The Real Deal New York

They first targeted the brokers. Now Zillow’s looking to make a buck off developers

Company didn't publicize monthly fee
March 21, 2018 10:21AM

Spencer Rascoff

Zillow Group has quietly started charging builders and their agents for listings that were previously free on its website, causing some agents to worry what revenue stream the company may try to tap next.

Homebuilders, or their agents, with 150 closings per year or more are required to join Zillow’s Promoted Communities program, Inman reported. Under the program, the builder must pay a monthly fee to have listings from MLS and elsewhere appear on Zillow’s sites, which include Zillow.com and Trulia. The prices vary by location.

“I think it’s an unsurprising move from Zillow,” global real estate tech expert Mike DelPrete told Inman. “Especially with other revenue lines slowing in growth (Premier Agent, mortgages, display advertising), Zillow will need to find new revenue streams.”

Zillow publicly announced the launch of the Promoted Communities program in October 2016, but the additional fee wasn’t part of the statement. Texas-based agent Ben Caballero, who syndicates 600 listings per month from 64 builders, said he didn’t realize that Zillow had made the change and that his clients’ listing weren’t appearing on the company’s websites as a result.

“It’s a moneymaking scheme by Zillow to increase their income. There’s nothing wrong with that. If you’re going to do that, say you’re doing that. But they didn’t,” Caballero said.

Zillow said it’s continuing to reach out to builders and agents individually about the change.

The company has been increasingly aggressive about monetizing its various advertising programs. Last year, it topped $1 billion in revenue for the first time, largely on the back of its Premier Agent program. The company’s market cap crossed the $10 billion threshold for the first time in February.

A report from Deutsche Bank in August estimated that Zillow could bring in an additional $86 million over the next two years through StreetEasy’s version of the Premier Agent program. [Inman] — Kathryn Brenzel