How come I am not getting calls when I list my condo for sale by owner on Zillow?
Well that's because Zillow is in the business of generating leads for real estate agents through their Premier Agent Program. They make their money off these leads via a price per lead or a referral fee. That's why even when you list by owner on Zillow all the showing request and offers are routed to an agent paying for the lead! Not you the owner.
Video explaining how Premier Agent Works...
How does this Zillow lead routing hurt you chances of selling your condo by owner?
The lead routing hurts you because if your goal was to avoid the commission by selling by owner you are now most likely dealing with a buyer's agent who was routed your potential buyer which means you will most likely end up paying at least half the normal listing commission.
Is Zillow important to list on by owner?
The simple answer is yes. This is because Zillow has by far the most traffic of any real estate site out there. So by not being on there you potentially miss out on being seeing by the best buyer for your property.
What is Picket Fence Preview and how/why did they try to stop Zillow's FSBO lead routing?
Picket Fence Preview is a website and magazine dedicated to listing Vermont for sale by owners. They offer customers the ability to list there property on their website and magazine for a small fee. They also market/brand the concept that all leads/calls will be directly routed to them allowing you to find a unrepresented buyer and thus avoid all the broker fees! Unfortunantly most owners need more exposure than just Picket Fence so they end up posting their property on Zillow which messes up the whole leads routed directly to you thing. So, Picket Fence decided to sue ZIllow to stop their lead routing practices.
Picket Fence sues Zillow... and loses:(
Real estate mega-website Zillow was recently sued in federal court, by local New England FSBO site Picket Fence Preview, Inc., claiming violations of the Lanham Act (prohibiting false advertising among others) and the Vermont Consumer Protection Act (VCPA). Picket Fence alleged that Zillow was using deceptive practices when they allowed For Sale By Owner (FSBO) properties to be “listed” on Zillow, in a similar way that Picket Fence allows homeowners to list FSBOs. Picket Fence argued that even though Zillow claimed this service was free, it was really not because local Zillow Premier Agents (licensed agents who pay money to have access to leads captured by Zillow) were able to pay to have their names and contact info displayed on the Zillow FSBO listing before the homeowners information. Picket Fence alleged that Zillow also made it more difficult and time consuming for the consumer to locate the actual homeowner’s contact information. Basically, when homebuyers are seeing FSBO homes on Zillow, they can use the contact button to be put in touch with a Zillow Premier Agent and not the actual homeowner. The complaint stated that “Zillow claims it is offering a service for free, but in reality is charging the Premier Agents so they can advertise on the website of those free ads and receive hijacked inquiries from deceived buyers.”
Picket Fence has not been successful so far in their case. Their original suit was dismissed and the recent May 2022 appeal was also dismissed with the District Judge stating that Zillow’s practices “do not preclude consumers from advertising with multiple FSBO listing services simultaneously. They do not foreclose access to Plaintiffs services or to the marketplace, nor do they allegedly cause consumers to pay higher prices. Accordingly, while Plaintiff plausibly alleges competitive harm to itself, it does not plausibly allege present or future harm to consumers or competition through a FSBO seller’s use of Defendant’s website.” The court also ruled that Zillow had not made any false statements in violation of the Lanham Act’s prohibitions against false advertising. Bill Supple, one of the co-owners of Picket Fence was recently quoted as saying that Zillow is using their monopoly power to hurt competition and consumers. Will Picket Fence appeal this latest decision? Only time will tell, but for now, Zillow is free to continue to operate as they have been.
What this means for selling your Vermont condo by owner?
In summary the loss to Zillow means that if you are looking to sell by owner you will most likely still have to work with a buyer's agent paying which means paying a fee of 2-3% or more.