Last week, Zillow lifted
the veil on its much anticipated mortgage initiative halfway. The
consumer-facing part is still under wraps, but we now know the company plans to
screen the mortgage professionals it allows to interact with its consumer
They have jumped straight into the credibility gap plaguing the housing
industry these days. Naked. The splash was big and some people are
Since the company launched two years ago, they have played around the
edges of the industry’s Achilles heel — the space between what it says and
what it delivers — by giving consumers free access to information that had
been jealously guarded by practitioners.
They have now moved beyond data to the practitioners themselves. Who’s
good? Who’s bad? Who’s going to tell me what’s what? Zillow will.
Those who are professional, who have hewn to the consumer side of the
line all along, should welcome this. Those who floated on the magic carpet ride
that was the boom market with thin credentials should freak out.
I won’t ascribe too much importance to this development. Last
week’s announcement was not a launch. And the originator requirements they
outlined are only impressive relative to the anemic standards set by licensing
authorities. But this is nonetheless a signal moment that should not go
unconsidered by real estate brokers and loan originators alike.
It’s the "President’s Message" to consumers on the Website of
Tarbell, REALTORS, a major California brokerage company. It reads, in part:
"I am confident our highly skilled real estate professionals will
provide you with the unparalleled level of service and expertise that you
Tarbell is a venerated company in many industry circles. And the folks
there are honest and decent. I use the example above because when I came across
it last week I was struck by the astonishingly vast philosophical chasm exiting
between Zillow (and many others in the online real estate category) and much of
the "traditional" brokerage community.
Transparency on the one side; fog, in my opinion, on the other.
So what happens if Zillow starts putting its imprimatur on Realtors? How
vulnerable will most brokerages be if (I would say when) a ratings/review site
like HomeThinking, AgentScoreboard or IncredibleAgents gets its bearings and
takes off? How quickly will consumers drive out bad actors once they have the
means to do so?
A time to destroy
Philosopher Joseph Shumpeter coined the term "creative
destruction" to characterize the process by which capitalism sustains
itself: New entrants — innovators — destroy old and sometimes still valuable
companies, processes and markets to create new value.
Zillow is rocking the creative destruction angle right now. Real estate
brokers and agents that want to be around ten years from now better join in.
To do so will be painful. But safe is no longer an option. Whether you
look at it as a Hail Mary pass or a long term investment in your future, it may
be time to:
- Destroy the blinders maintaining a closing-to-closing
range of vision
the comfortably hackneyed voice emanating from your marketing department and
recognize that while honesty with the consumer may lose you one deal or recruit
tomorrow, it will gain you a hundred over time.
the porous walls around your brand and build real standards into your
recruiting and training processes.
the gap between claims and reality you can no longer hide from consumers in a
Web 2.0 world.
A happy ending
I am not sounding the real estate brokerage industry’s death knell. I am
underscoring opportunity. When I survey the industry, I think there are plenty
who will fail to seize it. But there are some, too few, who will take a cue
The old real estate sensibility is a teardown. Start swinging the ball
— Brian Boero