Zillow Buys ShowingTime. Realtors Silent.
What is to stop Zillow from opening dotLoop and ShowingTime to consumers directly?
Crickets.
No one wanted to even discuss the possibility. Why?
Well the Realtor associations have scared brokers into silence. The Realtors point to Article 15 of their Code of Ethics. Let me quote it here:
REALTORS® shall not knowingly or recklessly make false or misleading statements about other real estate professionals, their businesses, or their business practices.
Does asking or speculating about a firm's possible future business model violate this article? And even if it does, should we care? Let's come back to this.
I am generally supportive of new business models in the real estate industry. As long as they are honest, bring them on. Because what this industry needs more than anything else is to be turned upside down and given a good shake.
Zillow currently allows homeowners to claim their property and then "list" it for sale on the Zillow website. What's to stop them from adding a button to the property page that says Schedule a Showing. Scheduled with whom? Well, it could be the listing broker of course. But it could just as easily be the homeowner.
With dotLoop, Zillow has a system for managing all the paperwork involved. So again speculating here, why couldn't Zillow develop a system for negotiation between the buyer and the seller? That is, under their Schedule Showing button, we might find another button: Make Offer. Again make offer to whom? And again, it could be the listing broker of course. But it could just as easily be the homeowner.
I included a whole chapter on how this could work in The Competent Broker.
Such a system would put the whole industry, as currently configured, at risk. And you know what? I'm all for it. Even in 2021, we have way too many six percenters and way too few everything else.
Is this the path that Zillow is taking? I have no idea. But I have been writing about the possibility for over ten years now. Zillow always denies it. Why? Well they make money selling both ads, and now with dotLoop and ShowingTime, services, to real estate brokers. We brokers are giving Zillow the gun that they will ultimately use to shoot us. Money. That is, we are the ones paying them. For now, Zillow's revenue comes almost entirely from the brokerage community.
But that is not all.
By refusing to talk about the possibilities and what Zillow may or may not be up to, we Realtors are giving Zillow cover to put this system in place. Right before our very eyes. And we have absolutely nothing to say about it.
The Code says shall not knowingly or recklessly make false or misleading statements. I'm not sure whether my speculations cross this line. But I can tell you that, in practice, Article 15 is used to shut down any discussion whatsoever.
And would not such a discussion be valuable? Let me ask a final question: Could it be that one reason our industry is so highly resistant to change is that we don't allow ourselves to openly discuss alternatives?
This is not a case of cognitive dissonance. I want Zillow to succeed whatever it's up to. I want a stronger, more competitive, and more consumer-friendly industry. I think Zillow has a role to play. Likewise Redfin, Opendoor, Move, and others. But I also want the rest of us to have a chance to succeed as well. We won't get that by sticking our heads in the sand.
The Realtor Code of Ethics? It's really a Code of Silence.
Well said Mr. Moore. Hiding behind a code doesn’t make a situation go away. I want everyone to prosper in this business. Open conversation and decisions based on ethics and integrity that is in the best interest of the consumers is needed not hiding under a rock.
ReplyDeleteThis post reminded me of a footnote in your book. I had to go find it:
ReplyDelete"But assuming they [Zillow] are not complete idiots, one does wonder if they can envision this sort of future. Again perhaps they simply do not want to alienate their current broker advertising clientele. But maybe they have a secret room in the basement where they are working on this. I certainly like to think so."
Looks like you were correct about that secret room in the basement.
Just look at Zillow's stock price. Since I wrote that, it has tripled. I don't think I am alone in speculating on what they are up to. That room in the basement is not so secret anymore.
DeleteZillow's purchase ofShowingtime in my opoinion is just a small step towards another big change. We are small potatoes when it comes to Zillow and every Realtor should be worried about this sale. We all know the website is not kep current - FSBO, sold properties are advertised as on the market when they are not for sale, etc. etc. I believe in free speech...Amendment #1 has not been cancelled YET.
ReplyDeleteMariette - I personally think that Article 15 is a spurious ethical standard. But that’s not to say that there can be no legitimate uses for it. For examples, see the case interpretations on the NAR website.
DeleteBut that is not the real problem. The real problem is Realtors point to Article 15 and shout: We cannot talk about that!
And so we don’t.
Well, we can, even by the standard. And my argument here is that we should.