It’s almost a done deal, Zillow is buying Trulia. As of July 28, 2014, and for a mere $3.5 billion, Zillow, the industry’s real estate listing leader, bought Trulia, the industry’s #2. In the month before the sale, Zillow logged 53.8 million viewers and Trulia had 31.6 million. That’s a whopping 85 million viewers and now Zillow owns them all! Why is that important to you?
There are three major fears or downsides many Realtors have about this emerging giant in the industry.
- The newly merged company will have a lot of power over listings and may raise the fees they charge you.
- The strength of online listing business is growing, while the local MLS services are showing some weakness.
- Although they have avoided it in the past, the size of the new company may make it attractive for them to get into the brokerage business.
Here’s the backstory on how this deal got put together. Zillow, the industry leader, has long been the best known player in the market, with its popular “Zestimates” of property values a feature that’s well-liked by homeowners everywhere. Trulia, on the other hand, has some cool tools that tend to attract both buyers and sellers. The two competitors admired each other’s complementary skills. Many homeowners used both sites, but Zillow particularly noted that about half of Trulia’s visitors never logged on to Zillow, while two-thirds of Zillow’s users never looked at Trulia. So the courtship began.
It didn’t last long. In six months, the marriage was complete, with Zillow paying, in stock, 0.444 one of its shares for one share of Trulia. The total deal is valued at $3.5 billion. The company will operate under the Zillow name and will expect to realize $100 million savings through economies of scale by 2016.
“This follows on Zillow’s aggressive path to dominate the residential real estate space and become the undisputed leader in providing consumer-convenient, one-stop home shopping information,” said Stefan Swanepoel, a consultant and author on real estate trends. “Life for all other real estate portals will become twice as hard.”
The company plans to continue maintaining both brands, since they believe their overlap is minimal. Maintaining both brands within the same corporate parent will allow “us to better serve a larger audience, while taking advantage of certain shared back-end services,” says Zillow president Steven Rascoff.
According to Bloomberg, Zillow’s deal to buy Trulia will create a Goliath of online real estate listings and home values. A survey of analysts, speaking off and on the record, showed that none had serious concerns about antitrust issues with the deal. The National Association of Realtors reportedly wants federal antitrust regulators to block Zillow’s planned acquisition of Trulia, but there are no signs that the Federal Trade Commission plans to intervene. If you have strong feelings about this issue, contact your local Board of Realtors or the appropriate Federal agency.
So apparently the competition for your client’s attention and business is heating up, along with the market itself. What is the savvy Realtor to do?
- Use it to your advantage. The new company claims it will offer far more options to sellers and Realtors in terms of listing and advertising their properties. Educate yourself. Get to know the sites intimately and understand what they have to offer. Be sure your name, contact information, and a good professional photograph are present under their “Agents” listing. Over time, make a point to track your clients and find out where they are coming from. If even one deal came from Zillow or Trulia, it’s worth your time and money to be present there. And if that trend grows, your presence becomes even more important.
- Keep your own Internet presence highly polished. This means you have a professional web site that’s fresh, contemporary, up to date and highly interactive. It means you’re easy to reach via phone and email. It means your information is as current as today’s headlines. And it means if a potential client Googles “Realtors Yourtown,” your name comes up at or near the top of the list. (Note: if your web site doesn’t meet these criteria, we can help. Check out our special web site offer and let’s talk.)
- Capitalize on personal service. Neither Zillow nor Trulia offers visitors the warm, personal experience that you, the individual Realtor, can provide. No one there will hold an open house, help nervous first-time buyers navigate the mortgage market, or come to closing with a bouquet of flowers and the keys to their new house. A home is probably the biggest investment many of your clients will ever make. They want and need someone to be there with them in person, not be some vague presence at the other end of a mouse.
Don’t let this deal frighten or intimidate you. Here’s why: Zillow and Trulia combined control less than a 4% share of the estimated $12 billion spent annually on real estate advertising. Most real estate advertising is still done by Realtors like you who buy space in newspapers, put up billboards, send out direct mail, and pay for good web sites. So use this as an opportunity to reevaluate your marketing strategy and improve your impact every way you can. You’re still in charge!