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Zillow Non-Exclusive Touring Agreement A Non-Starter

By
Real Estate Agent with Compass | 1313 14th St NW DC 20005 Licensed in DC & VA

Zillow Introduces Non-Exclusive Touring Agreement Hoping Agents Will Work Free To Support Them

This week, Zillow published a 'non-exclusive touring agreement' for home buyers and agents, with the suggestion that the real estate industry adopt it as a model for such agreements nationwide. It guarantees that agents will not be paid for consultation with buyers regarding specific properties, and assisting buyers in locating and touring properties. The agreement also states: 

  1. "In connection with providing the Touring Services, Broker shall adhere to any and all non-waivable duties required under applicable state law for real estate brokers working with a consumer in a non-agency capacity."

The term of the agreement is 7 days. Buyers are free to sign as many of these agreements as they like, concurrently or at the same time, with countless agents--potentially touring homes for weeks, months, years, without ever making a commitment to the agents whose time, efforts, tools, work product and costs they're wasting.

In addition, 'consultation with buyers regarding specific properties' is exactly the type of work product that requires an agency agreement. Without it, buyers receive no protections (loyalty, confidentiality, fiduciary responsibilities, etc., and the agent has no liability protection. Procuring cause can become an issue. 

Oddly, the agreement also provides a line for an 'individual agent' to sign on behalf of the broker/brokerage, but no signature line for the managing broker. Are they suggesting agents sign these agreements without sanction from their brokerages?

Why did Zillow create such an agreement? 

Self preservation.

Zillow's core brand targets residential real estate buyers, and its secondary product targets .agents who purchase buyer leads and/or advertise on the site. A whopping 78%+- of its business relates to its residential real estate marketplace.

The NAR settlement is expected to impact buyer agents in particular, with many struggling to incorporate signing of an agency agreement into their practice and holding buyers responsible for commissions. Agent numbers are expected to drop, as part-time and less successful agents can no longer justify rising dues, fees and expenses with falling revenue. Many agents are expected to see some reduction in commission rates, at least initially, as home sellers and buyers adjust to the new normal.

If there are fewer agents to target, Zillow's revenue and growth potential suffer. If commissions drop, some percentage of agents who previously budgeted for Zillow leads and ads may reduce or eliminate the expense, leading Zillow's revenue to plummet.

Zillow is already unprofitable

Is The Non-Exclusive Touring Agreement Helpful?

No.

At a time when our industry is under fire from many sides, the DOJ is considering further action against the NAR, public perception of agents and brokerages is low, and many are calling for the real estate community to strengthen its best practices and demonstrate value, this move by the corporate giant that has spent a decade + devaluing agents and brokerages is the exact opposite of what is needed

With this agreement, Zillow again puts its self-interest ahead of the real estate community, devaluing agents and the valuable work they perform, without offering anything of value itself.

Agents should not be asked to work free of charge, perform services that cross the line between customer and client, incur additional liability, and/or sign agreements without the co-signature of their brokers. This practice would only serve to further undermine the credibility and value of real estate agents and brokers, bolster the segment of the real estate community that weakens it in the eyes of the public (and the DOJ), and blocks true progress in demonstrating our value.

Here's our take.

Posted by

Susan Isaacs, Realtor

The Isaacs Team LLC

Partnering With DOMO

Compass

1313 14th Street NW DC 20005

Find us at:

realestateinthedistrict.com

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Copyright - All rights reserved The Isaacs Team LLC

Comments(12)

Michael Elliott
Fathom Realty - Burlington Township, NJ
Burlington, New Jersey Residential Sales

I really don't care what my competition does, especially when it has zero impact on me.

 

May 03, 2024 06:26 AM
Michael Jacobs
Pasadena, CA
Pasadena And Southern California 818.516.4393

Hello Susan - next to the weather, real estate seems to consistently provide a start to conversation.  And this news is additional evidence that the chatter will continue for a long time. . .  

May 03, 2024 06:40 AM
Candice A. Donofrio
Next Wave RE Investments LLC Bullhead City AZ Commercial RE Broker - Fort Mohave, AZ
928-201-4BHC (4242) call/text

"Pop Tart Agreement" LOL

May 03, 2024 06:43 AM
Kathy Streib
Cypress, TX
Home Stager/Redesign

Hi Susan- you've provided some good thoughts on the Zillow Non-exclusive Touring Agreement. 

May 03, 2024 06:11 PM
Kathy Streib
Cypress, TX
Home Stager/Redesign

May 04, 2024 06:55 PM
Andrea Bedard
Thompson Company, REALTORS® 240.593.2860 - Silver Spring, MD
Fluent in Real Estate & German, M.A. ABR ASP CIPS

Hi Susan, our state association has informed us that the "touring agreement" does not comply with Maryland law. They have been so great in keeping us updated! 

Specifically, under the Maryland Brokers Act, showing a home is “providing brokerage services,” which may only be accomplished by entering into a written “brokerage agreement” that establishes the “brokerage relationship.”

Also, a "touring agreement" completely misrepresents what we actually do. We are not just door openers. Every showing brings with it a discussion of the home, comps, and other listings, what it would take to write a competitive offer, the market in general etc. You are right, Z may just be scrambling to stay relevant. We all should charge for allowing them to display the data we've collected on their website! 

May 05, 2024 07:48 AM
Susan Isaacs | DC Real Estate Consultant

Exactly. Agree! 👍

May 06, 2024 03:23 AM
Eileen Burns 954.483.3912
Trans State Commercial Realty Inc. - Fort Lauderdale, FL
FLorida Real Estate Connector

Florida is talking about a Showing Agreement prior to executing a Buyer's Broker Agreement.  Crazy.  Good thing we have choices to say NO

May 05, 2024 08:03 AM
Michael J. Perry
KW Elite - Lancaster, PA
Lancaster, PA Relo Specialist

I think this is an overstep usurping   the Broker of Record sole authority to determine what is permitted in THEIR Office ! …

May 05, 2024 08:04 AM
Dorie Dillard Austin TX
Coldwell Banker Realty ~ 512.750.6899 - Austin, TX
NW Austin ~ Canyon Creek and Spicewood/Balcones

Good morning Susan Isaacs | DC Real Estate Consultant ,

Thank you for getting this out there. We've been reading about this and I feel it's Zillow's desperate attempt tp try and get back some profitability in their sinking ship!

May 05, 2024 08:10 AM
Silvia Dukes PA, Broker Associate, CRS, CIPS, SRES
Tropic Shores Realty - Ich spreche Deutsch! - Spring Hill, FL
Florida Waterfront and Country Club Living

Why would I be using one of their forms?

 

May 06, 2024 12:01 PM
Susan Isaacs | DC Real Estate Consultant

Right!

May 07, 2024 12:14 PM
John Juarez
The Medford Real Estate Team - Fremont, CA
ePRO, SRES, GRI, PMN

My understanding is that an agreement between a buyer and agent that includes the details about the agent's expected compensation must be signed PRIOR to touring a home. 

The Zillow agreement is problematic in that regard.

May 06, 2024 02:56 PM