I’ve been a Zillow premier agents for a few years and even sat on the panel of agents at the first Zillow summit. This year I will not be renewing my premier status.
Zillow’s interests are at odds with those of the real estate agents providing their revenue. For a premier agent, a pipeline of mediocre leads does not translate into more deals closed, but it does mean increased revenue for Zillow. Their business model is about getting agents signed up and providing a high volume of leads. As the quality of leads has dropped, premier status has lost all value to me.
I’m not an agent who is doom and gloom about the internet, Zillow, or Redfin. The internet and technology have been great for the productivity and transparency of the real estate industry. However, agents need to recognize that as Zillow continues to mature as a public traded company, they will have to constantly increase revenue, and the only way to accomplish this is to increase the number of agents paying to be on the site.
There are only so many buyers and sellers at any given time, and if Zillow provides too many leads to a particular agent, those are leads they can’t sell to another agent. Zillow is not designed to refer leads to a small number of agents.
For me, one of the greatest values of the Zillow premier status was being the sole agent on my own listings. I had 100% chance of getting all the leads on my own listings. While those leads never ended up buying the listing, it gave me an opportunity to show value that others didn’t have; I had a listing that matched their search criteria and I was able to convert them on another property.
Zillow’s model of displaying premier agents on their own listing leads wasn’t sustainable. If all the best listing agents are Zillow premier, then there wouldn’t be quality properties for agents buying zip code leads. Zillow’s solution was to limit the number of “featured” properties in which a Premier agent could be the sole agent. Premier agents have two choices for their “featured” property: they can choose to be on their newest listing or pick a listing based on price. But what happens when my highest price property is pending? I can’t choose to be on the second-highest priced property, and that means 30 days of paying for Premier and not being in front of buyers.
Zillow owns the website, the platform, the ads, and they’re free to do as they wish. But as an agent contemplating a year-long contract extension, it’s important to consider what changes they might make. You’re only buying ad impressions, nothing more. As we’ve seen with Featured Listings and Agentfolio, perks can disappear at any time. The Zillow Impressions package was revised to include impressions on Trulia, even if you don’t want to spend your money on Trulia. Zillow is changing how they calculate impressions, and nothing prevents them from switching from 4 agents on a property to 5 agents.
I’m ready to move on to the next thing. Zillow works okay for now, but if it’s so great, why do I get multiple sales calls a week touting, “A great zip code just opened up!” Why would an agent give up great zip codes if they were getting good business there? Remember when Myspace was the place to be? I don’t want to be the last one left, swapping messages with Tom.