Giant US property portal Zillow has launched an ‘instant offer’ service, by which home sellers can receive instant offers on their homes – cutting out estate agents.
Is the reward worth the risk?
Global proptech guru Mike Delprete makes no bones about it being the wrong move: Zillow may be killing the golden goose, but he thinks he knows why it’s done it.
“It wants to capitalise on the growing consumer demand for instant home offers, and sees it as a potential new revenue stream, whereby it can collect and monetise seller leads.”
He goes on: “Real estate websites around the globe have the same problem: a love-hate relationship with their biggest customers – real estate agents.
“The top sites are fighting a constant battle to extract more money from their customers through regular price rises and value-added services.
“On the other hand, real estate agents pay the sites for advertising, exposure and leads, because of the clear return on investment, but do so begrudgingly and with a sense of fear.
“Most agents are afraid of these sites gaining too much power, continually raising prices, and perhaps even replacing them with an online-only offering.
“So, while real estate sites are best positioned to disrupt the real estate industry by displacing agents, they’re also the least likely to do so, because agents are their biggest customers and source of revenue.”
There is no real equivalent within the main UK portal sites. The nearest, though not really comparable, is the TemptMe feature on Zoopla, which allows property owners to receive “tempt me” offers.
Yesterday a Zoopla spokesperson told EYE: “TemptMe is quite different from Zillow’s Instant Offers and simply allows home owners to set a magic number at which they would be prepared to consider selling.
“Any interested house hunter who sees a TemptMe Price and is interested is then put in touch with a local agent by us, so this feature has proven popular with both agents and consumers alike. We have over 50,000 properties on our website with TemptMe Prices.”
“Most agents are afraid of these sites gaining too much power, continually raising prices, and perhaps even replacing them with an online-only offering.”
Ms Renshaw you have correctly highlighted what is the nub of the matter, Estate Agents have supported RM & Z with the assumption they were there for us.
Have we paved the way for our own demise?
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If Realtors have any sense they will pull everything immediately from Zillow and go to Realtor.com.. nip it in the bud.
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Zoopla’s TemptMe feature is the thin end of a very thick wedge and agents should be extremely wary of what the future may hold.
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You beat me to this.
I would see Zoopla, with it’s multi-layered features and acquisition of most estate agency databases, jumping this way first.
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Yes Mark I believe your view that they would jump first is correct. They are streets ahead of RM in terms of broadening their income streams and they will be best placed to offer FSBO if and when the time comes. I don’t think OTM in its current form has a snowball’s chance of taking the No 2 slot and until an agent-owned portal does UK agency stands at some risk of being made involuntarily redundant.
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What about a mandatory real time data feed with its own user licence and instant alerts?
Suspect a combination of these two initiatives would fuel a rather large real time database of sellers and buyers?
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Writing’s on the wall everybody. What are you waiting for ? Jump ship and join OTM – before it’s too late ! 🙂
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There’s a lot of fear of portals becoming online agents. However as portals make millions in profit & online models seem good at losing millions is this really that likely?
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The trouble is that bad decisions can be made in the name of creating share holder value, especially when the profits and returns cease to grow. This idea has been put around by city broker Jeffries about Rightmove and of course, Countrywide are in the process of becoming hybrid with their retail principle business model, by offering a cheap on line service causing its share price to halve in 12 months on the back of plummeting profits.
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