New tech tools in the real estate industry will forever change consumer expectations, Zillow CEO Barton said on a company earnings call.
The COVID-19 pandemic has catalyzed a dramatic increase in reliance and adoption of technology across all industries and real estate is not different, Zillow CEO Rich Barton explained Thursday on a company earnings call.
But even with more and more digital technology, Barton doesn’t expect a big change to the role of the real estate agents as trusted consultants and the brokerage business model.
Barton was asked on the call point-blank if he sees the increased digital trends compressing commissions and changing the way real estate brokerages operate.
“The usage of software and technology in this industry is taking a great leap forward and that, of course, is changing the way we operate with our agent partners and the way brokerages themselves and the whole industry operates,” Barton said.
Commission compression, he explained, has been speculated for a long time due to digital trends, but Barton offered no further specific insight on what impact overall he thinks the trends will have on commission.
“We see agents adding real value as consultants to consumers, that is why we partner with them,” Barton said. “That is what [consumers] tell us they want.”
Barton’s vote of confidence for the company’s real estate agent partners comes roughly six weeks after the company revealed it would begin having its own agents manage its Zillow Offers transactions. Previously the company was represented by a licensed local real estate agent, through a brokerage partnership in each market, on both sides of the transaction.
Even with the change, the company has been clear that it still sees a role for agent partners in its iBuyer platform, as not every consumer is going to accept Zillow’s offer, turning that consumer into a warm seller lead for a partner agent.
Overall, Zillow is seeing increased shopping at the top of the funnel — the company reported record-setting traffic to its listings portal in the third quarter — and even more adoption of digital transactions at the bottom.
Zillow, in response, has invested money in things like virtual tours and remote notary services to better serve customers.
“Our customers are looking for more ways to reduce friction and we have rallied quickly to bring to market products and services that have been in research and development,” Barton said.
“These new tools are immediately relevant today and there’s just no going back,” Barton added. “They will change the expectations for new generations of buyers and sellers in the future.”