Now that Zillow is a brokerage, should I buy leads From them? (This is game changing. Read this)
Whether you’re a new agent, a seasoned professional, or simply a homebuyer, you’ve probably head of Zillow. Zillow is a one stop shop for everything real estate. They feature listings, do virtual tours of homes, and offer educational about everything you need to know to buy or rent your next home. They also connect homebuyers and homeowners with local real estate professionals, including realtors, mortgage brokers, and more.
Zillow helps with the full lifecycle of owning and living in a home: buying, selling, renting, financing, remodeling and more. As of late 2022, their active database features more than 135 million homes. That’s more than 48% of real estate website traffic across the United States! What’s more, they operate the most popular suite of real estate mobile apps.
And now, Zillow is becoming a brokerage
As of January 2021, Zillow Homes has become the broker of record for many properties. They present an iBuying solution to streamline the process for homeowners. Salaried agents and homeowners work together through cash offers in areas such as Atlanta, Tucson, and Phoenix with the goal of expansion in the near future.
With these changes, how will the existing model for agents representing external brokerages pan out?
The Perks and Drawbacks of Zillow for Agents
In case you aren’t familiar, there are many benefits to using Zillow, which we’ll recap here.
Zillow gives potential homebuyers access to non-agent-represented properties and provides listing exposure to millions of consumers. The way it is set up visually promotes non-listing agents with listings that aren’t theirs. It may seem like the agent actually knows about the property. Often, the leads are low-quality for subscribing agents.
Despite its popularity, there are limitations to Zillow. Zillow has a property valuations tool called Zestimate. Unfortunately, it is often inaccurate as it estimates property values based on external factors such as average neighborhood home prices and property taxes. The real value of a property also factors in unique property features, such as any upgrades they may have done through renovations, the state of the home, etc. This can lead to confusion and make an agent’s job harder if they have to explain to buyers or sellers that their expectations were actually off by a significant amount.
For agents, there is a premier edition (Zillow Premier Agent), which allows agents to pay for more traffic to their listings. Premier Agents also have access to a WordPress website. The website allows agents to advertise their skills to a broad audience. The WordPress site (although helpful) does not integrate with MLS, which can be very frustrating. Overall, Zillow is costly for the subscribing agent.
Buying Leads from Zillow Brokerage
When you buy leads from Zillow, you are paying for impressions in a particular zip code. If your zip code is on the pricier side (determined by the cost of an average home), the cost per lead will be higher. And this is to say nothing of the competition you will face from other agents, also vying for the attention of the same leads.
Zillow recommends that you aim to generate 5,000 impressions on your ad each month. If done right, this should generate one to two leads for you. The average cost for this will be anywhere from $120-$350, again, depending on your location.
Sounds reasonable, if those leads lead to sales, right? Even on the higher end, a few hundred dollars is a low cost of doing business if your commission will be tens of thousands of dollars. However, that’s a big “if.” From our experience, the overwhelming majority of leads from sites like Zillow are people who are not looking for an agent. They use the site to browse listing, window shop, or query what their property is worth. When they are ready to buy or to sell, they contact someone they know and trust.
So, Zillow will help you get exposure if you pay them handsomely. But, that exposure is not likely to offer any returns. That is because Zillow as a brokerage does not help you build relationships.
Zillow Is Missing One Big Thing… Community
Zillow has a variety of benefits and is popular for a reason. But it is missing an important aspect of buying and selling a home: community.
By being an agent who supports and builds up your community, you will begin to build trust with community members. Look for a platform that puts community above all else.
Benefits of a Community-Minded Platform Like Parkbench
- Become a Local Leader: By claiming your area and following the plan, you represent more than just your business. You can build your sphere of influence and increase the number of referrals, as well as become an important figure in your community.
- Establish Trust With Your Community: The relationship between an agent and a client needs to be just that: a mutual relationship.
- Be the Top of Mind for Potential Buyers: By doing the work of building up your community, you will place yourself at the top of mind for buyers. You want to be the first one that people in your community think of when to buy or sell a property.
- Be Exclusive: Parkbench only works with one agent per area. When you claim your area, you become the only one who is able to use the platform.