UPDATED, Feb. 3, 2020, 2:15 p.m.: Zillow Group is now a licensed corporate broker in New York.
It’s part of a national growth strategy in which Zillow is getting itself licensed from coast to coast.
“As we work to redefine how real estate is done, and create product improvements for consumers, brokers and agents on our platforms, we will be performing activity for which many states require a license,” said Viet Shelton, a spokesperson for Zillow, in a statement.
“In order to cover these new services, Zillow has been working to get traditional brokerage licenses across the country, even though we aren’t operating as a classic, traditional brokerage,” he continued. He declined to comment on the specifics of any new services.
It’s not the Seattle-based listing giant’s first brokerage license.
In 2018, Zillow got licensed in Arizona at the behest of regulators as it was rolling out its instant homebuying service, Zillow Offers, which uses Premier Agents to broker deals. In a letter to regulators that August, the company said it is not looking to cut brokers out of the transaction and would not be using its license to operate as a “traditional brokerage.”
The same year, Zillow’s then-CEO Spencer Rascoff announced the company’s acquisition of a mortgage brokerage. In an earnings call, Rascoff described the deal as Zillow’s push to evolve from a lead-generation platform into “an end-to-end provider on housing-related services.”
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Zillow has increased its instant homebuying activity over the past year under the leadership of its founder Rich Barton, who replaced Rascoff as CEO to lead the company’s iBuying charge. Late last year, Zillow launched its iBuying business in Los Angeles, which will serve as a test for the model in an urban market with high-end homes.
A source familiar with the company said Zillow seeking its corporate broker license across the country is driven by the goal of having “deeper conversations with consumers.”
Public records show that Zillow’s New York license expires in December 2021 and its broker of record is Doug Perlson, the founder and CEO of RealDirect, an online residential brokerage and listings consultant.
A source familiar with the matter said that Perlson was quietly hired in September as vice president of real estate strategy and operations at Zillow’s New York City platform, StreetEasy. The national company also bought the rights to RealDirect’s back-end agent tools and its direct-mail marketing business, and Perlson shut down the company that he founded in 2009. Perlson declined to comment.
Many in New York’s residential community have speculated that Zillow may get into the brokerage game. This fall, as StreetEasy mandated that users of its Building Experts program would pay the company a fee “based on industry standard referral arrangements,” one brokerage chief raised the question of licensing.
“If they are analogizing this to a referral fee, then it is a further instance of them taking the law into their own hands,” the CEO said in an email on the condition of anonymity. “Unlicensed persons or entities cannot receive real estate commissions in any form, including referral fees.”
Before Zillow obtained its license late last fall, StreetEasy announced it would no longer accept listing feeds from back-end platforms or brokerages.
Douglas Elliman and the Corcoran Group lambasted the change. In a December email to agents, Elliman said it was assessing its investment in StreetEasy and exploring “alternative marketing options.”
For months leading up to the announcement, the company was promoting manual entry. Notably, it required users of its Agent Spotlight program to manually input listing data.
The move prompted strong opposition from brokerage leaders who called the strategy “exploitative” and compared it to blackmail.
Write to Erin Hudson at ekh@therealdeal.com and E.B. Solomont at eb@therealdeal.com
Correction: This story previously stated that StreetEasy began mandating manual entry on Jan. 1, but the process with brokerages has been ongoing.