Editor’s note: This contributed story does not reflect the views or opinions of Inman staff. Zillow Group has responded and noted that the quality and number of listings has improved since the ListHub agreement ended.
Scraped websites? Stolen contact databases? Unfair competition and corporate whistleblowers? This latest chapter in the Zillow/Move saga is basically drama — the industry’s version of a soap opera, if you will. Some folks are following the story closely, but most agents now are ready to move on. It wouldn’t be worth writing about except that it affects you, the individual practitioner — and that’s the focus of our business.
The bottom line is that if you’re still buying leads from Zillow, you might experience a dramatic decrease in business.
Here’s what could happen as a result of this: Zillow will raise prices in many markets to make up for the loss in buyer lead revenue, and at the same time will be losing listings in key markets around the country, which means that agents will no longer receive the volume of buyer leads that they’ve expected from Zillow in the past. Agents who work on improving their lead conversion skills might be able to make up a bit of a drop in overall lead volume. But for a lot of agents, this might ultimately force a big change in how they acquire new business.
Radio episode: Whistleblower says Zillow’s stealing listing data
Now, if buying leads works for you and you plan to continue with it, then you need to realize that this change means that realtor.com will probably be the largest, most comprehensive source of listing data online. The same is true for any other portals still subscribing to the ListHub feed. Zillow coverage will likely be “spotty,” with significant coverage in some areas and not in others, but if your territory is spotty, then this might prompt a switch to one of the other portals.
For agents who remain with Zillow — such as the close to 100,000 agents in Zillow contracts spending an average of about $435 a month on leads — a significant drop in lead quality can be expected. Why? Well, because Zillow needs to keep its traffic levels up, so it’s likely that it’ll supplement falling buyer traffic with traffic from topic stories, such as celebrity housing and whatnot. That kind of visitor traffic also generates leads, but certainly not the kind of motivated leads that agents want — which means that you’ll see a drop in lead quality.
The truth, however, is that online lead quality has already dropped precipitously over the past year. Buying leads is easy, which has created a competitive market for leads and has led these online lead-selling portals to try to generate as many as possible to keep up with demand. However, there are only a certain number of online, Internet buyers out there — which means that as more agents require more leads, we will see more “junk” leads being generated and sold as a result. This trend isn’t limited to Zillow or Trulia — it’s been industrywide.
What this ultimately means for you, the individual practitioner, is that you can’t just rely on any of these large, monolithic organizations that promise you and every other agent who comes along a steady stream of leads. Instead, focus on developing the practical skills to self-generate leads. For instance, if you start listing homes rather than just working with buyers, you’re likely to generate tons of buyer leads as a result — all free, motivated and without a contract.
Many agents feel a bit of fear and trepidation about taking listings, but they push through it, and the vast majority of them are overjoyed when they master their listing skills. Rather than paying a listing portal money to basically avoid developing this skill set, get motivated, start taking listings. Then review whether buying leads makes sense in your business from a position of strength rather than desperation.
This story has been updated.
Tim and Julie Harris have over 20 years’ experience in real estate. Learn more about their real estate coaching and training programs at timandjulieharris.com, or tune in to Real Estate Coaching Radio every weekday at realestatecoachingradio.com.