Zillow-Trulia will reduce the number of bad real estate agents

The merger of Zillow and Trulia may force marginal agents out of the business and concentrate activity among the best producers.

realtorAmerican realtors have long maintained a system of high commissions that bloats the number of working real estate agents. Many poorly trained and poor performing agents stay in the business despite completing few transactions because they can make a great deal of money on the few transactions they do complete. Real estate recessions purges many of these bad agents, but like April showers bring May flowers, increased sales volumes sprouts tens of thousands of new agents who cling to the margins.

Other countries don’t have our high commission system, and they have fewer real estate agents. In Great Britain for example, commission average 2% to 3%, and they support far fewer real estate agents. Potential homebuyers in Great Britain typically aren’t shown dozens and dozens of properties without making any offers. Over there agents are only willing to work with serious buyers, and if a client doesn’t make offers, agents will fire them. Since the there are far fewer real estate agents, lookers don’t have a large stable of agents available to work with, so only the most serious buyers go to a real estate agent to begin their search.

American buyers are spoiled. Since there is so much agent competition here, most agents will patiently work with buyers to look at as many houses as they wish, hoping that buyer will lead them to a pot of gold to make it worth their while. If the number of real estate agents is reduced, something that may happen with the new Zillow-Trulia merger, then buyer behavior will have to change.

The Zillow-Trulia Merger Could Radically Reduce America’s Realtor Population

Jim Klinge,, Jul. 26, 2014, 11:09 AMrealtor-pushy

… Previous attempts by and Redfin to produce an agent-rating or -ranking site was met with vigorous opposition from realtors. Why? Because most realtors don’t want their sales history out in the open.

In an early post on the IHB, I posted a realtor ranking based on sales volume, and within a few days, my data source took down the data. It was obvious that most realtors don’t want the public to know how few sales transactions they are really involved in. A wise consumer would want to work with the agents doing the most deals because those agents are the most skilled and the most knowledgeable about conditions in the market. One of the reasons I promote Shevy on this site is because he is the top producer at his brokerage.

But the successful and powerful agents stand to benefit greatly — the same ones who can and will pay Zillow the big money for advertising.

It is a natural fit for Zillow to buddy up to the top producers and get them to help promote their new agent-ranking site.

The cabal will be shattered.

This would be a good development because it will purge the worst agents from the business because consumers will know in advance how bad they

The local associations of realtors and the MLS companies who have feasted on having realtors paying dues regardless of production will suffer — and should die off completely if 20% of the realtors are doing 80% of the business. They can’t survive an 80% reduction in dues.

realtor associations and MLS companies are fiefdoms. Each one tries to set their own rules, and they behave as atrociously as one would expect from a group of power-hungry and not very bright people. Wiping them out will do consumers a great service, and these associations won’t be missed.

When consumers see that their agent-friend down the street hasn’t sold a house in six months – they will hesitate. The Zillow advertising will encourage you to select one of their top producers instead (the ones paying for advertising).

It should clear out the realtor population within a year or two, and turn upside down the local associations, MLS companies, and the top-heavy big corporations who own real estate franchises.

I hope he’s right. Most agents find clients by farming certain neighborhoods and hosting open houses (open houses aren’t designed to sell homes.) The overcome the fact that they don’t do many (or any) deals or have little experience by doing free work and hoping the potential client will feel guilty about dumping them for a better agent.  Most clients are loyal even to incompetent agents.

The Real Estate Status Quo Prefers You To Be Served By Those Who Are Least Qualified To Help You

Jim Klinge,, Jul. 29, 2014, 10:39 AMdc-real-estate-promo-0924_296

Zillow and Trulia went and got married over the weekend.

… their marriage does set up the Big Showdown:Consumers, Top Producers, and Transparency vs. NAR, Big RE Corporations, Low-Producing Realtors and the Status Quo

The Big Showdown has been brewing for years, and Zillow/Trulia will have to pick a lane. They are trying to sell the marriage as a mutual benefit for all, but it’s not. One side wins, and one side loses.

The fight centers around educating the consumer.

The Status Quo (the cabal) likes to keep consumers in the dark.

realtor organizations strongly resist any kind of rating system or published feedback on the quality of agents mostly because they want to maintain the large number of agents paying them fees.


Zillow/Trulia slipped in when no one was looking and grabbed our listings, produced a better website with more information, and went on a spending spree of TV advertising over the last couple of years. They provided better transparency of our listings than realtors were willing to provide themselves, and based on results, the consumers dig it.

This site provides objective information on the cost of ownership of every property available for sale on the MLS. Some MLSs specifically forbid this kind of information being displayed because it robs them of the ability to cajole buyers into action based on dubious financial representations about a property’s costs or financial performance.

The RE Cabal, defined: The group of entities that thrives on low-producing realtors. The National Association of Realtors and local associations collect the same dues whether an agent sells a house or not. The big corporate franchisors enjoy more-favorable commission splits from new, inexperienced, and lower-producing agents, and if they hire them by the thousands, they can make a good living.

realtor associations and large brokerages make their money by keeping large numbers of non-producing agents pay them dues. It’s a bit like corporate gyms that make money by keeping people signed up that rarely go to the gym.dont_pick_realtor

The top producers demand 80% or 90% (or more) of their commissions, and even though their volume is higher, the small percentages and lack of control doesn’t sit well with the corporate bosses.

What happens now? …

If Zillow takes the high road and is beholden to no one, then it would be free to educate the consumer on the intimate details of buying and selling homes. The Status Quo doesn’t want that – they prefer it to be mysterious so consumers end up with the agents on bad commission splits. Literally, the Status Quo prefers you to be served by those who are least qualified to help you.

More transparency would include agent-ranking and demonstrations on why consumers should work with a top-producing agent. You pay the same or similar commission rate, you deserve to get the best help available.

Zillow will eventually squeeze out the marginal producers and concentrate business among the best producers. This will reduce the overall number of agents working in the business by purging the worst ones. That will be good for consumers everywhere.

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