A computer can never replace a human being. It was wonderful Kathy Streib chose this one for the weekly feature. You did a great job! 

Posted by Patricia Feager, Selling Homes Changing Lives (DFW FINE PROPERTIES) 7 months ago

Great post!  I can see why Kathy chose to highlight it this week!

Posted by Kristin Johnston - REALTOR®, Giving Back With Each Home Sold! (RE/MAX Realty Center ) 7 months ago

Kristin: Thanks--I'm so happy she did that because if there is a story that needs to get out there it is this one!!

Posted by Paula Hathaway, REALTOR, Sr. LBA,, ...Finding Your Place In The sun! (Douglas Elliman Real Estate) 7 months ago

Good morning Paula. It is a bribery scenario and I hate that. There are always folks who prefer human contact and accuracy.

Posted by Sheila Anderson, The Real Estate Whisperer Who Listens 732-715-1133 (Referral Group Incorporated) 7 months ago

Good morning Paula, as long as there are agents supporting Z, T & R and some others, they will continue to do well. I had been talking to a FSBO for some time, his house is not listed in Zillow. Those who decide to sell/buy without a professional are asking for trouble. 

Posted by Beth Atalay, Cam Realty of Clermont FL (Cam Realty and Property Management) 7 months ago

Sheila: I agree--but the problem is the individual who goes after leads in this manner will never be able to see the real issue--they do not have the vision it takes to see the end result. They only think about now and what they perceive as an easy way to get business wihout undestanding that it is eroding our (all agents) reputations even further for the buying public!

Posted by Paula Hathaway, REALTOR, Sr. LBA,, ...Finding Your Place In The sun! (Douglas Elliman Real Estate) 7 months ago

Beth: This is true---just a few really bad scenarios will create the biggest problems for all of us...There is a reason that the government saw fit to require licensing on the part of all who participate in the, listing and selling of real property! I shudder to think of what the brokerage business will look like in the next few years if we don't get our act together and make demands of the powers that be to recognize what we have seen coming for a decade now! I don't know what form regulations will take but the idea that these large "entities" have insinuated themselves between the states licensing requirements and the buying/selling  public is a high crime and requires immediate attention...IMHO.

Posted by Paula Hathaway, REALTOR, Sr. LBA,, ...Finding Your Place In The sun! (Douglas Elliman Real Estate) 7 months ago

Here is the latest STOP ZILLOW petition that is quickly gaining ground with over 15K signatures as of today.  https://stopzillow.com/

Posted by Darin and Mary Waldeck, Exceeding Expectations! (SunState Realty) 6 months ago

Hi Darin and Mary--Thanks so much for the link...This is so important and I have already sent it out o to all my offices here in the Hamptons..We will see if they take it seriously enough to sign....I have signed and one other agent whom I know has as well...

Posted by Paula Hathaway, REALTOR, Sr. LBA,, ...Finding Your Place In The sun! (Douglas Elliman Real Estate) 6 months ago

When the industry gets transformed, not all Realtors will survive the cut. Nothing lasts forever, and Realtors need to be realists. If not Zillow, then another disrupter will arrive. Seek to understand the coming changes and adjust accordingly. 

Posted by Dave Halpern, Louisville Short Sale Expert (Keller Williams Realty Louisville East (502) 664-7827) 6 months ago

Re-blogged I have signed the petition as well. Thank you for the post.

www.StopZillow.com  

Posted by Brandon Jordan (ERA American Real Estate) 5 months ago

Hi Brandon!

Thanks for signing the petition...i don't know how much it is going to help. I just discovered that Zillow now owns Streeteasy, HREO and RealNet, all of the listing companies that we use here in the Hamptons and Manhattan....We are now absorbed into the giant and have no choice as to whom we can use to  list the porperties that we have diligently pitched and that we spend money on to advertise, do open houses etc....a huge expense! Now Zillow owns ALL the content that we have gathered and they are charging all of us for the use of our own content and the websites that are the avenue to be used by the public to contact us----they own us lock stock and barrel! The other day all of the systems went down and we had nothing for over 24 hours---very scary indeed. 

Posted by Paula Hathaway, REALTOR, Sr. LBA,, ...Finding Your Place In The sun! (Douglas Elliman Real Estate) 5 months ago

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