Why Zillow thinks its model wins for consumers and agents alike 

As the heavyweight champion of real estate listing search sites, Zillow has held tight to its position as the most popular consumer portal. But it's Zillow's relationship with agents that competitors see as being vulnerable. And being at the top of the pack, all targets are locked on Zillow. 

How does Zillow think about agents? And what kind of value does the company provide to both consumers and industry professionals?

Errol Samuelson, chief industry development officer for Zillow, sat down with Real Estate News for an exclusive, in-depth interview to discuss the company's business strategy, "pro-consumer model," and evolving "super app." 

This is the first of a two-part series with Samuelson. Read part two here. (This interview has been edited for length and clarity.)

What is your response to the 'your listing, your lead' versus 'your listing, our lead' discussion we've heard from competitors — and how would you describe Zillow's model?

We've always believed in consumer choice. When a consumer comes to Zillow and they're looking at a listing, we give that consumer the option of contacting the listing agent, and we also give them the opportunity to find an agent who will be exclusively representing their interests. Again, we think it's important to give the consumer the choice of who they're going to contact versus automatically sending every inquiry to the listing agent.

And if you think about it, that's really the foundation of the whole U.S. industry and the notion of multiple listing services — the agents work with, represent and look out for the interests of their sellers. And then there's the rest of the MLS community, which is helping find buyers, bringing those buyers to the listings, helping those listings get sold, but also exclusively representing that buyer. Zillow actually is a reflection of the way the industry works in the United States. 

There's something else that I think is interesting in terms of the value that listing agents get from a site like Zillow. If you go back to the early 2000s, there's research which shows that listing agents were paying billions of dollars to advertise in newspapers or homes magazines. Zillow comes around and we give free exposure to the listing agents to an audience of 212 million consumers every month. And literally, those two $2 billion were given back to the listing agents. So I think both sides benefit from our model. And I think it's the more pro-consumer model.

What's the most important measure of success for portals? And what does a 'pro-consumer model' look like?

I mean, look, it's fun to go Zillowing homes. A couple of weeks ago, I saw this incredible Frank Lloyd Wright home in Tulsa that has gone on the market for the first time in something like 50 years. Even though I'm not looking for a home right now, the fact that I'm on Zillow — I'm familiar with the brand and I'm using the tools — that's good because when I do get serious about buying or renting, the odds are I'm gonna go back to the site I've been using.

But we have a big focus at Zillow around high-intent home shoppers. These are people who have given all the signals that they are serious about buying or renting. Among the 200 million people who are on Zillow, we have very, very high-intent users. If you look at the numbers of visits per month, time per visitor, we were the highest in the category. So people are coming on the site, spending time and engaging with the content. 

What are we doing to help these high-intent buyers and sellers? About a year and a half ago, we bought a company called ShowingTime, which is software that agents use to facilitate and schedule showings. And what we have done is take some of the technology to build a feature that we call real-time availability. So now if you're a consumer on Zillow — and we're testing this in four markets — you can say, I would like to see this home and let me see when it's available. It's like OpenTable. It's literally like booking a restaurant reservation: You know it's available, you book it, and then we say great, we're going to find an agent who will meet you there. And you can go take that tour. 

This is a great segue to the 'housing super app' we've been hearing about. What is it, and how does it play into Zillow's strategy with agents?

We believe firmly that the buyers and sellers need agent representation. And for the best consumer experience, it's not just technology and it's not just working with an agent. It's that combination of a technology-enabled agent which gives them some of those superpowers. And so the housing super app is actually focused on helping agents deliver better service. 

For example, with ShowingTime, we've got about 1.2 million users who use that platform. That's 75% of the agents in the country, which is pretty remarkable when you think about it. We also have a transaction management system called Dotloop that we've owned since 2015. It has all the documents you would need to use in real estate right from the beginning of the transaction to the end. Dotloop actually touches half of all real estate use real estate transactions every year.

We've also got a product called Offer Manager, which enables agents to submit offers and the listing agent can see all of the offers and compare them side-by-side. They can send the comparison summary to their seller to make the conversation easier. So that's going into the housing super app. 

And we purchased and launched some new tech around a technology-enabled photography company. So now when you get your listing agreement in Dotloop, what do you need to do next? You need to get your photos. You can electronically order your photographer and get the photography done. And then, using AI and machine learning, we can actually generate a floor plan, and you can see the corresponding photo and the direction the camera was pointing. 

So we've got these components, and we're now bringing them together so they all talk to each other which streamlines the transaction. And there are new pieces that we're adding to it. We're stitching all of these pieces together and this is going to be a multi-year journey to really empower agents with all the tools they need. 

So it's not going to be one actual app?

The notion of super app functionality is you've got a bunch of a bunch of abilities or a bunch of functions that all talk to each other and are all integrated. 

The gen-one super apps were just one icon on your phone. Our belief is that for real estate, when you want to book a showing, it's probably easier to click on the showing tab. But the good news is anything that you entered into that piece of software automatically flows to the other pieces of software you're using. So if you think about a suite of tools, it's not too different actually from the Google Suite where your tools are all aligned and they all live in the cloud. It's a suite that's really more the vision that we're thinking of for the super app.

But it won't be what agents use today. The problem real estate agents have today is they have a bunch of point solutions. You know, Solution A for creating a CMA, and Solution B for writing an offer, and nothing talks to each other.

Agent adoption of tech can be a challenge. How do you get agents to buy in?

You hear stories constantly of brokerages who make a big investment and then 7% of their agents use it, which is incredibly disappointing and frustrating. We've got quite a bit of experience in building agent tools and driving adoption. It really comes down to two things: utility and simplicity. Some software in our space, it's questionable about whether it really is helping advance your business.

We have all this experience in building consumer interfaces on Zillow and Trulia, and we have those same design teams working on the user interfaces for our real estate software. This is actually how the iPhone beat BlackBerry back in the day. There's the famous interview with Steve Ballmer scoffing at the iPhone as being a toy, saying it's not a business phone. But we're all consumers. So, I go buy an iPhone, I'm using it at home, and I love it. I want to bring it to work. And before you know it, corporate IT departments are obliged to support the iPhones because that's what people want to use. And next thing you know, BlackBerry, which owned the market, is gone. 

We have the same perspective that real estate agents are also consumers. And if you know how to build consumer interfaces, you can build better B2B software and agent interfaces. And we think that's one of the keys to driving adoption.