How Zillow sells your information.

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As a realtor I often wonder why Zillow is so popular by non-realtors or shall we say consumers? My gut feeling is it allows for anonymity, but does it? Please read on if you’re interested in what Zillow is really about and how it works.

To answer these questions I have to go undercover and act like a consumer. I go into Zillow using chrome’s incognito option. Actually I often mess around with Zillow. It is a unique source for finding For Sale by Owner properties and I’m also amused by the “Make me Move” feature, which generally has owners listing their homes for exorbitant amounts of money. Interesting side note 2 of the FSBO’s that I look at are actually Realtors selling their own properties. Hmmm? As a consumer Zillow’s website is very user friendly, it’s pretty clean/minimal and easy to navigate. I do like that you can use a map to search properties, I’m a map guy though. What else is compelling about Zillow? The Zestimate? I plug in my own address to see how I’m doing. Uh oh still underwater from what I paid back in 2006. It’s actually pretty close even though its just an algorithm. I mess around a little more, I check out the “Home Design” tab which is basically their version of Pinterest or Houzz. I check out the blog “Zillow Porchlight” and I get sucked into an article. Well from a consumer perspective Zillow is fun and informative. Oh yeah and I almost forgot almost every page has a bunch of pics of realtors I can contact to get more information.

Ok I’m done playing the consumer/website experience role let’s really look at what’s all the fuss with Zillow. First off let’s Google “Who owns Zillow?” Wikipedia looks like the best source of information in this instance. Two former Microsoft executives that appear to be filthy rich. The first thing that strikes me on the wikipedia page is under Business Model:

”Zillow has stated that it is a media company that generates revenue by selling advertising on its web site.”

That’s interesting and that makes sense, they’re a media company and what do media companies do, they sell advertising. How do they sell advertising? By collecting information that they then sell. Who is buying this information? Realtors.

We’re you wondering how Zillow sells your information to Realtors. Zillow sells Realtors on being a “Premier Agent”. What does that mean? Are they like the best Realtors? The most knowledgeable? The best reviews? Not necessarily. To become a Premier agent you have to fork over bucks. All you need is a Real Estate license, a heartbeat and bucks and you could become a “Premier Agent”.  you might not need a hearbeat actually, read on. To become a Premier Agent you pay for a zip code, depending on how much you pay determines how much you pop up when somebody clicks a listing. I’m sure you all have seen on the right side generally 3 agent’s pop up on each listing. You can hit refresh and you might get a whole new selection of beautiful faces. Ok got it? Now let’s take an example zip code, I’ve talked to Zillow and looked into what it costs to be the “Premier Agent”.

For 98335 to have 45% market share (45% of the time your face pops up) it will cost you $2500 a month. Zillow says that you could expect 18 leads a month and if you use the national Zillow average of converting 4% of those leads and then use the median home value for that zip you could expect a return on your investment of $46800 over a 6 month period. For a measly $15,000 you could become top dog and net $31,800, not bad.

Why am I telling you this, well I think it’s important to understand how things work. In my research I also discovered that often an entire Brokerage (no heartbeat) is investing in zip codes and they get the call or email (lead) and then refer it out to an actual agent (heartbeat) that knows about the actual home. For instance I have a listing out on the Hood Canal in zip code 98588, probably not the most coveted or expensive zip code out there. A couple weeks back I received multiple calls/emails from a Realtor in Nevada who said they had a client who was interested in my listing. They asked me if I would contact their client and answer any of their questions and that they only required a 25% referral fee if I were to sell them the property.  A week later I get another email from the same agent saying they had another client interested. I thought that was weird, how is an agent in Nevada getting so many people interested in my listing? I called the number they gave me for the contact and after chatting with him for a while, he mentioned that he clicked on a button on Zillow that said “contact agent”, he filled out the info (Name, # and email).


He was contacted by someone and he realized right away that the lady that answered the phone had no idea about anything concerning the property. Things started making since to me once I heard this. I went incognito and I plugged in the zip code out on the Canal and sure enough up pops a brokerage based out of Nevada. There’s a picture of a guy who’s probably a model.  I’ll admit this bugs me. Basically I’m guessing that this zip costs very little to become a Premier Agent in and brokerages are buying up these low cost zips and trying to hand out referrals and collect 25%. Genius? Maybe for them, but I don’t see how this benefits the consumer.

If you made it this far congratulations. What is my point, why did I write this, to bash Zillow? Not really I just don’t like being duped, there’s some holes in how Zillow works and Zillow is duping people. Zillow invests a lot into their website but is it about the consumer?  They are about advertising, collecting personal information and selling that information. They are as Wikipedia states a “Media Company”.

Final thoughts if you’re using Zillow and you want worthwhile information click the listing agent of a property, make sure you click the box next to the agent or you could contact me. 😉 Note: if you do not check one of the boxes beside an agent it goes to a Premier Agent.

I think that people like Zillow because they think they can use it anonymously and that they have control over how they get information. Is that true? The website itself is pretty user friendly, but ultimately Zillow is trying to get your information plain and simple.

In all honesty real estate transactions are about relationships and you should work with somebody you either know, like or trust and that decision should be up to you. If nobody fits that bill for you then do some research pick 3 Realtors and interview them and find the right fit.

Thank you for reading.



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