Today I’ll spell out the problems with giving out your personal information to referral networks like Zillow, Trulia, Realtor.com, and other real estate-related data services.
The first reason you shouldn’t hand out your information to the likes of Zillow or Trulia is that they’re in the business of data collection. Imagine that you’re perusing Zillow, looking for a home that you’ll love at first sight.
From the moment you’ve found that home and volunteered your information, Zillow is selling your information behind the scenes to as many as five agents. Before long, your phone is ringing off the hook simply because a listing’s pictures caught your eye.
Secondly, some sites charge agents enormous referral fees. According to their pitch, if you click a button and provide your information, they’ll put you in contact with one of the best listing agents around. Actually, many of these sites will send you to not one, but three agents, and they’ll charge each of them an estimated 35% referral fee. Meanwhile, you’re none the wiser.
Now, you might be wondering, “How does this impact me?” Let’s say you’re listing your home at $400,000. If your agent is using a referral network, they’re paying about a $5,040 fee to track down a buyer. Oftentimes, this means your agent has to scale back their marketing efforts just to cover their referral fees, which may very well hurt your chances of earning top dollar on your home.
A lot of these sites lead you to believe that they’re connecting you with the best of the best in real estate, which, in large part, isn’t the truth. Usually, referral networks are making automated calls to thousands of agents a month in an attempt to get as many to sign up for their service so they can to create revenue.
To be sure, I don’t have a problem with companies finding ways to create revenue, but referral networks’ profit-driven, often ambiguous practices are unlikely to produce a high-quality product for you. All in all, your safest bet for finding an agent is through word of mouth. Sit down and interview a few agents and decide who best fits your situation.
If you have any real estate-related questions or suggestions for a future video topic, please reach out to us. I hope to hear from you soon!