Zillow is now rolling out “Instant Offers” (https://www.zillow.com/instant-offers/) where Buyers “verified investors” actually can make offers on houses directly to homeowners. Should real estate agents be panicking? Not yet. Here’s why..
In the short term, it appears “instant offers” is primarily for sellers who want to sell there house fast for cash without doing anything to their house (i.e. Investor offers). This would appear to mean sales that will be below market. There are still a lot of unanswered questions of how this will work, but for agents who are skilled and know how to help sellers get top dollar for their homes there is little to worry about.
In the long-term, this is part of a disturbing trend of the power Zillow has in our industry, which they gained by getting access to our (Realtors’) listings through our MLS. Since the NAR essentially sold MLS access to Zillow, it has become a significant threat to the future of our industry. Unless REALTOR Associations on a large national scale are willing to refuse to continue to give Zillow access to our listings, Zillow’s power will continue to grow and the threat will expand.
Individual agents simply have to continue to get better at delivering better results for clients. If you do that, your ability to succeed in real estate is as great as ever.
Let’s talk about Zillow Instant Offers. Kevin Ward here with YesMasters Real Estate Success Training. It just came out, it was just announced this week, or it wasn’t announced, but actually they’re starting testing it in two markets, one in Florida and one in Las Vegas, with Zillow Instant Offers. Sell your home fast. Zillow Instant Offers. No prep. No waiting. No uncertainty. Competitive offers. How does it work, and should real estate agents be concerned about it?
The answer is, in the short term, no. Should real estate agents be concerned about it? Not at all. If you’re an amateur and you’re a mediocre agent and you’re always depending on somebody else to get you business and you’re playing it that way, you should always be concerned. Everything is a threat to your survival. I really look at real estate agents as you should be masters of your game. If you’re going to be a successful real estate agent, you should be great at what you do, so you should be great at finding motivated sellers and buyers, you should be great at representing them and delivering them the best results.
If you’re doing that, and you’re building the relationships and you’re prospecting and lead generation, and you’re generating leads and then you know how to convert those leads, and you know how to deliver the best results. And if it’s a seller, [you know] how to get their property sold for top dollar in the best amount of time with the least amount of hassle. My friend, you have nothing to worry about. If you are just trying to survive and you think that it’s just, “Ah, it’s just selling houses. I just got to get the word out” and all that kind of … If you’re an amateur, and I think it’s the way most real estate agents approach their business, then this could be a threat to you now. In the short term, I don’t think it’s a threat to really any agents at all.
I’m just going to break down what is in the Zillow Instant Offers. One, this is not typical buyers and sellers. It’s not going to appeal to them. I don’t know all the details because we can’t see all the details yet, but here’s basically what happens. I’m just reading from Zillow’s website. Receive multiple no obligation offers from investors based on your home details and comparative sales. You choose your closing date. You don’t have to stage your house or get it all ready, you don’t have to do anything. We’ll do a free ‘professional valuation’. What’s that? A Zestimate, which Zestimates are on average 7% to 10% off? That makes me feel secure if I’m a seller.
How it works. You share your home’s detail. You’re going to get multiple offers within two business days if your home qualifies. You can compare the offers you get with your free comparative market analysis. Once you pick an offer, we’ll help you get started with the verified investor. Then we’ll schedule your free home inspection. Home inspector will check your homes condition to make sure there are no surprises that could impact your offer, which means that inspection is really helping to protect the investor, not protect you. It’s not protecting the seller. Then you close on your schedule, accept the offer, and you’re on your way.
I don’t know exactly on the legal end, contracts, disclosure laws, all that. I don’t know how it’s going to work, but basically what we’re talking about here is somebody that is highly motivated as a seller that wants to get their house sold right away and is willing to take an investor offer, which is always going to be below market. Anytime a seller chooses to use the Instant Offer, unless there’s something that they’re not telling us, they’re basically going to be selling their home below market.
What you have to do as a real estate agent, you got to be prepared to educate sellers and protect them from this because in this, they have no one representing them that knows what in the world they are doing to help the seller get their home sold for top dollar in the best amount of time with the least amount of hassle. They’re taking the hassle out of it for you, and you’re going to sell it to an investor. You’re going to lose money. Just the reality if you’re a seller.
In the short term, I don’t think this is anything to be concerned about at all. Especially if you’re one of my coaching members, if you’re a master, a YesMaster, then you’ve got nothing to worry about on this because whenever a seller wants somebody that can deliver them the best results, it’s going to always be you.
Long term. Is there a concern I have with this long term? The answer to that is absolutely. I think Zillow is a great threat to the real estate agent industry because we, the real estate agent community, otherwise known as the National Association of Realtors, gave Zillow access to our multiple listing service. When we did that, we gave them the single most valuable asset that we have as realtors, and that is access to the homes on the market. Just in case you don’t know, as a realtor, as a licensed member of the Association of Realtors, the National Association of Realtors and your local Association of Realtors, you have exclusive access to the multiple listing service. You have to be a realtor to get stuff on there, to be able to access it and to use it, until our National Association decided to sell access to our listings to Zillow. I’m not sure exactly how that happened, I’m not sure why it happened, I just haven’t researched it, but I guess they thought Zillow would help us market.
What Zillow did was Zillow did a better job of marketing our own listings than we did, than the Association of Realtors did, and all of a sudden, Zillow gets more eyeballs, buyer interested buyers and sellers, looking at their website than we have looking at realtor.com before NAR sold it. Then Zillow said, “We got all the eyeballs. You want buyers and sellers? Come to us.” Now they take our listings, market our listings, and then charge us to get the buyers and sellers that come from our listings that we gave to them.
I think that is a great threat. I think it’s a great threat to our industry that we gave our proprietary information, which is access to all the listings, we have it away or sold it or whatever it is. We sold out to Zillow, and Zillow now owns the space of buyers and sellers and the conversation of buyers and sellers. Zillow has just become commonplace of where buyers and sellers, and realtors, go to look. I think that’s a threat. I don’t know what to do about it, but it’s a threat. I think this is something to stay on top of and watch.
For your business, if you are great at what you do and you are willing to go out and talk to people, build relationships and network, you’re going to be able to always have plenty of people that are looking for a great agent to represent them to deliver them the best results. You’re never going to have to worry. In reality, for you individually, your real estate business, is this going to affect you? Not if you’re committed to greatness. Not if you’re committed to being a great real estate agent and you’re willing to do the work to be great. Technology will always be your tool. It will not be your enemy. Even if things like this create challenges, it will not stop you from having the kind of success you want and the kind of results that you want because you’re a master. It’s your responsibility to be the best. When you do that, you can always expect yes.
I want to hear what your experiences are, your thoughts are. Make sure you like the video, give it a thumbs up, share it, and comment on it. More to come. We’ll be watching.