What Opendoor + Zillow's Partnership Means for Agents

WTF is happening with Zillow and Opendoor? If you haven't heard, Opendoor was fined $60+ Million by the FTC for falsifying consumer promises and cheating home sellers out of thousands of dollars. So what did they do? They partnered with Zillow as a target lead source. What does that mean for day-to-day Realtors? It means you need to button up your business because the eyes of the government are on us.

On this week's episode of the Massive Agent Podcast, host Dustin Brohm stresses the importance of articulating the correct value you provide for the fees that you charge. You might already be doing that, but today's urgency is more significant than yesterday's. No, normal-day Realtors are not going to have to leave the industry. But, If you thought Opendoor and Zillow were dead, you thought wrong.

Many agents rely solely on the market, but that isn't going to cut it. The key here is to dominate search, social media, and video so you can beat Zillow on a local level. Zillow has been around for over a decade, so don't be intimidated. Start learning to articulate your value proposition at its utmost potential. Ask yourself, what services will you provide daily or behind the scenes? What exactly are they going to walk away with? Then execute it.

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Transcript

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SPEAKER_01 0:00

On this episode, we're going to talk about all this Zillow and Open Door news. Opendo was just fined, and then it was announced Zillow and Opendoor have become partners. Well, what the hell does this mean for you, real estate agents?

SPEAKER_00 0:14

The Massive Agent Podcast. We need generation tips and strategies to give you more leads and sell more homes.

SPEAKER_01 0:21

I love to buy houses. I like to sell houses.

SPEAKER_00 0:26

Wait a minute. Leads a week. I've had better. Oh have I got your attention now? Here's your host, Dustin Brome.

SPEAKER_01 0:40

What's up, guys? Welcome to episode 242 of the Massive Agent Podcast. I am your host, Dustin Brome, and I'm here in my studio, if you will. And if you're watching on YouTube, you see how hilarious that word studio is. Here in my studio in Salt Lake City, Utah, and uh we're gonna be talking Zillow and Open Door today. There's been a lot of news about these companies lately, and they're they're two different stories, all right? So, most importantly, is not just giving you the news, because you've probably seen the headlines, you've probably read some some shit about them, maybe you've watched a video and got a little bit of context. But I want to dive deep today on what it means to you, what it means for us realtors, and what you should do about it. Should you be changing your behavior, if anything, should you be focusing on anything different? Should be should you have any other priorities in your life and in business? So that's what we're gonna get into is what this shit means. So let's start uh with well shit, let's just jump right into it. So, open door, a week or so ago, was fined $62 million for quote unquote misleading claims. Okay, so the the FTC, the Federal Trade Commission, uh it was announced they are fining Open Door $62 million to settle charges for cheating, quote unquote, cheating home sellers out of thousands of dollars with misleading claims. What the FTC basically said is open door, you've been lying to consumers, saying that they will make more money selling their house to you. And the data shows otherwise. The data shows that that is not the case, that sellers are actually not making nearly as much money uh when all is said and done. They're not netting as much money as if they were to sell it on the open market with a licensed real estate agent. And uh, and so because opendour was claiming the opposite that, hey, sell it to us, you're gonna make more money than if you listed with an agent, that proved to not be accurate, and that got opendoor into some trouble. Now, there's a lot of agents that are gloating and you know, taking a victory lap that, oh, open door got fined $62 million. First off, let's talk about that that figure $62 million. Okay, at the time I'm recording this, mid-August, okay, this is after the news has come out and all of that. Uh, Opendor is worth about $4 billion. Their market cap on the stock market is about $4 billion. At one point, it was it was closer to $30 or $40 billion. Okay, so the the value has come down quite a bit as far as uh what Wall Street's valuing open door. But as of today, $4 billion. They get a $62 million fine. That's like getting a parking ticket if you make a quarter of a million dollars a year. You know, you have to pay a $50 or $100 parking ticket. Okay. It's it doesn't do shit to open door, like it's it's literally a slap on the wrist. So $62 million is nothing, but it's what it's what it says. Okay. Here's I'm gonna dive into this one first, and then we'll talk about Zillow and Open Doors partnership, which uh is just a whole other can of worms. So it's a whole other thing for for us agents to know about and pay attention to. So with the fine, if you're an agent who is taking a victory lap and you know pounding your chest and you know basically saying, open door, you know, they're full of shit. You should always list with an agent, anyways. You know, open door, they're going out of business, you know, blah, blah, blah. Here's what you're missing. And I didn't I didn't really see this until I spoke with Barb Betts at uh um Inman in Vegas, just a random conversation out of Starbucks, and she's like, look, agents are missing the fact that the FTC is looking heavily into our industry, how we get compensated, the business models, uh, how much commission sellers are paying to sell their homes, um, how much money agents are making, like fees. All the FTC is looking at us. Okay, so the eyes of the government, which let's be honest, they're not here to help. They're not here to improve things, they're here to punish. They do punitive shit. Uh, they are here to, you know, to get shit done to meet their own political will for whatever reasons, whichever alliances they have, whoever's pockets they're in, whatever. Uh, that's what's happening. So the fact that they were looking at open door in the first place and and looking into the data and saying, you know what, you're claiming this, the data shows otherwise, shows that they are heavily looking at our industry. Okay. That could be good for consumers, but that's if you trust the government to do what's right. Um I don't really trust them to do what's right, for sure. So uh it it could in theory be good for consumers. It's probably not good for consumers or for us real estate professionals. So there's there's just a ton of scrutiny. What that means for you as a real estate agent is you just need to button your shit up. Okay. You you really now more than ever, and look, it shouldn't take this for you to understand the importance of doing what I'm about to say, but you should have been really articulating the value that you provide for the fees that you charge. Now, most of the best agents I know are are getting you know six and a half, seven percent, sometimes even more listings. Uh, I one of our one of our team members yesterday was telling us how he's getting six, six and a half percent listings because he can clearly articulate what they get from it. Here's here's the services you get, here's the marketing that I'm gonna do, here's what it means to your bottom line by investing in this cost to list your home with us, here's what you're gonna get. So even though there's agents that are like, I'll list it for 3%, I'll list it for 4%, you know, whatever, he's like six and a half and he's getting listings all day long. Articulating your value. Okay, so basically, if you're able to back up what you're charging sellers, you're gonna be fine. Okay, the problem is agents who are just relying on the market to sell the house for them. You get a listing, you put it on the MLS, you put a sign in the yard, maybe you post about it a few times on social and the house sells. This it's not because you're this marketing genius. It's there's market conditions at play here. There aren't enough homes to satisfy the demand. Even with the market shift, there's still not enough homes. We're still below average from where we were at supply-wise in like 2018, 2019. So we just got so used to the super, super low inventory, meaning not very many homes available and so many people going after them. So you didn't sell that house. The market did. Okay, you just you were lucky enough to get the listing, and then you really did the literal bare minimum. It's not that you're a marketing genius. Well, there are agents and team leaders and you know who are marketing geniuses who really do have they have an email list of buyers that they can go to and sell the house before it even hits the MLS. They can position it in front of out-of-town buyers if if you're in a certain community that out of, you know, people are moving to from out of town. Like they they understand marketing, they understand how to get more eyeballs for the property. And when you do get more eyeballs, you get more offers, you get higher offers. It's just better, right? There's agents that do that. So if you can justify that and show that you actually do provide value for the cost of your services, you're gonna be just fine. But the agents who don't, that really don't do shit and they're like, I charge 6% or whatever, they put a sign in the yard, they post about it on Facebook and let the MLS do its thing, it's really hard to justify the fees that you're charging when the government is looking at is you know, are we just extracting money from sellers? That's what they're looking at. That's what a lot of people think is that realtors just extract money from sellers. And and let's be honest, there are agents out there that that's literally what they do. They're not earning the fees they charge. Now, not you, of course. Not not you, of course, but uh we all know the agents that don't do jack shit. And uh those are the ones who could be in in trouble. If the FTC starts looking at stuff, if your state regulator starts looking at what you're charging, what you're actually providing, and they're gonna be like, This is this is bullshit. So button it up, guys. Button it up. All right, let's move on to the partnership. So after open door gets fined and agents are you know puffing up their chest and crowing about it on social, you know, blah, blah, blah. Open Door sucks, you know. Great. I hope you had your fun. Because then, I think like a week later, Open Door comes out with Zillow and says, Oh, by the way, we're business partners now. Yep, Zillow and Opendo are business partners. And here's what that means: Zillow, even though they left the iBuying game, okay, they they they shut down their Zillow offers program a while ago. Well, I don't know if that was a year ago or whatever, but you know, it wasn't last week. They've been out of the iBying game for a minute. And uh agents, of course, taking victory laps and you know, shitting on their grave, you know, all of that. Uh, I'm sure I did a video meme of you know Zilla being dead or something like that. That's all fine. But Zillow is smart as shit. If you if you underestimate Zillow long term, I promise you're gonna lose. I promise. There's there's just so many smart people that are thinking outside the box in ways that we in the industry don't or can't because we're so programmed with how the way things have always been done. If you're programmed with how the way things have always been done, it's really hard to innovate now, isn't it? So they're not programmed with the way things are done. They're programmed, they look at shit, not just Zillow, but any outside Silicon Valley tech firm, like they open door included, they look at what we do and how we do it, and they're like, that's not very efficient. Like we could do that in half the time. We could do that for half the cost. Like, why do why don't we just eliminate this whole thing altogether because that's unnecessary? They they aren't biased with the way things have been done before. That's Zillow, and they are the best of the best at it. So don't ever underestimate them. So they came out and partnered with Opendoor, so they're like, even though we're not doing our own iBying program, we'll just partner with the biggest one, and now we have seller leads again. Zillow is now back in the seller leads game, okay? And opendoor now has the Zillow is now their largest um lead source, right? That they they have more exposure through Zillow than they've ever been able to get themselves. So uh basically, Zillow is going to be providing offers once again through their platform from Opendoor. So rather than giving a seller some offers for Zillow to buy it, they're just gonna provide open doors iBying services through their platform. Genius, right? So it makes so much sense. Um Zillow's back in the the headline on real trends, Zillow's back in the seller leads business with open door partnership. Uh that this is a big move for both companies. It reaffirms the continued relevancy of iBuying. It gets Zillow back into the seller lead game and gets opendoor access to its largest customer acquisition channel yet. It's a match made in lead gen heaven. Zillow generates and monetizes buyer leads, but is missing a product that generates seller leads. So opendoor generates millions of seller leads, but it's really expensive, and opendoor only monetizes a fraction of those leads. Match made in heaven. Right from realtrends.com. Okay. Interesting. So if you thought opendoor is dead, or Zillow's dead, or Zillow is permanently out of the offers game, you're wrong. They're just making moves. They're making moves that you aren't considering. So, what does that mean for you, a real estate agent? As always, you'd better be able to articulate why someone should hire you. You better be visible. If look, Zillow cannot compete in your neighborhood. They cannot compete on your street, they cannot compete in your subdivision, they can citywide. So if you become the expert, if you dominate search, if you dominate Google through your website, through your blog, and then you dominate social media and you become known as uh, you know, like the home, the homes and holiday guy, you know, for example, or the the uh condos in Salt Lake lady, whatever, and you just become known as that person, you can absolutely beat Zillow at their own game at a local level, but you can't beat them, you know, statewide, citywide, nationwide. So if you are visible online and you're doing content, people are getting to know you, they're making a connection with you, there's they're learning what you do for a living, they're learning, uh, they're deciding for themselves through what you post that you are very good at what you do, you're knowledgeable, you're they can trust you, and you're likable, you're gonna win. You're gonna win. So if you're sitting there thinking, oh my god, Zillow and Open Door are partners, I'm dead, we're all going out of business. You dipshits have been saying that ever since I've got into real estate. You dipships have been saying that for 11 years. Okay, I knew about Zillow before I ever got my real estate license. And I was like, well, that's a cool website. I didn't really understand what they'd do with it, what it would become. I didn't know that at one point I'd I'd be you know be paying Zillow truly at the time for for leads. I didn't understand that. But I knew I knew of Zillow. So look, ever since I got into the game, people are agents are freaking out that they're gonna be out of business. Well, are you? Did they put you out of business? There's a lot of teams out there, a lot of a lot of agents that all their business comes from Zillow. Or a large majority of their business comes from Zillow. Now that that's a double-edged sword, right? And we can talk about that till we're blue in the face. Is Zillow good or bad for our industry? It depends on how you look at it. It really depends. So look, here's a partnership that will get traction. They will get sellers going to Zillow, they will get sellers getting offers from Opendoor, and they will get sellers accepting those offers and not listing with an agent. They're gonna list through, you know, Zillow Zillow's agents or Ondoor's agents or however they're structuring it. Okay. I uh what three percent of the of the sales are gonna do that? You know, five percent, I don't know. It's it's it's very minimal. So if you can just learn to articulate your value proposition, which is a fancy way of saying, what the hell do they get if they hire you? What are you gonna do for them? What does it mean? Like literally, tangibly, what are the services you're going to provide? What are the things you're going to do on their behalf? What are the things that you're going to do for them behind the scenes that they don't even know need to be done? What are they going to walk away with when all said and done? After all the fees and costs and everything of selling a house, what are they actually going to net? If you get really freaking good at articulating all of that, you're going to win. You're not just going to survive, you're going to thrive. You're going to become one of the biggest, most successful agents in your market. Because the biggest, most successful agents in your market, guess what they're doing? That they're just they're doing that. You do that through videos, possibly podcasts, social media posts, social media content. Look, the internet is like social media is the internet. Web 2.0, it's called. Okay. Like web 1.0 was before social media. It's hard to even imagine the internet before social. Now there's web 2.0, which is like social is is is the internet, right? And everything kind of like runs uh you know around social somehow. Web 3.0, which I don't even know why I'm mentioning this, but some of you may have heard of web 3.0, that's what they're calling blockchain and cryptocurrency and decentralized web, and kind of like this this next step, this next evolution in what the internet is. And some of that's already come into fruition, some of it's already being implemented. But where we're at now is this web 2.0 social media world where the internet is social media, social media is the internet. So pretty important that you have a presence there. Not just social, but in search. And I don't just mean website, blog, Google. YouTube is one hell of a search engine. Your dishwasher breaks, it won't start, what do you do? Now hopefully, hopefully you're if you have a home warranty, you call them, say, come fix the shit, or you call a professional, come fix the shit. Or if you're just curious, you're just gonna go to YouTube and say, How to wh why my dishwasher won't start? How to fix a dishwasher that won't start. And you're gonna maybe find that, oh, this little thing became disconnected, or oh, you just need this new whatever. YouTube is the biggest search engine behind Google on the planet, so you should probably show up there somehow. Something to think about. You do those things, you can absolutely win. Those things are more important now than ever. So you don't need to do anything new with Opendoor and Zillow's partnership, but I hope you understand the urgency of doing the things that you know you need to do. The urgency is now greater than it was three weeks ago. Because Open Door had a massive audience, massive budget, name recognition, Zillow, the biggest name, the biggest budget, the biggest audience, and now they're partners working together. You gotta take that shit seriously. Not to be afraid of it, but to just understand how important is it now to really be seen and found online. There's so many different ways to do that. If you don't like being on video, you can speak words with a podcast. Most of you guys who are listening to this are listening without seeing me. So what I look like, what I'm dressed like today, what my if my hair if I'm having a good hair day or not, if my black hat is on forwards or backwards, or at all, you don't see it, doesn't matter. So you can roll out of bed and do a podcast, which sometimes I do. So there's there's more than one way to skin a cat here. But what's important is that you figure out your way so that you can dominate, so that you can actually be found when people are looking for agents locally. And if you're referred to somebody, when that person that that you were referred to by one of your past clients goes to Google your name or look you up on Instagram or whatever, and you want to make sure that they find shit that that adds credibility, not takes sit away. Because a lot of you guys who aren't doing much, or you're just posting pictures of homes or quote graphics, or you know, you go to your Instagram profile and you can't even see your fucking face. That's the biggest red flag ever. Like, I'm a professional, hire me. Here's my account that I made, so people will hire me, but I won't let you see what I look like. Red flag, weird. So show your face, perhaps. You guys get the point. You guys get this shit. You really do. Um, guys, I am working on putting a schedule on my website, the Massive Agent Podcast website, uh, of where I'm gonna be, which events I'm going to, which events I'm speaking at uh in the near future. Because um, you know, whenever like I I was in Inman, I went down to Inman for uh a day last week and a bunch of messages. Oh, I didn't know you were you were in town, or you know, whatever. So I want to let you guys know. So I'm working on on that. The next the next big thing that I'm doing, uh I'm gonna be in Dallas. Uh, when is it? In two weeks for the EXP build conference with Tony Robbins. I'm gonna be there. Uh, and then uh Tuesday, what is that? I'm looking at my calendar, Tuesday, August 23rd, I will be cruising to the other side of Dallas to the Tom Ferry Summit for the the Broke Agent Media Launch Party. If you guys are going to the Broke Agent Media Launch Party at the Tom Ferry Summit, I will see you there. After that, I'm going to Hawaii. I'm going to be speaking at an event on Waikiki Beach in Honolulu Thursday, September 1st. And if you guys are in Hawaii and you want to go to that event, you want to get a ticket, shoot me a DM on Instagram and I'll find you a link. And uh we'd love to see you there. Um, I've already had a handful of a handful of you guys in Hawaii that uh that are coming. So that's super super cool. And if you if you're also in Hawaii, Oahu specifically, and you want to go, shoot me a DM. Um, but I want to get that calendar up because I love meeting you guys. I I you know it's why I do this. Like I I want to help. I want to have impact. I want to have conversations. I wanna um it's important to me. So I want to let you guys know where I'm at. So I'm working on that. Guys, I appreciate you listening so much. I will talk to you soon. Go get some shit done. Have a great weekend. See ya.