Against the backdrop of a booming housing market, Zillow is upping its fees for agents and for the first time will charge them to post rental listings.
As of Jan. 12, the Seattle-based listing giant is no longer syndicating listings from multiple listing systems. Instead, agents will be charged $9.99 per week to post rental listings, according to an email sent to agents.
“This encourages our rental owners and managers to remove listings promptly when they become unavailable or outdated, which helps us provide a better experience for renters,” Zillow said in a FAQ section of its website.
The move borrows from Zillow’s playbook in New York City, where StreetEasy began charging agents $3 daily to post listings in 2017. But it also comes at a time of heightened competition over rental listings from companies including Zumper and CoStar.
“They have a gazillion consumers looking at rentals on their site and they want to monetize that,” said Victor Lund, a partner at WAV Group, a real estate consulting firm. “It’s good for Zillow shareholders for sure.”
In a statement, Zillow said paid listings benefit consumers, who get more accurate listing data. The listings “usually spend fewer days on market than free listings because of increased lead volume and higher quality leads,” Zillow said.
In addition to the “Zillow Rental Manager,” which costs $9.99 per week per listing, Zillow is offering “Zillow Feed Connect” for enterprise clients that will cost between $1 and $3 per listing daily.
The listings giant has also implemented other changes recently. In September, it said it would start employing salaried agents to streamline its instant home-buying operation. Starting this month, Zillow agents will work with sellers in Atlanta, Phoenix and Tucson who want instant offers for their homes.
In conjunction with that announcement, Zillow said it would switch its back-end listing system to an IDX feed, instead of getting listings from thousands of brokerages and MLSs. (At the time, Zillow said the shift was set to reduce its data feeds to about 600 from 10,000.)
But it’s the daily fee for rental listings that risks alienating agents. That’s what happened when StreetEasy introduced a fee for rentals in New York, and then again when it attempted to raise the price to $6 per day per listing.
That fee hike hasn’t happened yet. After the onset of the pandemic in March, StreetEasy discounted its fees to post rental listings and to participate in Premier Agent.
During the third quarter of 2020, Zillow’s rental business popped as the overall housing market surged.
“The tide is so high that there is just more shopping demand everywhere and that includes rentals,” CEO Rich Barton said during an earnings call on Nov. 6.
For the quarter, Zillow reported $40 million in profits with revenue of $656.6 million.