This article was originally published on Inman News:
Zillow’s acquisition of dotloop has generated quite a commotion this week. Let me try to summarize the fast-moving conversation:
- Zillow’s paying members might get a nice product in dotloop. Initial statements note that Zillow will be “making it available” to agent advertisers (we’ve yet to hear whether that’s at a discount or for free).
- Zillow is no longer “just a media company.” I’m sure Zillow Group staff members are as tired of saying it as we are of hearing it. The company’s main revenue source is still advertising, but with dotloop it’s now fully integrated into the real estate transaction from start to finish.
- Owning a transaction management platform used by many different brokerages seems to preclude Zillow from becoming a brokerage, unless they either dump that platform or all of its customers.
- Dotloop’s data on transactions in nondisclosure states could give Zillow a unique data advantage in those locations.
- Big brokers and franchisors are about to get a lot of questions from their agents using dotloop.
Big congratulations are due to Austin Allison, dotloop’s founder. He had the smarts, guts and work ethic to make something huge happen at a young age.
I remember when he called me years ago trying to make connections with our local MLS members. The founder was just Googling brokers and calling. That’s grit.
On to the outlook:
Raising the bar
Agents already have too many vendors to deal with. If Zillow can streamline services and bring more agents into the present with transaction management and e-signatures, it’s good for the industry and consumer experiences. Big money backing a tool can drive down the costs on a per-user basis.
Agents who are buying advertising on a long-term basis are, in one narrative, the agents who have enough money to do so because they’re productive. The more those agents improve their practices, the bigger effect on the transaction pool.
The combined technology could also allow customers to track return on investment (ROI) from lead to closing, something not often seen in a single platform.
Although some brokers track leads from the source to the CRM to the transaction management system, most don’t track it at all because it’s just too time-consuming. The synergy here, from an analytics standpoint, is attractive.
On the other hand, those points are difficult to hear over the dull roar of “Zillow’s going to have my clients’ personal information and all of my transaction data?!”
The data is the deal
When Trulia bought Market Leader, that deal concerned brokers and agents. The advertising portal might have access to their leads, their prospecting lists — their entire CRM database.
A CRM is a pittance of data when compared to a transaction-management platform. The hard data available from a platform like dotloop has not only client names and information, but forms, contracts, signatures, transaction milestones — all the way down to documents that might point to transactional situations that only the key members of the transaction knew existed.
Keller Williams has more than 80 percent of its agents on the dotloop platform. Other big franchisors have massive adoption as well.
Forget for a second about the agents who squawk at anything to do with Zillow.
Every other agent using dotloop will now be asking himself or herself, “What is going to happen to my clients’ data?” They’ll be asking the broker who supplied the system to them.
Dotloop’s terms of service, at the time of a well-publicized conversation about data rights with the California Association of Realtors, looked like this:
“You automatically grant, or warrant that the user content owner has expressly granted, to us (dotloop) a worldwide, royalty-free, sublicensable and transferable right to license to use, reproduce, distribute (and) create derivative works …, publicly display, publicly perform, transmit, and publish your user content in connection with our services.”
That blank slate should be enough to make you choke on your coffee. That’s not an indictment of dotloop. Your licensing attorney shoots for the moon on the first set of terms, and then waits for the customers to push back.
Many folks signed on to dotloop under these terms and are pointing to this past version of the agreement to say that Zillow will now be able to do anything it wants with your transaction data, but it appears that the concerns of CAR and others warranted changes.
Here’s what the dotloop’s website says today in terms and conditions:
For those who worry about Zillow seeing your data: Zillow will be able to see your data. It seems that, at least for now, though, Zillow would be limited significantly from using the users’ content in any advertising.
Whether the raw sales data could be melded into the market analytics that Zillow uses to display sales data is a bigger question.
In nondisclosure states including Alaska, Idaho, Kansas, Louisiana, Mississippi, (parts of) Missouri, Montana, New Mexico, North Dakota, Texas, Utah and Wyoming, public data on real estate sales is primitive, and Zillow could get a leg up on its competition with this new trove of sales data.
Slow boiling the frog
For my cohorts and I in the tinfoil-hat-wearing, we’re-losing-our-data and the get-off-my-lawn crowd, I think there was a simultaneous shaking of the head and a chuckle when the acquisition was announced.
Imagine if CAR hadn’t pushed back and dotloop’s original contract was still in place when Zillow had acquired dotloop’s customer base. All of the users’ data would not only be visible to Zillow, but licensable to the highest bidder for public advertising.
That doesn’t seem to be possible now, but the terms and conditions usually change when ownership changes take place, so this will be something to keep an eye on.
We’ve been here before. Syndication was no big deal because it was easy. A direct data feed from the broker or MLS was faster. “We’re supposed to negotiate Fair Display Guidelines in the data agreement? We just want to get the home sold.”
All the while, brokers were the proverbial frog in the pot. The water was warming just slowly enough that we didn’t jump out with our data. The potential repercussions were ignored in the pursuit of the comfort of another transaction. We were busy selling.
So maybe it shouldn’t have been a surprise when the data aggregators expanded their reach straight into our transactions. Agents reacted vocally, but our data was already being reused in new and profitable ways by the day.
Zillow used agents’ profile information in advertising campaigns to draw traffic to its website. They’re defending, in court, the position that agents’ photos of sold listings not only don’t belong to the agents, but they can also be used in unrelated marketing campaigns.
Agents or their brokers often probably gave these permissions when they didn’t pay attention to their data agreements.
We’re all guilty of clicking the checkbox and saying “I agree” without reading. It’s not that our service providers are vindictive. They just don’t think that we care, and we usually prove them right. They keep turning the temperature up, and we just sit in the water and hope it doesn’t boil.
Peoplework with boundaries
Our problem in real estate is that we’re so people-oriented that we sometimes allow personal trust to overrule our instincts to verify. We like the people at dotloop and Zillow.
Peoplework is the dotloop mantra, and it’s wonderful, but it can’t exist in a vacuum. We can’t ignore the boundaries that have to be framed around our businesses just because we like the people with whom we work.
Your former clients’ master bedroom can already be used in an unseemly advertising campaign. Something more personal might be next.
Companies change. Management changes. Terms and conditions change.
We need to pay more attention to the protections we give to our clients’ data as an industry. We can forge agreements with vendors without having every modicum of our data rights gutted by their attorneys, but it can’t be done on an individual level. We need leadership to provide a unified voice.
Let’s all take a step back and reset our expectations of data rights with our vendors before diving, head down, into the next transaction.
Sam DeBord is managing broker of Seattle Homes Group with Coldwell Banker Danforth, and 2016 president-elect of Seattle King County Realtors. You can find his team at SeattleHome.com and SeattleCondo.com.