The Acquisition of FollowUp Boss by Zillow: A Disheartening Blow to Real Estate Agents

 

In the ever-evolving world of real estate, where technology is reshaping the industry, news of acquisitions and mergers can send ripples of excitement or trepidation through the community. One such acquisition that has caused significant turmoil this week is Zillow's purchase of FollowUp Boss. There are some that feel this is a positive development, primarily those this acquisition benefited the most. However, there are many compelling reasons why this acquisition may not bode well for real estate agents.

Here are Six good reasons this deal may not be beneficial for Real Estate. 

1. Zillow’s increased competition with Real Estate Brokers and Agents

Competition is the lifeblood of any industry, including real estate. Zillow, since the beginning, has professed they would never be in competition with Agents. Their actions through the years tell a starkly different story. They own a Mortgage Company and Dot Loop; they are a directly competing Brokerage; they have a long history of manipulating lead costs and programs; their absolute terrible iBuyer program went down in flames based upon their failed “zestimate” algorithm. Now they have acquired FollowUp Boss, one of the key players in the real estate tech market. Don’t worry, they say, your data is safe, and we will never do anything to jeopardize the independence of FollowUp Boss. Based on their history, I have serious doubts. When competition diminishes, there's a risk that innovation could suffer. Fewer options for real estate agents mean less incentive for companies to develop and improve their products and services. Agents, as a result, may find themselves with fewer choices for tools that can enhance their business.

2. Potential Monopoly

With Zillow's acquisition of FollowUp Boss, they further cement their position as a dominant force in the real estate tech landscape. This dominance may enable them to control or manipulate market trends, data, and pricing structures. In a market that relies heavily on data and analytics, this level of control could put real estate agents at a disadvantage, potentially leading to skewed market dynamics and pricing models that benefit Zillow rather than the agents themselves.

3. Loss of Independence

Real estate agents value their independence and their ability to choose the tools and services that best suit their needs. With FollowUp Boss now under the Zillow umbrella, agents may experience a shift in control. They may be pressured or incentivized to use Zillow's suite of products and services, reducing their ability to make independent decisions about the tools they use to manage their businesses.

4. Data Privacy Concerns

The acquisition of FollowUp Boss by Zillow raises questions about data privacy and the handling of sensitive information. Real estate agents deal with a wealth of personal and financial data about their clients. The consolidation of these data sets under a single entity like Zillow may lead to concerns about data security and how that information is used.

5. Pricing and Fee Changes

Real estate agents often work on tight budgets, and many rely on affordable technology solutions to stay competitive. With Zillow's history of pricing model changes, there's a concern that the cost of using FollowUp Boss and other related services may increase over time. Real estate agents may be faced with unexpected fee hikes, making it more challenging to manage their overhead costs.

6. Influence on the Market

Zillow's prominent position in the industry allows them to influence market dynamics in various ways. They can manipulate lead generation, traffic to listings, and search algorithms, which may not always align with the best interests of individual agents. This could further reinforce the shift of power from agents to technology companies.

In summary, the acquisition of FollowUp Boss by Zillow is a development that may not be in the best interests of real estate agents. The potential consequences, such as reduced competition, a possible monopoly, loss of independence, data privacy concerns, pricing changes, and market influence, all raise significant concerns for those working in the real estate industry. While the full impact of this acquisition remains to be seen, real estate agents should remain vigilant and consider alternative options to maintain their autonomy and adapt to these changes in the industry.