Real estate listings service Zillow has purchased Trulia for $3.5 billion in stock, the companies announced in a joint statement. What does this mean for the industry?
The local associations of realtors and the MLS companies who have feasted on having realtors paying dues regardless of production will suffer - and should die off completely if 20% of the realtors are doing 80% of the business. They can't survive an 80% reduction in dues.
When consumers see that their agent-friend down the street hasn't sold a house in six months - they will hesitate. The Zillow advertising will encourage you to select one of their top producers instead (the ones paying for advertising).
The combined company will maintain both the Zillow and Trulia consumer brands, offering buyers, sellers, homeowners and renters access to vital information about homes and real estate for free, and providing advertising and software solutions that help real estate professionals grow their business.
Both Zillow and Trulia are primarily media companies, generating the majority of revenue through advertising sales to real estate professionals. Despite continued growth as public companies, significant opportunities of scale remain as the majority of advertising dollars in the real estate sector have yet to migrate online or to mobile. For example, the two companies' combined revenue currently represents less than 4 percent of the estimated $12 billion real estate professionals spend on marketing their services to consumers each year.