According to an article from the Friday, October 17 issue of Pacific Business News, Online Real Estate broker and information service Zillow is laying off 40 of it’s employees. Zillow brass say that the shrink is supposed to help the company weather the current financial crisis.
Admittedly, I don’t know what aspect of Zillows business was hurting. But as a blogger, I reserve the right to make wild, irresponsible guesses. So I’m going to take a swig from this ceramic jug marked “xxx” and doing just that:
In boom times some people feel as if they can’t lose, so they don’t always feel it’s necessary to work closely with a Realtor. Therefore, consumers tend to utilize “do-it-yourself” real estate tools and services in order to save a buck. Zillow offers some of these “do-it-yourself” options to consumers, including For Sale By Owner (FISBO) sevices.
When a market gets tougher, companies offering “do-it-yourself” services tend to suffer. People are nervous in slower markets and are more afraid of making a wrong move. They are afraid to do things themselves. They seek out more help from traditional Realtors in order to ease their anxieties about their transaction.
When Zillow started in 2005, the market was firing, and people were very keen on doing their own transactions. Perhaps the slowdown has affected them as it it tends to affect FISBOs? Leave your opinion in the comments…
October 21st, 2008 at 10:35 pm
I helped to launch a For Sale By Owner company in the Pacific Northwest in 2004, and have seen first hand the market conditions that allow a FSBO company to flourish.
When all you need to sell a house is a Yard sign, a contract, and a pen, these type of companies work. We helped a lot of people sell their properties until the middle of 2005–but once the amount of housing inventory in our market started to increase, and buyers had more houses to choose from instead of having to cut a check as soon as they saw a place that they liked, our business began to slow considerably.
Clients who were initially adamant about just advertising in the local paper and in magazines in an attempt to find buyers who were not working with real estate agents began to ask about putting their property on the MLS so that the buyers who were working with real estate agents would be able to find their property.
Gradually, after weeks and sometimes months without a showing, our FSBO clients slowly moved away from our company and started using realtors.
I left the FSBO company in mid 2006 because there simply was not enough business to support it.
If I were on Zillow’s staff right now, I would be spending some serious time on CareerBuilder.com…
October 24th, 2008 at 2:11 am
I am not a big fan of Zillow. If they need to reduce then the need to pull the trigger.
Aloha,
Keahi