No Mr. Inman, Zillow is NOT the Real Estate Industry
Brad Inman recently penned an article entitled “Zillow Is the Real Estate Industry. Period”. Brad Inman owns and operates Inman News, one of the real estate industries’ news publications. He is known for provocative headlines, interest in emerging industry related ideas, and is somewhat of a cheerleader for the most recent shiny objects. The shiny object du jour will include glowing headlines for Compass, Zillow, Opendoor, Redfin or iBuyers depending on the day. Search Inman.com and you will find puff pieces about all these companies and concepts.
Mr. Inman hit a new low with his most recent headline. Yes – the headline is intentionally insulting to real estate brokerages, but more importantly it reveals a basic lack of understanding of the industry his news service is dedicated to chronicle. He believes that Zillow is the center of the real estate universe, no one is concerned about the consumer experience like Zillow, nearly all eyes are on Zillow and therefore Zillow owns the future, and the shiny new iBuyer phenomenon is fundamentally changed as a result of Zillows entry. His basis for these beliefs are as follows: 150 million unique monthly users (1.8 Billion annually give or take), monster stock valuation which translates to deep pockets, and control of the top agents lead funnels. Never mind there remains roughly 5 million property sales per year, stock values are sensitive to earnings calls and investor sentiment, and the top agents are not the entire industry. The lack of depth and understanding of the real estate industry is astonishing. Permit me to explain...
Years back I was a nurse and nursing instructor in critical care. Senior students would arrive at my unit where I would task them with doing an assessment on a patient. These students had spent the previous 3.5 years in nursing education. They believed they understood what they were doing. They did not know what they did not know.
The students would enter a patient’s room at my direction and complete a “Head to toe” exam, then report the findings to me. I would say “That’s great, but go do an assessment.” Confused, they would return with a more detailed “Head to toe” physical exam. Again, I responded “That’s great! Now go do an assessment.” Understandably, they grew very frustrated.
After years in the trenches, I knew what a nursing “Assessment” was. The students thought they did – but had no clue. They were SENIORS after all. This was my “teachable moment” with all of them. A “Head to Toe” physical exam is a component of an assessment. It is simply the physical data. You can teach anyone to do a physical exam. What I was looking for was a physical exam, an interview of the patient, a medical history, lab and other diagnostics with correlation, an examination of the patient chart, family support available, current medications, past surgeries, limitations on activities of daily living – all of this synthesized into an understanding of the patients current state and their health care deficits, among other things, which would then be integrated into a plan of care with measurable goals for each deficit. The light-bulbs that turned on were blinding. Dare I say, when they completed their rotation with me, they would no longer lack the understanding of a “Patient Assessment” and they left me with a better idea of the value of a nurse.
Though these students had studied nursing, had been immersed in it, researched it – they had never put the practice into real world situations and failed to understand its basic functions. Much like Mr. Inman, their understanding was from the outside looking in. They had never shouldered the responsibility for patient outcomes and with their years of study and experience, like Mr. Inman with real estate, they believed they "got it."
Mr. Inman deals with CEO’s and superstars. He is more likely to interview those on "Million Dollar Listing" or Robert Reffkin, CEO of Compass than ever talk to me. His view of the industry is through that prism. He doesn’t spend a lot of time with the average agent working in the trenches that don’t read his publication, don’t pay attention to earnings calls, don’t buy Premier Agent Zillow advertising, don't attend Inman Connect, and don’t get million dollar signing bonus’ when they move from broker A to broker B. As such, his reaction to the industry is predictable – he gets swallowed by the hype and perpetuates it.
The average agent is the engine that drives this industry – not Zillow. Zillow exists as a byproduct of the average agents actions. These agents don’t get the Inman headlines. There is no question these agents are singularly focused on the consumer experience. Read Inman.com and you’ll get the distinct impression no one cares about the consumer but Zillow or the latest shiny object. I couldn't disagree more. These agents know a bad consumer experience is the worst advertising they can generate and spells doom to their future business.
No matter what Inman or Zillow says, the average agent and broker care deeply about their consumers’ experience – they’re just too busy delivering on their promise to notice how bad Brad Inman and Zillow think they're doing.
When I read headlines such as Mr. Inman’s I scratch my head. An industry “thought leader” proclaims Zillow is the industry when Zillow hasn’t turned a profit in a decade - let alone the fact Mr. Inman has never practiced real estate. Zillow enjoys the data exhaust of the average agent, and believes the data is primary when in fact it is secondary to the process. Redfin, Opendoor, and Compass are beneficiaries of some of the most optimistic puff pieces on Inman News, yet none have yet to turn a profit. The headline grabbers of today share one commonality which was coined at the most recent Inman Connect - "Sustained Unprofitability." None of the companies Mr. Inman sees as the future are profitable. But don't take my word for it, watch the presentation HERE.
Zillow, whose core business of advertising has hit a ceiling on revenue and now must explore other ventures to find more revenue. With much fanfare and hype, they are now diving into the world of flipping houses. The industry buzzword for this is “iBuyer” but flipping houses just the same. Zillow is entering this crowded space and Mr. Inman, like so many other aspects of this business he doesn't understand, thinks Zillow is on to something new. I’ve got some news for him.
Of course, the argument from all who invest in these behemoths is that “Tech” is the new thing and “Tech” renders the traditional broker obsolete. The FlowBee was gonna eliminate barbers when it came out - just as Zillow will replace the real estate industry. Right... The problem is someone has forgotten to tell the trench workers in real estate how much they suck at this business and how Zillow has become the industry. Leave it to Mr. Inman to light that torch.
Mr. Inman, I invite you to walk a mile in my shoes. I am a broker and I work with a lot of superstars that don’t write monthly checks to Zillow and give impeccable consumer experiences. I’ll let you ride along with them, show property with them, sit an open house, and work the pre-closing roller coaster. I'll let you field 20 inquiries from Zillow and 40 more from others in hopes just one is a real person wanting to buy or sell a home in the next 2 years. Or, perhaps, handle all those strange local numbers who turn out to be a recorded telemarketer spoofing a local number trying to sell more leads or healthcare. Amazing how technology has made this industry so much better for everyone! Maybe a different perspective will emerge of Zillow and how ridiculous your statement is. Perhaps then you can get back to chronicling the players in the industry that are passionate about what they do, deliver impeccable consumer experiences, and actually make a living selling houses.
I welcome your thoughts.
#Rant #Career #RealEstateTrends #Technology #SimpleExplanations