At The Jenn Smira Team, two values central to our mission are transparency and knowledge. For that reason, we feel a responsibility to keep our clients and readers informed on the latest industry trends and happenings — particularly when they impact the people at the heart of our work. One of the happenings we can’t wait to clue you in on? Our team’s collective decision to cancel Zillow. Keep reading for Senior Vice President Marc Ross’ take on this bold move — and why other agents should consider making it, too.

A Bit of Background

In 2012, I ventured into real estate as Jenn’s first agent. As such, she made it her mission to train me on the ins and outs of the industry, and at that time, Zillow played a valuable role. Since I was building my own business from the ground up, Jenn advertised consistently on Zillow and routed inbound “leads” my way to generate traction. Back then, Zillow was a great partner for agents.

Agents could advertise in specific zip codes to potential buyers, and prospective buyers/sellers could reach out directly via email in response through the agent profile or attached listing. The platform was thriving, and during my first year in business, I helped numerous buyers and sellers find the home of their dreams, generating about 10 million in sales along the way. In fact, some of my trusted clients and friends today are the result of that 2012 advertising push! These clients — and their referrals — formed the foundation for my growing business, and I’m eternally grateful for the opportunity to connect with them, one that I would never have had if not for Zillow.

The Shift

They say all good things must come to an end, and in the case of Zillow, those glory days slowly (but surely) faded into the distance. So, let me catch you up on the changes they’ve made to their model in recent years. Unlike in 2012, Zillow is now single-mindedly focused on their “FLEX” program; on their way to becoming a brokerage of sorts.

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At The Jenn Smira Team, we believe in providing world-class service backed by amazing results for our clients. You can learn more about our real estate services here:

• Services for Sellers
• Services for Buyers

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Here’s How It Works

Zillow connects the buyer or seller with an agent via email or over the phone. The goal is, of course, to secure an appointment at a property or in the office with the potential client. After that, the agent takes over completely, hustling every day (as we do) to find clients the right home or sell for the best price. So far so good, right? The problem comes in at settlement, during which Zillow functions as a referral partner and demands 35% of the commission in return.

Yep — you read that right. Zillow is now taking 35% of an agent’s commission simply for providing a platform on which clients can search and make valuable connections. It’s egregious — and clients are the ones ultimately paying the price.

Why? Because agents still relying on Zillow for business have to sell more homes (and work with more buyers) just to make the same amount of money they were once taking home. Of course, this isn’t a sustainable income model, so unsurprisingly, more and more agents are becoming what we call “transactional” — meaning only focused on the bottom line (and # of transactions conducted) instead of building relationships.

Our clients mean the world to us, and the relationships we have built over the years are irreplaceable. Read some of our client testimonials here to see what people have to say about working with us.

Unfortunately, this has become a profitable model for Zillow, and they’re now expanding its application to markets across the US vs their old model of buying zip codes and impressions. Agents can technically still buy market share of a zip code under the Zillow Premier Agent program today, but Zillow has increased the cost per lead (at least in our market) to astronomical prices.

In a nutshell, under the Zillow Premier Agent program, a live connection over the phone with a buyer or seller costs around $1,000+ depending upon the zip code. $1,000 for a phone call!

This steep increase is pushing agents out of the Zillow Premier Agent program and into FLEX, which seems to be the trending direction where the company is headed. To maintain appearances, Zillow likes to paint a picture that half of all leads go to the FLEX program and half to Zillow Premier Agent program, but based upon the 15 years of data we’ve collected to date, it’s clear that FLEX is the future of the company’s business model. And while we can’t control the moves they make, we can certainly control our response to them. That’s why we finally said enough — enough subsidizing FLEX for Zillow, that is — and instead decided to focus on the backbone of our business: people.

The truth is, 80% of our business is referral-based to begin with, a fact which speaks to the trust clients place in us and the driving force of human connection.

Where does the other 20% come from, then? Print and online marketing. To that end, we’ve actually discovered that driving organic traffic to our brand has been more rewarding than Zillow over the past couple years, with our website alone bringing in more business. The reason? By engaging with organic, authentic content, potential clients get to meet our team and see first-hand what we’re really about — rather than interacting with yet another salesperson on Zillow.

At the end of the day, we’ve chosen to forgo outdated ways of doing business and instead double down on our mission to provide thoughtful, meaningful, full-service real estate — not only to deliver the best result, but to create the best experience along the way. Why? Because we believe that sometimes, a big leap means more long term benefits for both our team and the clients we advise. And because being true to ourselves is the biggest differentiator we can offer to set ourselves apart.

Still weighing the pros and cons of Zillow? I’ll leave you with this final thought:

In today’s fast-paced landscape, 20% of inventory is exclusively accessible off-market.

In other words: If you’re a buyer searching on Zillow, you’re missing the market. For sellers, on the other hand, sure — your listing will still be searchable, but at what cost? Since they no longer link back to the listing agent, Zillow is removing any level of control you have over your property’s representation in front of potential buyers.

The bottom line? The world of real estate may be changing, but the client-agent relationship will always be paramount — and we’re doing everything in our power to protect it. Whether you’re a consumer trying to navigate a changing market or an agent looking for answers, we encourage you to be deliberate about the platforms you subscribe to and engage with. And if you end up coming to a similar conclusion? We hope you, too, will vote with your phone and take matters into your own hands.

If you’d like to learn more about our services you can book a consultation with us right here. We’re always happy to help!