Most buyers and sellers do not realize that Zillow busts agent marketing budgets. Let’s explain what Zillow is and what they do.

Zillow Busts Agent Marketing Budgets

What is Zillow?

Zillow is an online portal that collects leads from buyers and sellers by displaying property information from the MLS. They made their mark by offering the Zestimate which was an online value generator for homes across America. Homeowners were intrigued by the Zestimate because it was a way for them to track their home value over time. It wasn’t always accurate, but that didn’t matter. It was exciting.

Later on Zillow got into the homebuying business and bought homes to flip. They later discarded this business because they admitted they were unable to accurately predict a home’s value, nor the future direction of a home’s value. So now they pretty much stick to selling leads to agents.

How Zillow Busts Agent Marketing Budgets

Zillow collects a fee on every transaction for agents in their Flex program. The fee in the Cape Coral/Fort Myers area is 40% on homes over $300,000. It is 35% between $225,000-$299,000. Most home sales in Lee County are above $300k. What this means is the agent or team pays 40% of the listing side commission to Zillow first. Then, they must split with their broker. If there is money left over, they may have money to pay employees, rent, signs, phone, internet, gas, car, etc. Then there is advertising. If an agent is paying 40% off the top to Zillow, and another 10-50% to their broker, this isn’t much money left for advertising a home, or for buyers.


 Agents become dependent on Zillow for everything. They receive buyer and seller leads, and they have little to no money left over to acquire leads or advertise in other places. Zillow has another program called Zillow Premier which allows agents to pay a monthly fee. I know some agents paying $20,000/Mo for this program. They avoid the high referral fee on each transaction, but again the money is sucked up by the monthly spend. The agents become dependent on Zillow for leads because so much of their budget is tied to one source. To be fair, there are other agents paying $5,000/Mo or less, but they get even fewer leads that way.

In the Way

All Zillow does is get between the agent and the transaction. Zillow is not alone, there are other online portals like, etc. Each of these charges leads back to agents in some form or fashion.  What if that money went to advertising a home instead of online portals like Zillow?

Who is to Blame?

Zillow is in business to make a profit. Some agents like the easy button where they acquire leads to work on for a price. Some agents don’t have or maintain a client database. They are transactional agents. They love working the deal, but then that’s it. Relational agents like to keep in touch or hold client events. It’s more of an ongoing relationship versus a one and done transaction. Consumers do not know the business and they like some of the features of Zillow. They don’t realize many of those features are available in other places. Other sites may have even better features, but Zillow spends so much advertising themselves that consumers find their way there. Zillow bids up the keywords and consumers click on the first link they see in some cases. So, nobody is to blame, and yet look at who benefits.

We Do Not Advertise on Zillow

The Ellis Team quit advertising on Zillow years ago. Our website has some better features and and we prefer to spend our advertising dollars on our clients and our clients homes. I am sure there are some very successful agents who still advertise on Zillow. We choose not to. Zillow’s success makes no difference to us as we do not use them. We do not blame other agents who do. We just want consumers to realize where their commission dollars are going and decide for themselves whish way is best for them to buy or sell.

Always Call the Ellis Team at Keller Williams Realty 239-489-4042 We’d love to talk to you about how we advertise your home and get Top Dollar. We’ve been voted the Best in Real Estate for 11 straight years by News Press readers.

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The number one question real estate agents get asked is “How is the market?”  Often, people wish to know what it means, and how we’re doing against other parts of the state, especially nearby counties.  Today we’ll look at Fort Myers-Cape Coral home sales versus Naples and Florida real estate sales to get an idea.

Fort Myers-Cape Coral Home Sales Versus Naples and Florida Real Estate Sales

In March, Florida home sales were unchanged and median prices were up 2% over last year.  Year to date numbers tell a similar story.  In Fort Myers-Cape Coral, home sales were down 4.4% in March while median prices were down 3.7%.  These are continued signs of a shift occurring in our market.  Year to date numbers show home sales down 8.5% while median prices rising 1.4%, but we think median prices will reflect lower numbers going forward.

Naples homes sales were down .4% in March while median home prices were down 7.9%.  Year to date numbers show closed sales up 1.1% and median prices down 7.7%

Because these numbers reflect year over year numbers, many customers, and agents alike don’t understand what’s been going on in the market.  When a market begins to shift, it takes up to a year for people to see it in the numbers, even though the trend has shifted.

Market Shift

For instance, the Fort Myers-Cape Coral market began shifting last Fall, but because we compare year over year numbers people didn’t see the negative numbers until now.  Agents felt it as sales slowed and listings began to expire.  Seasoned agents knew and adjusted.  The sellers that listened to their seasoned agents got out and the ones that didn’t listen, or weren’t working with a seasoned agent who’d been through a shift before could still be on the market or expired.

Perhaps we’ll do another story about invisible inventory.  Invisible inventory refers to the old saying that if your home is priced over the market then it’s not really on the market.  It’s overpriced and won’t sell.  It’s invisible to buyers because it’s attracting the wrong buyers.

So, what are sellers to do in a shifting market?  They could wait it out.  Some sellers decide to wait a few years until the market recovers to a price they like.  The thing about that is they miss out on low interest rates today if they’re financing their next home.  And, while they wait for their home to go up in value, their next home is probably going up too, so they don’t gain anything, only lose.

Sellers could try to sell themselves and save the commission.  This rarely works out as only 4% of lookers can actually buy now.  We have a free report on how to sell your home without an agent should you like to try.  It’s packed with helpful tips, so just email me and let me know

Sellers could try a discount broker.  Problem is, you can’t save your way out of a shift.  I can’t tell you how many homes we’ve listed and sold after a seller has tried the discount route.  You might as well try it yourself than pay an agent for little to no service.

Marketing Matters

Marketing matters now more than ever.  Like we’ve said, just listing a home on 100 websites isn’t marketing.  We have a database of thousands of buyers because we market so much.  Call us and we can see if we have a buyer right now looking in your neighborhood.  Chances are we do, and we can do an instant search to see who they are.  If not, our marketing creates buyers specifically for our listings.  Let us show you how we use cutting edge technology and marketing muscle to market your home.

Call Brett or Sande Ellis 239-489-4042 Ext 4 You’ll be glad you did.  Or go online to get an instant estimate of your home’s value.

Good luck and Happy Selling!