Key Highlights
- First, Zillow was an advertising platform, then a media company, then an appraisal service with Zestimates and then an acquistor of high-profile real estate sites and brands and then a mortgage lending provider and then a buyer and seller of houses as an iBuying company and now…
- Zillow is a brokerage business EXCEPT, according to Steve Murray, the founder of the research firm Real Trends, “the only thing they’re not doing is opening a lot of bricks and mortar shops…” while Zillow gathers some 25 brokerage licenses around the country.
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Zillow is currently pursuing brokerage licenses in 25 states. With already great results in test markets such as Colorado and Arizona, researcher Thomas Champion commented, “We are seeing Zillow evolving from its legacy advertising roots into a national real estate transaction platform.”
That said, one of the company’s spokespersons, Viet Shelton, commented, “Even though we aren’t operating as a classic, traditional brokerage, we will be performing activity for which many states require a license…but, it’s not what you think.”
Zillow obtained its first brokerage license in Arizona in 2018. As of February 3, 2020 Zillow obtained a pending license in Florida. The company is also taking action to obtain a brokerage license in New York in order to “…have deeper conversations with consumers…” according to Doug Perlson who was hired in September 20320 as the vice president of real estate strategic operations with Zillow’s NYC platform StreetEasy. Perlson was the founder and CEO of RealDirect, an online residential brokerage and listing consultant, before coming to StreetEasy. In the meanwhile, Zillow also acquired RealDirect’s back-end agent roots and direct mail marketing business.
Mike Del Prete, a real estate tech wizard and iBuying scholar-in-residence at the University of Colorado said that Zillow’s pivot to gathering brokerage licenses brings it closer to becoming a transactional business. “Over time, whether through its iBuying Zillow Offers business or a shift to a referral model, Zillow is moving in the direction of (a brokerage business.)”
Tom White, an analyst with DA Davidson and Company, said, “Different states have different regulations and Zillow may need those licenses in certain states to comply with regulations.” But Richard Goodman, the president of Halstead Realty, believes Zillow’s licensing push may represent a new revenue stream, not an operational stream. “They may be in the referral business, but they’re not in the brokerage business.”
Obviously, Zillow prefers Goodman’s opinion despite generating leads for a fee. One brokerage CEO who insisted on anonymity disagreed. He told the RealDeal, “If they (Zillow) are analogizing this to a referral fee, then it is a further instance of them Zillow) taking the law into their own hands.”
Thanks to The RealDeal’s E.B. Solomon and Erin Hudson for source data and material.
Also read: Podcast: How To Choose A Broker | Is It Time To Ditch Your Broker?, Nearly 50% of Homes Sold to iBuyers Living in 4 Markets, Multi-Family Markets Targeted for Supply Hikes
