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Why Zillow and Trulia Don’t Matter Today

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As the market turns from finding buyers to needing sellers, competing with real estate listing portals shouldn’t be the focus.

Let’s start by stipulating two arguments: First, that every listing needs a buyer. Second, that most buyers find the home they bought on the internet. We might even throw in a third truism in real estate: a powerful web presence can bring in lots of business for most real estate brokers. All fine and well.

Except for one thing: the market.

It’s true that most buyers today find their homes on the internet. According to NAR Research:

It’s also true that buyers like to use major web portals to do search for those homes. By and large. Yet the fact remains that most real estate remains local (most buyers moved less than 15 miles last year) and that local brokerage website remain more-than-capable of capturing that buyer traffic. See the broker-revolt against sharing listings with major portals as market evidence of this fact (more here and here). And while there will always remain a large, soft chunk of the industry that prefers to outsource its buyer marketing and lead generation to third parties, Zillow and Trulia will hum along nicely for some time to come.

None of which really matters, today. Because it’s not a buyer’s market any more. It’s a seller’s market.

That’s because today, the game isn’t finding buyers but capturing sellers. For lots of reasons – investors, artificially low interest rates, strangling foreclosure laws – the nation is suddenly facing an inventory shortage in housing again. Builders are actually building new homes at record paces again in major metros across the country. Bidding wars are back. Housing prices are rising. Call it a bubble, as we do, but it’s here and it exists…

… and your marketing plan had better deal with it, for the foreseeable future.

That means temporarily putting aside the usual “how do we compete against the portals” strategy and designing a strategy to encourage consumers to bring their homes into the marketplace. To move up, move down, or relocate. To encourage sellers whose balances have just slightly bobbed above water to take “even” for a price and move on with their lives. Less concern about getting Gen Y to move out of the cellar, and more concern with bringing properly sized and priced inventory to attract them out into the market.

Besides: without inventory, what are you going to put into your Zillow-Trulia-competing website anyway? Your competitors’ inventory? Nah: You probably won’t co-broke your way to financial success in the real estate industry. You need listings.

So, what should your marketing strategy be focused on, for at least the next 6-12 months? Building trust and relationships that encourage sellers to notice, hear and agree with your message to bring their homes onto the market sooner, rather than later. Which means using entirely different tools. Again, some research to start:

Translation: The primary way sellers found their agent was through relationships. Friends, family, referrals – all human sources of information. All built around trust, not hits, and four times more effective than a web page. Your marketing plan must focus on relationship-building techniques. Phone calls, if you must. Luncheons, if you have time. Emails, if you like. Social media, cannot be denied. More content, more stories, more videos. Not about bedrooms or baths or even prices – but about trust and knowledge and market reality.

It also means using technology for the right reasons. Maybe worry a little less about how your website looks on a tablet, and more on how it helps agents with a tablet to build relationships. Evaluating your social media and e-newsletter content to engage with, discuss, explore, not just inform. Not what’s new, for sale, reduced in price, but asking, listening, advising.

Today’s marketing plan needs to be more relationship focused than distribution focused. A few strong relationships can generate plenty of new inventory, as our friend Angela Galvin reports happened right on her Facebook page.

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As the result of a positive social media testimonial – built from a strong relationship – from a satisfied client, Angela generated four listings and five referrals.  Smart real estate agents need to use technology to make relationships happen, not just advertising. Less ads and more likes. Fewer clicks and more connections.  Their marketing plan has to encourage inventory, not just awareness. And the primary source of new listings continues to be people, not portals. 

So, ramp up your personal contacts (any way you’re comfortable doing it). Anchor your prospecting efforts on leveraging relationships. Focus your discussions on building rapport. Rebalance your marketing efforts according to the market forces, which means getting the inventory before worrying about how to promote it!

  • davabehrens

    So… what you’re saying is what matters is the quality of the work we do, the knowledge that we share with our customers and the relationship(s) with have with other people… the other stuff is white noise (static)… It seems to me that really applies to any market.

  • http://www.RETIUniversity.com/ RETI University

    Great article as always Matt

  • http://www.matthewferrara.com/ Matthew Ferrara

    Thanks!! Hope you can use it to help others in the industry too!

  • http://blog.mdsuburbanhomes.com/ Ken Montville

    I like the concept. You’re right on the money, too, about Trulia and Zillow being buyer-centric. They come into play for listings when you tell someone that their home is going to be all over the place so that every buyer in the known Universe will know there house is for sale.

    Believe it or not, I’ve actually seen one of the two (I forget which one) try to position themselves as a place to find sellers. Go figure.

  • http://www.matthewferrara.com/ Matthew Ferrara

    Well, yes, but also a little more. Why in saying is that Too many real estate agents and brokers are still obsessed with the listing portal/syndication marketing challenge. But the market has moved on. They need to be assessed with getting inventory, which means a marketing strategy focused on relationships and trust, distribution. For example social media, email, even the telephone, as opposed to Search engines, Facebook a advertising, and Page likes.

  • http://www.matthewferrara.com/ Matthew Ferrara

    Obsessed not assessed! ;)

  • davabehrens

    Yes!

  • http://www.granthammond.com/ Grant Hammond

    I see your point and can appreciate it. However, there are several industries who felt the same at one point and now they are no more…stock brokers, gas pump attendants, insurance sales, steel workers, consumer electronics (home phones, personal cameras, etc) and so on. We are fooling ourselves if we believe houses are not anything other than a commodity and the knowledge/skill to locate, contract and close them is replaceable. Yes, we are excellent at facilitating that process, but don’t get too comfortable with companies like Zillow beginning to run mass commercials that cut the real estate agent completely out of the process…

  • http://www.matthewferrara.com/ Matthew Ferrara

    Hi Grant. Thanks for your comments, and I do appreciate your point. However until Zillow and Trulia start actually listing homes, we really don’t have anything to fear. Now having said that, I believe one of them actually holds a brokers license in many states… So you can expect that that’s definitely in their plans.

  • http://FlanaganRealty.com/ Jim Flanagan

    Matthew, I believe you said it before, “all real estate is local”. Unless Z & T franchise out into every market area, and train their telemarketers into “prospectors” (there’s a post for you), the brokerage with the most listings wins (in any market). That truism has not changed and will not change in our lifetime. Like your old friend, Mike Ferry, once said, “do you want to be an employee or an employer?”

  • http://www.granthammond.com/ Grant Hammond

    Let’s be honest, how difficult would it be for Zillow to buy an existing brokerage? Or, how tough is it really to create a real estate company and franchise? The barrier to completing the next step is not very high and it is something, we as agents need to contemplate. I completely agree that Zillow/Trulia are not major competitors are the moment, but the real question here is why are we giving them our data for free??? Better yet, why are we giving them our data and not preventing them from using it against us? Why don’t we have them sign a non-compete? We don’t we have guidelines set on how they can use this date to market to 3PLs? This seems ridiculous in 2013…

  • http://www.matthewferrara.com/ Matthew Ferrara

    Grant, I completely agree. I fully expect both parties to get into direct brokerage in every state, if for no other reason than to assure they can have access to the data feeds from MLS. Why do we give them our data? Lots of reasons come to mind: Many companies are unwilling or unable to promote their own listings on their own, and reach large markets; many companies don’t read the research that shows most moves are less then 15 miles apart, so they mistakenly believe they need “national” presence; many companies will just “follow the crowd” and do what everyone else is doing (heck, they’ve been giving 1/2 of their compensation to other agents via MLS, regardless of competence or quality, just because everyone else does so, for years!). In other words, too few brokers and agents have as solid business plan that keeps THEM in control of their listings, PR, marketing, inventory/product and message. So they’re really just “Lucky Strikers” rather than “Purposeful Professionals”. And that’s the space that Z/T moved right into, capturing the customer’s fascination before brokers did….. Eventually, it will get messier, but for now at least, it’s why I say: LONG LIVE THE POCKET LISTING!!! :>

  • http://www.granthammond.com/ Grant Hammond

    Indeed. With the advent and mass Realtor adoption of IDX, I see no reason for Z or T or Realtor.com to even exist. Time to make some changes.

  • http://www.matthewferrara.com/ Matthew Ferrara

    Aha! I agree as well! A “Napster” style of peer-to-peer sharing would be best, but that would challenge a fundamental element in the business, too: MLS. Why do I have to agree to cooperate with EVERYONE who just pays to become a member – and to share MY content with them, too? There’s a much bigger change that needs to occur – and it is, I think as more and more companies leave the “family” and just use technology to compete on their own. And their margins are so much healthier!

  • http://www.granthammond.com/ Grant Hammond

    At least they are licensed and are held accountable by the Realtor Code of Ethics. There are checks and balances to ensure fair play and respect. We have none of that will Z & T & R.com…

  • http://www.matthewferrara.com/ Matthew Ferrara

    True; but at the end of the day, you’re still asking brokers to give up an awful lot for the “fair play” of the COE. And licensing Z&T might be a double edged sword, because that’s going to give them access to both your commission directly, AND your marketing budget…. oh oh! :>

  • http://www.granthammond.com/ Grant Hammond

    Exactly my point as to why we should to stop syndicating to them now…

  • http://www.matthewferrara.com/ Matthew Ferrara

    Yes. Well, the good news is that some companies have – and big ones (Shorewest, Edina, etc) – but I’m afraid it’s not enough. If we could get a KW or REMAX or Realogy to make such a change, it would immediately vaporize their existences. And all that traffic would flow nicely and quickly to brokerage sites who were on the ball. Markets hate a vacuum. But all of this would take some STRONG DESIRE on the part of brokers to reassert control over their destiny, to compete! And right now, most brokers are just sighing a small sigh of relief with the market upturn, and have’t gathered their strength for a new big fight. Alas, the path of least resistance might become the “resistance is futile” road for so many of them….

  • http://www.granthammond.com/ Grant Hammond

    Or pull a Denver Metrolist! That may be the path of least resistance.

  • Bill Fowler

    So we should only research improved flu vaccines during flu season?

  • http://www.matthewferrara.com/ Matthew Ferrara

    If you’re not already inoculated against the big listing portals, then you’re pretty much infected… If we use your metaphor! My point isn’t to ignore them, simply that in a sellers market they shouldn’t be the center of your marketing strategy. Yet all too many agents and brokers are still running around worrying about listing portals and missing the signals of the market.

  • http://homeloanartist.com Brad Yzermans

    I still like building trust, credibility, and authority with Google
    and believe it is more effective than one-on-one relationship building. I find that it is much more reliable than people when it comes to referring me business and helps me avoid those roller coaster type situations.

    I’m not saying ignore your SOI, farming, or networking, keep doing that, but how
    much more credible are you if you have a site that ranks higher than T
    or Z for all keywords related to your farm? It’s not difficult.

    The problem is 99% of the agents have such poor websites that never get
    found (no traffic) for any searches online, have no clue on how to
    convert online, thus they think it’s impossible to attract sellers
    online.

    85% of all my closed deals come from local
    organic search and I’m launching a new local real estate site that will
    be able to generate enough buyers and sellers to close at least 25-35
    deals a year…all organic…..no PPC at all.

  • http://www.matthewferrara.com/ Matthew Ferrara

    Sounds like a very interesting approach! I’m not sure that most agents would necessarily be able to duplicate that, however it does reinforce that there are many viable ways other than worrying about Zillow and Trulia to grow your business! Thanks for your comment.

  • Bill Fowler

    Infected. Love it. I’m in the “keep the broker at the center of the transaction” business. Sort of local Zillows for MLSs. More at solidearth.com.

    Anyway, I get a lot of heads in the sand regarding Zulia. I can imagine it’s how rooms full of travel agents reacted when Expedia went online. Part of my value prop is to show how Zulia isn’t in the real estate business, they’re in the disintermediation business. (See: Expedia).

    I think you’re right about the market-flow validity of these portals and how brokers can insulate themselves, but in the long run, the broker better understand where he/she fits in a universe where a national non-R brand is the Wal-Mart and they are the local mom and pop. That time is upon us and it’s not a market condition. It’s the new reality.

  • http://www.matthewferrara.com/ Matthew Ferrara

    Agreed!

    – Matthew

  • Jay Campbell

    Hi Matthew! Love your content and fresh views. The RE vertical needs them. I agree with much of this article but I also encourage balance. The market is already (in most coastal pop centers) starting to swing back with more people listing their homes and inventory freeing up. This is/was needed especially with the TOO FAST appreciation occurring in many desirable markets. My overall point- increasing Social Relevancy is HUGE (as you continue to point out) but ignoring your PMA on sites like Zillow and Trulia is a mistake. Zillow’s Unique Visitation is off the charts in the last 3 months and Trulia’s Mobile Platform also offers some inherent advantages Zillow’s local program does not. The strategy should always be three fold-increase Social and Digital Media Relevancy-farm and re-market to your Database and BUILD BRAND on the sites with the most amount of eyeballs. Obviously all of this is respective to an agents marketing budget and current Brand strategy.

  • Jay Campbell

    Well said Bob. Most agents struggle to type cogent written sentences. If they can’t do that, how are they going to “build their brand” across the web? ;)

  • Lupe Robles

    Spot on again Matthew! I convey to our agents that the relationships they build will build their business. In 2014 “Word of Mouth”= Social Media.

 
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