Our industry’s time is now! It’s time we seize back assets and relationships that have traditionally been ours. Exclusive relationships, listings, marketing rights, ancillary services and now the marketplace, or the ‘ultimate housing super app.’
In Zillow’s quarterly earnings call, the ambition was articulated to deliver a “housing super app” to connect consumers with partners (vendors) through integrated digital solutions. The real estate marketplace was further articulated as $300 billion in transactional fees.
Zillow’s 2025 fiscal target is $5 billion in revenue and 45% adjusted EBITDA or $2.25 billion. One and a half billion dollars of this revenue is to be generated by incremental fees paid by real estate professionals – the source of these fees are real estate commissions – traditionally YOUR real estate commissions.
Please understand these are not net new revenues and EBITDA in our industry, this is a market share grab – traditionally OUR market share! Zillow is targeting to double its Premier Agent business which generally includes a 35% referral fee paid by the receiving broker – YOUR commissions.
A marketplace for lead gen and core services
With respect to the “ultimate housing app,” this will target lead generation for buyers and sellers plus ancillary services (e.g., mortgage, title, escrow, insurance etc.). Ancillary services are not new to a brokerage company or the consumer. What is new is the momentum towards technology – a marketplace – to elegantly stitch these services together for the consumer.
Do you really want your clients using Zillow or any other competitor for this offering? This would be a monumental shift of market share of your services or from your professionals’ influence and recommendations to clients to Zillow’s ‘housing super app.’
Direct to consumer marketing
The trend of financial services companies pursuing consumers direct versus through the real estate professional is very real and gathering significant momentum. Just reflect on the Super Bowl played at Sofi stadium and where Rocket Mortgage spent $20 million on two advertisements. Both companies have apps for consumers.
Pick your technology providers carefully. There are a variety of offerings available – several that enable branding for you and your real estate professionals. Make sure you’re not using a competitor for your ‘housing app.’ Do your research, hire a trusted expert or a consultant with a deep understanding of the space.
These are your clients, and your market share others are chasing. Be proactive and deliver to your clients the tools they want. Consumers will ultimately get exactly what they want, after all an entrepreneur will give it to them. If the technology or “housing super app” is not from you – it will be a gift given to your client by someone else.
Mark McLaughlin was previously chief real estate strategist for Compass and is founder of McLaughlin Ventures, a real estate consulting company.
This column does not necessarily reflect the opinion of RealTrends’ editorial department and its owners.
To contact the author of this story:
Mark McLaughlin at mark@mclaughlin-ventures.com
To contact the editor responsible for this story:
Tracey Velt at tvelt@realtrends.com
