Real estate agents & auctioneers
When a company is valued in excess of a billion dollars, it carries weight in its industry. So it is with Zillow, launched in 2006 to serve as an online database of homes to help sellers find buyers and buyers find homes. But Realtors now accuse the company of breaking its longstanding promise not to compete with them after it introduced a new program connecting buyers and sellers direct. They also say this program will cost homeowners millions in equity.
Real estate agents see this as a fight for survival. More than 22,000 signed an online petition in its first 14 days online demanding that Zillow discontinue the program. They say that Zillow, a company they empowered and trusted, is taking advantage of them.
Auctioneers found this out years ago. The real estate community is just finding it out. What is remarkable, some of the same wording auctioneers used back then is now being used by these real estate agents.
“They say that [Zillow,] a company they empowered and trusted, is taking advantage of them.” Yep — auctioneers heard how many times that, “We won’t compete against you.” when later those same companies did just that.
I’m trying to remember … Blue-something selling [or trying to sell] J.K. Rowling’s boots? Soon after that same company started to help sellers and buyers connect without the very auctioneers who built their company; this set the stage for other online auction companies to do the same.
The real estate community is taking a stand — citing that [Zillow] “promised” but I doubt it will be successful unless Zillow fails to attract inventory. Without real property, Zillow has nothing to sell, even with all this buyer and seller data, and its app on nearly all phones held by the younger generation.
Real estate (real property) is not mobile, and is local in nature. What is the best market for your home? Your local market. This makes putting the home in a world-wide database somewhat less advantageous than putting personal property on a similar platform.
I’ve written numerous times about issues with online auction platforms (actual and fictitious) including:
There seems to be very little that auctioneers can do at this point; there may be very little real estate agents can do as well. The lesson? Be cautious about partnering with anyone. What is the arrangement? Who owns the data? Are promises made by either party in writing? Is the partnership expressly … contractually agreed upon?
Lastly, even contracts are breached, and for enough money that breach of contract can be prudent for the far more powerful party. Therefore, even the best comprehensive written contract may not be worth much more than the paper it’s written on in these types of situations.
Possibly the only contract we as auctioneers could implicitly trust would be with essentially ourselves (similar to NAR and the system of local MLS databases) … and that might start with our own national trade association. We need to remember these online auction platforms have had no issue with “competing” with us, so we shouldn’t have any hesitation reciprocating.
Mike Brandly, Auctioneer, CAI, AARE has been an auctioneer and certified appraiser for over 30 years. His company’s auctions are located at: Mike Brandly, Auctioneer, RES Auction Services and Goodwill Columbus Car Auction. He serves as Distinguished Faculty at Hondros College of Business, Executive Director of The Ohio Auction School and Faculty at the Certified Auctioneers Institute held at Indiana University.