News April 13, 2018

Get Off My Transaction! What Zillow’s Latest House-flipping Announcement Means for Brokers

By York Baur, CEO of MoxiWorks

Zillow instant offers blog header image

Zillow Group, Inc. (NASDAQ: Z) (NASDAQ: ZG) announced they’re expanding Zillow Instant Offers to compete directly with OpenDoor and other Instant Offers companies – and that for the first time, Zillow itself will be buying homes from consumers and reselling them.

So, what does this mean for brokers? Two ways to look at it:

  1. So much for “we sell ads, not houses” as Spencer Rascoff has repeated ad nauseum over the years. That’s right up there with “I’m from the government and I’m here to help.” Zillow of course has every right to direct their business as they choose, but this is proof that they couldn’t care less about their relationship with brokerages. Look at the revolving door nature of the staff working with brokers as further evidence (remember Chris Crocker and Nick Bailey as the most recent examples?).
  2. Wake up call. I attended the Swanepoel T3 Summit in Miami this week and the theme was resoundingly that if you don’t make change happen, then change happens to you. I’d rather be the one making it happen, and I think that the brokers that continue to thrive will be the ones that disrupt themselves, not wait around to get disrupted

The Power Stays with Spheres

After you’re done absorbing this news though, remember that you have one of the most valuable assets any business can possess: relationships. Those with your agents, and critically their relationships with the consumers in their spheres of influence – their “databases” as many call them. Those relationships are the most difficult things to come by, and while we are all trying to make a home sale transaction happen, we don’t operate a transactional business – we’re in the people, the relationship business.

Channeling Michael Scarafile from a panel session at T3: when you cut your finger, you go to the urgent care clinic and you don’t really care who the doctor is. But if you have a heart problem, you go see you trusted family doctor. Selling or buying a house isn’t buying the latest gadget off Amazon, it’s one of the most emotionally and financially important things that most consumers do.

Here’s the best part: each of your agents already know hundreds of people, and one out of ten will either buy or sell a home this year. For example, the 100,000+ agents on the Moxi Cloud have an average of 470 consumers in their spheres of influence. That means each have more than 40 that will transact this year, not including the impact of referrals. All they have to do is stay in touch with those people and serve as a trusted advisor, and none of the Zillow, Opendoor, Redfin, Purplebricks blah blah blah will matter, because your agents are the ones they’ll trust to guide them through their transaction.

Presence is powerful. Windermere, Long and Foster, and Howard Hanna (all of whom subscribe to the philosophy that agents’ spheres are the best source of business) collectively did more transactions last year than all the closings generated by leads from Zillow. Think about that. How did these A-list brokerages pull this off? Many reasons. But one key factor is that they have systems that allow their agents to organize, store, market to, and advise the consumers in their spheres of influence.

You can too. You can put up a mote around your relationships that will prove to be impenetrable by the disruptors. But you have to get on with it, because it’s too late to build a mote once the invaders are inside your castle. It starts with getting your brokerage, agent, and consumer data in one place. Pick an open platform, get the data in there, and choose from the many quality technology tools that provide sphere management and marketing automation. Then be relentless about getting your agents to use them and hone their ability to serve as a trusted advisor. Sound too simple? It isn’t. It works. We have the data from our 60 brokerage clients and 100,000+ agents to prove it.

Unlike the government, we’re Moxi, and we actually are here to help. Let us know if we can help you and your brokerage.