Zillow To Offer Short-Term, “Non-Exclusive” Touring Contracts
The new touring agreements will last seven days and are a response to terms contained in recent commission lawsuit settlements.
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In response to landmark commission lawsuit settlements this year, Zillow announced Tuesday that it’s rolling out short-term “non-exclusive touring agreements” for consumers wanting to see homes — and calling on the industry to adopt such measures as the new normal.
Errol Samuelson
Zillow Industry Development Officer Errol Samuelson explained the concept in a blog post, saying the new agreements between consumers and agents will last for seven days. They will cover touring activities only, but will “not require compensation or exclusivity.” Samuelson said keeping agent pay and exclusivity out of the agreement was intentional.
“We believe any negotiation of compensation, and what it will look like for the buyer and agent to work together, should happen after both meet and feel ready,” Samuelson said. “At the time when an additional agreement is signed, the buyer and the agent should be aligned on all terms and expectations, including compensation, with no surprises.”
At another point in the blog post, Samuelson argued that having would-be buyers sign exclusive and long-term agreements early in the home-shopping experience — including in some cases before even meeting an agent — “feels premature.”
The move is a direct response to the proposed settlements in multiple commission lawsuits that the National Association of Realtors reached in March. Among many other provisions, the settlement will require agents who are members of their local multiple listing service to have written agreements in place with buyers before those buyers can tour homes.
That provision in particular presented something of a conundrum for tech-forward, fast-acting real estate companies. Today, many buyer agreements last months and include promises of exclusivity — something that’s seemingly incompatible with today’s one-click touring services that give consumers low-commitment access to as many homes as they might want.
Zillow’s new contract apparently aims to solve that problem by creating new touring agreements that don’t last as long or require the level of commitment that’s baked into many of today’s contracts. The company also believes that the contracts should meet the requirements of the NAR settlement.
Samuelson also directly referenced the lawsuit settlements in his blog post, saying that “since NAR announced its proposed settlement of the Sitzer | Burnett lawsuit in mid-March, there have been questions, speculation, and uncertainty.”
“But we must remember: change within the real estate industry is nothing new. When we work together, our industry is both creative and resilient,” he wrote.
Perhaps even more significantly, Samuelson also called on the rest of the industry to follow Zillow’s lead and “adopt a non-exclusive, limited duration agreement for the initial tours conducted by an agent with a prospective buyer.”
Zillow is also making its own newly minted agreement “available for use to the entire residential real estate industry.” The agreement is currently available as a PDF for free on Zillow’s website, and the company does not currently have any plans to monetize the offering.
Samuelson ultimately concluded his blog post by arguing that agents — who are a major source of Zillow’s income via lead generation programs — “provide value in the transaction.”
“Without an expert prioritizing their individual needs, buyers can miss out on making a competitive offer, leave money on the table in the negotiation, ignore potential pitfalls or waive important aspects such as inspections — which can end up costing them later,” Samuelson said. “Most buyers want and need an expert on their side — we don’t see that changing.”
Update: This post was updated after publication with additional details about the agreements.
