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The real estate industry is reeling now that Zillow has (finally) rolled out their own national real estate brokerage. The question is, what happens next? Listen to todays show as Tim and Julie Harris drill down on the ‘Zillow Threat’.
What will probably happen next:
Podcast: Zillow “Brokerage’ Is Here, Now What? | Tim and Julie Harris
– Zillow could undercut the listing commission structure to get market share and there is basically nothing you can do. They are being aggressive on their ibuyer offers to gain market share for their ibuyer…..they are losing money per flip. Why wouldn’t they do that for the sake of gaining market share for RESALE non-ibuyer listings. Zillow claims they wont do this, but they will.
– This will mostly effect midsize brokerages.
– Big brokerages could choose not to participate in their local MLS (thus IDX) and start their own national portals. (eXp is doing this)
– Zillow could easily effect the entitlement of buyer agent commissions as an automatic seller expense. Meaning, buyer agents commissions will be paid by the seller overtly.
– Zillows Premier Agent program remains their most profitable sector. Expect the expense to participate to increase dramatically…35%+ referral fees etc. Do the math on a referral where you are paying that much. In some cases the fees will be 50%. Basically, making you an hourly employee of Zillow.
– Zillow has a MASSIVE market cap. $17billion. They have the ability to buy market share with seemingly no downside. Be clear, Z will BUY market share and the traditional industry is stuck BUILDING market share. Other ibuyers will be going public and also compete directly with us. YOU must choose your broker partner wisely.
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