There has been a lot of activity in the headlines recently in regards to the conflict between Zillow's new Instant Offer pilot, the real estate community and the National Association of Realtors. If you have not been in the loop to the happenings of this situation, have no fear, Your Morning Shot is here!

          Let's get some background – real estate news outlet Inman reported that, Zillow Instant Offers allows homeowners to receive all-cash offers from a group of 15 (large-scale private investors) along with a side-by-side comparative market analysis from a local Zillow agent advertiser to assess the viability of these offers. Though this model points to a process excluding the traditional use of a real estate agent, Zillow claims the test aggressively encourages homeowners to use agents for managing and closing the transaction if they don't feel comfortable handling the sale directly with the investor. To reiterate, the current platform is specific to cash-only deals in two test markets, Orlando and Las Vegas, with a limited list of 15 large private real estate investors permitted to make offers.

Zillow's website describes the process in 5 steps:

1. The prospective seller shares details of the home online by answering some questions and providing photos.
2. Investors can view this information and sellers should receive offers within 2 business days if the home qualifies to an individual investors criteria. A comparative analysis will also be provided to the seller for assessing the offers submitted by investors.
3. Using Zillow as the intermediary, the seller may select an offer and connect with the Zillow verified investor.
4. The seller will schedule a free
5. Zillow describes sellers being able to "close on their schedule."

Obviously, this pilot program has caused an uproar within the real estate community as concerns loom over technology's impact on our business. At least two petitions have been launched calling on the National Association of Realtors to act – one of these petitions collected more than 12,000 signatures since debuting May 31st. Though the concerns of the real estate community have reached the ears of NAR's leadership, the Association shared on their blog that quote "NAR cannot sponsor or encourage a boycott of Zillow. It would be unlawful for NAR to discourage members from using any product or service provider."

NAR has just cause for maintaining this position as they've experienced the consequences of seeking to get boycotts of third-party vendors. In 2005, the U.S. Department of Justice sued them over industry attempts to curtail the content of property listings and control what companies could publish them – this act was deemed anti-consumer, and the case was settled in 2008.

While we do not personally perceive this format to necessitate any grave concern to our colleagues at this time, it certainly points to the need for ongoing thought and discussion for the impeding technological revolution of the real estate industry and how to utilize it to our advantage.

 

Interested in connecting with me? (three options)

1. Do you have a real estate topic for our next blog? Send us a message at [email protected]
2. Want to join me for lunch? E-mail [email protected] and let's get something on the calendar!
3. Looking to grow your real estate business by leveraging key mortgage concepts? Join us for our Elevate conference and RSVP to [email protected]. Our next event is October 26th, 2017 at the Marriott Courtyard in Boynton Beach!

 

The views of this blog, podcast, and on this site in general are solely those of the authors, Matt Weaver (NMLS-175651) and Zack Lewis, and do not express the views or opinions of Finance of America Mortgage.