Not sure what other cities they are active in but that market is getting crowded.

https://www.kxan.com/news/local/austin/zillow-launches-home-buying-program-in-austin/

If they are coming in and charging 7.5% with 'some' closing costs included they will not be that big of a threat to traditional brokerages. Watters and the title companies will make more per transaction if they cut out other brokers. But if you are not saving the client real money you can only go so far.

They are also trying to push out seller representation. TREC won't be too fond of that if they push it too far.

I can understand why agents and brokers not involved would push back heavily. From what I understand neither Trulia or Zillow have shown the returns on lead generation for brokers that they have in the past. But that may be anectodal.

7.5 is a fair estimate of a typical transaction cost. The zillion dollar question is whether they offer true market value in your offer. Then it worth considering so a seller can just "getter done". And not have the hassle of all the showings, open housing, stressing over can the buyer close etc.

But a good investor always says you make money on the buy not the sell. I doubt they make fair offers.

The algorithms are fallible. I've seen some offers that would be tough to beat in the open market. Not super common but it happens.

Could be similar to the WeWork model...have Softbank drown you in capital, overpay for assets to gain market share, force everyone else out, then start trying to make money when everyone else is gone.

Ibuying is going to be a battle of who has the deepest pockets. Zillow's model appears to be the most sustainable, though I haven't really dug into heavy research on any of them.

I do not see how any real estate agents can stay with them, unless you are one of the select few that gets chosen to broker the deals.

I am aware of at least one broker that pays them quite a bit of money every month. He is freaking furious.

Zillow's entire goal was always to take over the real estate homebuying industry.

Every agent who gave them money, clicked on their website, or fed them information has done nothing but help them.

The best is the agents who pay money to get their leads.. leads that practically stole from MLS systems and repackaged at a cost to the agent. Makes me laugh everytime an agent mentions that they advertise on Zillow.

All of that, and they are still the bottom of the barrel when it comes to reliable info and realistic valuations.

Got a call from a Zillow salesperson today. She told me I could buy a portion of Prosper leads and it would likely result in 3.5 "connections" per month for the low, low price of $6,200 per month. Almost $75,000 per year. Crazy.