How Zillow’s new plans will disrupt the Realtor industry
Many industries have seen significant disruptors, forever changing the model of business. Uber and Lyft broke open the taxi model, allowing individuals to earn money in their spare time. When was the last time you called a cab? Air B&B broke open the hotel and resort industry. The Real Estate market has been relatively insulated until now.
Zillow announced earlier this week that they will begin offering the ability, not only for homeowners to directly sell their properties through their Make Me Move option, but now they’ll also allow home buyers to purchase directly online, through Instant Offers.
How will this likely impact the Real Estate Industry?
For decades, the model has been that Realtors were the keeper of the knowledge. Realtor.com, then owned by the National Association of Realtors (NAR), broke this cycle when they opened up access to real-time MLS. The next break in the chain came about when NAR decided to allow other companies, like Zillow, Trulia, and even individual Realtors stream this information through IDX broker reciprocity in 2002.
Conglomerates like Zillow just got bigger and bigger, eventually gobbling up companies like Trulia. Even our favorite Real Estate blogging community, ActiveRain.com, became a casualty, becoming part of the Zillow family. While it still lives and thrives, the “family feeling” it used to have, is gone. This was the point when many began lamenting the end of Realtor services as we knew it. As it tends to happen, life goes on and everyone forgets about the big changes. Much like the story of boiling a frog, as long as you slowly turn up the temperature, the frog never notices.
The announcement this week, while feeling some grumblings in the real estate community, is just another turn of the proverbial temperature dial. Surely, this frog is enjoying a pretty nice warm sauna at this point, not even realize that it’s about to be dinner.
What does this change mean to the home staging industry?
While we never know exactly what changes will happen when an impact of this magnitude hits our adjacent industry, there are a few things we can be sure of. The first and foremost is that with more homes potentially being bought and sold online, APPEARANCE IS EVERYTHING. Realtors who don’t embrace home staging and professional photography will be the first to feel the impact. They are dinosaurs awaiting extinction. Their frog is already swimming in 100 degree plus water. Just another change or two on the dial and they are done. Their frog is cooked.
Homes are already, in effect, bought and sold by the photos online. If photos shown online, through the many reciprocity sites don’t look spectacular, then showings are slow or non-existent. Price reductions are the next step for these dinosaur agents. Savvy agents understand that staging is the first step in helping a homeowner maximize their equity. Homes staged prior to listing spend 90% less time on the market. (RESA survey)
When potential buyers shop online, and they all do, they are bombarded with imagery of beautifully adorned homes. Simply check instagram, Houzz, or Pinterest, to see what’s trending in Real Estate. Home staging is making it’s way into the very fabric of the industry. With major disruptions like the Zillow news, our industry is about to take off, however, much like the dinosaurs of the Real Estate Industry, you can expect that only those ready to accept the revolution & evolution in staging will survive.
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Peggy Ryan Marchese says
Great article Melissa!
Peggy Ryan Marchese
You are very welcome Peggy! Thanks for reading and commenting.
Lucien Vaillancourt says
This article does not take into account that REALTOR’s do much more than open doors for home shoppers. No computer model will ever be able to replace a living breathing experienced REALTOR and the invaluable service they provide to home seller’s and buyers. And how do these homes displayed online get there? The truth is that Zillow owes its very existence to REALTOR’s who list the homes that Zillow then displays on their website. By the same token I would say that home stager’s get much of their business referred to them from REALTOR’s as well. This brings to mind an ancient Chinese proverb, “don’t bite the hand that feeds you”.
A buyer is not likely to purchase a home based solely on pictures they see online. The few that do are most likely located far from the home and simply unable to physically walk the home. Needless to say that represents an insignificant number of buyers which poses no threat to the “dinosaurs” still providing personalized service to their clients and customers.
One last thing. If Zillow’s Instant Offer and Make Me Move services are anything like their home valuation models then the “dinosaurs” will look even better.
Lucien – I am in complete agreement that many Realtors provide a lot of value for their services. There are also many who don’t. What matters is the perception of potential customers. If home buyers don’t believe that there is a value, then they’ll simply put in the offer and negotiate it online and pay for it with Quicken Loans.
Bernadette Flaim says
Melissa, thanks very much for this . . . it continues to be a challenge getting realtors to understand the value of staging and professional photos — perhaps this dramatic change to the industry will get them to finally accept and utilize this critical part of marketing and selling homes . . . but will it be too little too late?
I hope not Bernadette! I think that there are some really inspiring YOUNG Realtors who seem to get it.
Bernadette Flaim says
Couldn’t agree more — they know that adding staging to their marketing mix really sets them apart from their competition.