The world’s most visited property portal, Seattle-based Zillow, has revealed it will now be hiring its own fully employed agents from January, a revelation which has sent shockwaves through the very agencies it purports to serve.
Despite repeatedly saying over the last five years that it did not intend to go into the agency market, and into conflict with the majority of its clients, it’s now happened and agents are rightly fuming at this land grab into their businesses.
How long will it be before they take over the role of estate agents fully – and how long will it be before Rightmove and Zoopla follow suit?
Valued at $22bn (£16.6bn) and with 36 million unique monthly visits, Zillow is a phenomenon in the way it does business. It has a database of over 110 million U.S homes for rent, sale and not currently on the market.
Predictions they were going to buy EXP or Keller Williams or RE/MAX have been unfounded. Instead, they will be firmly rowing their own boat. With all those leads, they simply cannot fail and I can see them becoming the largest agent in America within 18 months if their recruitment policy is well run and they train and coach people to be the best in their markets.
I’ve heard there will be a multi-million-dollar push into every state in the USA. With basic salary estimated at $60,000 (£45.900), reports tell me that their full-time agents will be earning a six-figure sum – and in the hot cities like New York they’re expecting to be paying seven figures – a very appealing prospect for the self-employed franchisees to jump ship into the employed model.
How devastating would it be if Rightmove and Zoopla started to do the same thing, using all our stock to help them become our biggest competitor in the market overnight, as they could have the pick of the valuation leads? Is there a hidden agenda for the new kids on the block, Boomin’?
Trust is already broken between agents and Rightmove following their PR disaster going into lockdown and their failure to understand agents’ needs and requirements as we went through one of the toughest periods in living memory in estate agency. So why would we trust them now?
Will we see Zoopla and Rightmove For Sale boards throughout the UK? Zoopla might be the biggest threat to some agents as their operating systems are Zoopla-owned which means it could be a difficult decision to move away from them if they’ve moved into our space.
My suggestion is to ask your portal reps if they have any plans to go into agency? See what they say and please feel free to share.
Why would you trust the portals now and the big question I’ve got is what are they doing right now to help agents in Wales and those in Tier 3?
If ever there was a time to get behind OnTheMarket, it is now. My advice is don’t put all your eggs in one basket – or they might just crack.
Paul Smith is chief executive officer of Spicerhaart.
Comments (18)
What’s the difference between a traditional high street agent on a portal and a PSP?
Simple for all those agents in the know and why PSP’s cannot make it in the UK market. RM or Z could have done it before now but recognise why it would be so risky for them. Portals are nothing more then modern digital 24/7 multiple property advertising from paper printed newspaper with limited weekly property exposure.
But that is not estate agency in the UK service industry.
As for Boomin ……. you have been warned that a leopard never changes its spots. Are you lot crackers to even think of entertaining someone who derided agents, would be happy to see you disappear and sell you a story they are now your ally. What is to stop them turn into a Zillow later once you have built up their platform in the market? People should be asking themselves “Trust” “firm belief in the reliability, truth, or ability of someone or something” that needs you, when you don’t need them!
Late one Woodentop! If you want to get in touch I will explain- no sales pitch just an explanation of what PSP is and why PSP will change the dynamic.
If nothing more we can talk about toy aeroplanes!
(None of the people who contact me have their true identity exposed as several who are in regular contact will confirm)
Booming hell! Yes the very same people that formed PB well if you ever had an inkling into what their plan is you sure have now. Come on fellas agents looking for a way out from RM and backing a portal with a hidden agenda, NDA what’s that all about why not just come clean and show everyone what you’re all about. All these silly agents will never drop RM no matter what comes along, the only portal that you may be able to trust is OTM join up get share become part of an agent owned portal and forget about the rest.
Never trust an article written by a founder or shareholder in a shareholder driven portal.
Never trust a portal that promised to be a long term Mutual, and then de-mutualised after locking its members into five-year contracts.
Never trust a pseudo mutual that sues its members if they wish to leave.
And finally, never trust a portal owned and controlled to any degree by shareholders – £millions invested, means £millions taken out, plus £millions more by profiting from Agent’s data. That business is legally obliged to work in the best interests of its shareholders, not estate and letting agents.
If pressure groups would stop publicly backing the next shriekingly obvious IPO, or other AIM listed portals, maybe the challenger portals would not get drowned out by the flashiest newcomer who can shout the loudest, all claiming to be the next Rightmove.
After all, isn’t the point that we don’t want, need or trust another Rightmove, or another major investor owned portal waiting for the right opportunity to either float, disintermediate agents, or do a Zillow on the industry?
High Street is the wrong topic for discussion when it comes to agency and is rather a red herring.
A poor agent with a high street office is still a poor agent and moving them to their back bedroom will not make them a good one.
A well run high street business of any description becomes part of the community, it belong’s to the community and people will learn to trust it.
Off high street agents have to work harder to become part of that community as they lack daily visibility in their area.
It is true that PB and others have garnered support from the public, but it is also true it has cost them hundreds of millions that they are not likely to win back before they run out of money. Just look at the trail of failures. It is also true that they are having to lift their fees to the level of high street brands as they cannot survive or provide the service the public wants on their low fees as volumes fall away.
Local, niche, work from home agents can make an excellent living using technology to support them, as can hub model agents, serviced office agents and high street agents. The real issue is how do they use technology to raise their profile improve their offering and maintain it.
Technology cannot show somebody around a house, technology cannot put a house on sale (someone needs to be there to hold the camera and the measure), technology cannot persuade someone to stick with a sale or purchase when the stresses and strains become too much.
The portals need people, the portals need cash.
Agents of all sizes need to remember that they are the people that drive the industry and it is their cash that supports it.
Good people cost a lot of money, and that’s why the portals will not become agents, they’d rather take your money than invest in people.
The only reason bedroom agents close is because they get fed up of long hours and mental customers and have to give it up. ( luckily) . What is more concerning is the govt allow anyone to open up without any sales chasers etc. This is where the costs are. Which purpleshits dont tell their customers when they take their money upfront.
Love it, Don’t trust portals but do trust OTM!
I mean come on, i have lost count of the time OTM has shafted its members. At least Z & RM are honest about wanting to pull our pants down.
Don’t trust the author of this story who took the opportunity to make redundant hundreds of staff by text, email and conference call and close branches at the first opportunity when he could put spin on it as ‘Covid’
Disgrace of a man.
I wouldnt trust a portal not to do it…..
But portals are businesses …..one of the existing portals would only morph into Zillow when either they estimate they will make more money from the change in model or their existence is at risk.
Rightmove and Zoopla make money so maybe not at the moment.
OntheMarket is x% agent owned but Im not sure agents control it….so maybe…but I doubt theyd have the cash.
New participants like Boomin maybe as it will be really difficult to dislodge the 3 existing incumbents above them. (Note I havent signed an NDA to see what Boomin is)
Overall its the newbies with added agents tools that have a full picture of every uk property that I would be concerned with. They have a potential attraction to homebuyers that a plain portal with only partial stock doesnt have. But even then they probably wouldnt have local agents ….just for sale by owner ads.
This would be much harder to pull off in the U.K. We have a fifth of transactions compared with the US, which has over 5m each year, and the US market is vastly different to the U.K. market.
Let the portals compete. It’ll drive costs down and if one portal pulls a stunt and starts transacting directly with clients, with their own workforce, other remaining portals will work with agents to pull it down.
The US market is also customer-centric (or relationship), whereas the UK market is transaction-centric.
Don’t forget they charge significantly higher fees. Similar to NZ and Australia where cheap and direct models have failed.
One could argue they charge a fee that reflects the level of service and professionalism the customer expects and the consequences of falling short (particularly on the professionalism front) can have devastating consequences on their businesses. The US market is much more litigious and agents are right to be scared to cross the line.
It took 8 years to break the duopoly that was created when CMA allowed Zoopla to get hold of the DMGT portals. That should never of been allowed; 4 portals controlled by 2 companies meant it was obvious what would happen to subscriptions. [I predicted Rightmove ARPA would rise to over £1000 on the day the merger was first mentioned on EAT]
The reason ZPG frustrated OTM rather than worked with them was to maintain a beneficial 1-2. The one other portal rule was never going to work, all that managed to do was stifle any other competition from entering or already in the market such as INEA
With the duopoly broken competition can flourish and that’s why there were suddenly more challenger portals than could be counted or named. Several of those enthusiastic challengers are already focusing on other priorities.
Competition will challenge Rightmove; it is evident they’re trying to catch up with the main feature of #PSP, Zoopla and OTM are also working on innovations they have not bothered with before.
All this is good for agents who have become customers in the proper, to be respected, sense of the word. How agents interact with their service providers has been changed and every agency will fail or flourish according to how quickly it gets itself a coherent digital strategy.
I agree with both these comments here.
Also just from reading this article the author has no idea of how the US market operates, simply making comparisons and throwing a few numbers about doesn’t make you an expert. It is so intrinsically different to how it operates here, inter-agency agreements, MLS, commision splits, title companies etc.
I wish there was a better understanding of estate agency in a digital age. I wish there was a better confidence in the resilience of agency as a service industry. I wish people would listen rather than shout me down when I’m saying things that contradict their current understanding [only to find I was right] but most of all I wish I was better at explaining things to an industry audience where the language appropriate for a FRICS veteran is too verbose and highbrow for some of the industry.
When I resigned from GMGPS in 2009 it was because of a strategy that defied progress and success of the company. What I said would happen has happened for the reasons I told the board it would. Despite a lot of money being made in the past 11 years GMGPS (now ZPG) faces some real challenges that the migration of what was 3 CRM systems (which became 4 then 5) onto a single cloud platform is almost impossible. The challenge is now worse; the product that would have been awesome in 2011 [and is awesome for some of the users now] is already legacy before it’s awesome for all the diverse range of users and budget’s that exist. Alto will be challenged by the likes of Loop, 10Ninety, Apex27 and Street. When the duopoly was broken in March the complacent attitude of running comfortable No2 to Rightmove threw up a real ‘what now’ moment and they are fighting on both the CRM and portal front.
Rightmove can do as they please and although I don’t think its common knowledge have made a change recently that could be the start of a change in their attitude towards agents as customers. Their high handed attitude to the people who pay most of their profits and provide most of their listings has been their main failing. That’s an easy and quick fix. “Agents are our customers, treat them with respect or we won’t have them as customers for very much longer”
Because the duopoly is broken what used to be possible, now isn’t; where Rightmove didn’t have to innovate and didn’t innovate at the pace they should for fear of killing the profits, what Boomin are showing agents is showing Rightmove what they have to do. If tRM don’t react quickly to buy themselves the time to catch up, Boomin will kill their profits. They will take away the agents who cannot afford to be on Rightmove ( about 1/3rd of all agents on Rightmove have a register that doesn’t support their portal spend)
Can Rightmove and Zoopla follow the Zillow model? The simple answer is no, Launch A- (Purplebricks) is exactly that, self employed listers taking instructions and putting them on the portals- Launch A hasn’t worked, that’s why there’s Launch B. For all the reasons I’ve said in the past using #local to provide listings and working with the 99.4% of agents who have 95% of the stock has to be the way forward and that is what Boomin is all about. Once Rightmove understand that they will have to get much closer to agents.
I’m not going to make comment about On the Market, they have a portal and face the same challenge as Rightmove and Zoopla do; they’re a portal. Portals are being replaced by #PSPs ( property sales platform) Boomin is calling itself a portals but if it is run on the portal model it won’t work. Here is the hope for all agents and what has to happen so that Paul Smith is rightly concerned about doesn’t happen.
#PSP’s are different to portals- where portals aggregate all the agents and all the listings into one place for the consumer to see listings [the portal is the centre of the universe, a black hole with a massive gravitational pull] a property search platform has all of the listings from as many agents as want to join in but each agent and each listing is there in its own right. The connection between consumers and agents is much closer. #PSPs work more like traditional newspaper advertising where each agent has a space of their own rather than being just a long list of properties.
Traditional agency has shown how resilient it is; in the mid 80’s it faced down disruption from the banks building societies and insurance companies. Corporate agency never got beyond 20% market share and now corporate agency emulates independent agency [but enjoys economies of scale not available to independent agents]. Traditional agency has faced down disruption and proved #local service matters and is valuable.
In 2011 I told about 100 agents how agency could change its relationship with its portal suppliers, 9 years on its happening and the industry has to decide if it is dragging a Trojan horse through it’s gate or whether Michael Bruce is riding a Unicorn to the rescue.
Boomin is the logical evolution of property advertising and it is what GMGPS would have built had they listened to what they were told. How this all plays out now is down to how the portals react to a #PSP
We need a maximum word limit on this forum. ( see above)
Told everyone, knew everything and got everything right. That excludes hiding your light under a bushel! Yawn!!!
Funny!