‘Agents are core’: Zillow's push to win over agents, innovate through tech 

Zillow's impact on the real estate industry has been a divisive topic among agents since the company blazed onto the scene nearly 20 years ago. Some view Zillow as a disruptor and a threat to their livelihood, while others have built their business around Zillow's Premier Agent offering. 

Errol Samuelson, chief industry development officer for Zillow, says the listing search giant is doing even more for agents than it has in the past, while also striving to provide a superior consumer experience.

Samuelson sat down with Real Estate News for an exclusive, in-depth interview to discuss the company's relationship with agents, how AI factors into their tools and products, their strategy for holding onto the top spot among real estate search portals, and more. 

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

How does Zillow work with agents?

We have these two categories of business. One of them is Premier Agent, which is an advertising program that works really well for some agents and for some teams who like working with online inquiries and know how to work with these kinds of consumers. But not every agent wants to buy Premier Agent.

And then we've got this other business line called ShowingTime+, which includes all these software components for agents — whether they buy our ads or advertising products or not. 

One thing that some agents don't understand is they feel like, "Well, I've got to advertise with Zillow or I can't work with them." That's not true. We're perfectly happy if you never spend an ad dollar with us your entire career, but we can help you in these other areas.

With Zillow Offers, you were working directly with buyers and sellers, and some agents felt shut out of the transaction. After that program ended, did you have to regain agents' trust?

Maybe it looked like that from the outside, but Zillow Offers was pretty agent-centric, in that we used partner agents for the majority of the program to represent us when we bought, and a third-party agent was getting a commission. We'd fix the house up, we put it back on the market using a third-party agent, we put it on the MLS, so that whoever brought the buyer got a commission.

In fact, sometimes, there were more commissions being paid because we turned the house. And we've always thought that you have to have an agent in the center of the transaction. It just doesn't work, otherwise.

We've always believed that agents are core, and we've always partnered with agents, but we are doing a lot more for agents right now than we were. The way one would destroy a good brand, a strong brand like ours, would be to connect a consumer to an agent who doesn't respond, or connect them to an agent who doesn't do a good job. I mean, everything we are doing right now is to make agents more successful, because when they win, we win and vice versa.

Are there ways for an agent to boost their listing on Zillow? Or is it based on whatever the consumer is searching for, like time on market or price?

We give a slight preference to listings that have better content. So, if there's a 3D tour of home, we'll actually note that on the map with a different type of a pin and we'll also give it a slightly higher boost. 

But today, we don't have a product where you can pay to get your listing at the top of the search results. I would note that some of our competitors, they're proposing a business model where you pay to get to the top of the search results. The challenge with that is just because the agent paid for you to see the listing doesn't mean it's a listing that you want.

With Google, maybe one or two sponsored search results are at the top, but if you look at some of the other real estate websites, it's paid page after page of boosted results, and I don't think that's a great consumer experience.

AI is a hot topic in real estate tech. Is Zillow working on any AI tools or initiatives?

I believe we are on the cusp of a pretty interesting revolution here. We've been using AI for a long time — for example, the Zestimate incorporates a bunch of AI, including machine vision. 

About four or five years ago, we added some software that looks at listing photos and the AI would classify the room and then give a quality score to the room from 0 to 10. With the Zestimate, you know where the home is located and how big the lot is, but we wanted to get a feel for quality, and that significantly improved the quality of the Zestimate. 

If you go on the mobile Zillow app, we have natural language search. You can say, "Homes for sale in Chicago with a pool less than $500,000," the same way you'd type it into Google, and that's been live now for a few months. 

We also built a plugin for ChatGPT, so you can just say, "Hey, we got relocated. I gotta move to Phoenix," and it talks to you like a human. "Oh, are you looking to buy or looking to rent?" It serves up a couple of sample homes from Zillow and you can say, "I'd like something in this architectural style," or "I'd like something that's cheaper," and you're having this conversation, and it's actually pulling real-time listings on Zillow.

How does the rentals side of your business fit into your strategy?

Zillow is actually the largest rental network in the United States, and that's been true every year for the last four years.

We have the biggest for-sale audience and the biggest rental audience, and why does that matter? Because our last survey showed 68% of renters said that they were also thinking about buying at the same time as they were selling — and actually that percentage has gone up every year since 2018. 

Real estate is a huge industry with a lot of different business models. Is there enough room for everyone? 

One of the great things about real estate is that it is an industry of entrepreneurs. Agents are the quintessential entrepreneur. A lot of brokerages were startups themselves. There's a number of interesting brokerages out there experimenting with new business models that are growing rapidly. Look at eXp — I think 10 years ago, nobody would have expected them to be as big as they are. I think Side is doing some interesting things in creating brokerage cloud services. 

So there's a lot of innovation going on out there. I think it's like any industry: Is what you're doing providing value and are you the best at what you do?

In the portal space, Zillow is number one, but your competitors are trying to gain market share. How do you plan to stay at the top?

When you're number one, you become an easy target for your competition. But the flip side of being number one is it gives you the opportunity to innovate. 

We have billions of dollars of cash in the bank that we can use if we need. We can attract top talent. We're fundamentally a technology company that is delivering services to the real estate industry. So, our competition is Google and Amazon and these top-tier companies. That's who we consider our competition in the fight to get the best talent. Being large, well capitalized, and a beloved well-known brand gives you an edge in these areas.