The news that Zillow will acquire Trulia has many real estate agents worried that the combined company will drive up their marketing costs and make it harder to land new listings. Whether you’re using Zillow or Trulia already, or have stayed away from purchasing leads, there’s no need to stress. The simple fact still remains: real estate agents get the majority of their business through referrals and word-of-mouth.
The analyst coverage of the acquisition on CNBC yesterday supports this. Analyst Bradley Safalow of PAA Research even said, “At the end of the day, 80 to 98 percent of residential real estate agents are chosen based on referrals.” The NAR backs this stat up too, citing that 71% of closed seller leads came from trusted sources or face-to-face contact.
Meaning that this acquisition doesn’t impact what’s already driving your business.
Acquisition Could Benefit Agents
On one hand, if you are using Zillow or Trulia to acquire new leads, this merger could work in your favor. In June, Zillow had 53.8 million unique visitors and Trulia had 31.6 million. Combine the two and you’ve got a great pool of leads to potentially tap into.
On the other hand, one of the biggest concerns about this acquisition for real estate agents has been the potentially unfair advantage top producers will have. With more money to spend and less places to spend it, this acquisition could lead to fewer choices and higher advertising costs for the average agent.
Poor Lead Quality Woes
Many agents have long complained that leads from places like Zillow and Trulia are low converting and expensive. One commenter mentions these leads convert between 1-4%. This stat was echoed over on ActiveRain, citing that 1% was the average for closing Internet leads. Even the NAR said that websites only accounted for 4% of sellers connecting with listing agents.
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For many agents, Internet leads don’t make much sense at all, so the merger of two Internet giants does not affect them. Your limited marketing budget is better spent targeting your existing clients to boost your referral business.
Don’t Panic, You Have Plenty of Time
Anything of this magnitude can easily be a cause for concern for real estate agents. But you have to remember that all that has happened is the announcement of the acquisition. The deal itself won’t officially close until 2015 and it has been announced that both companies will maintain their own corporate brands.
In short, nothing has changed yet, and we still have to see what happens when the deal closes and the combined company announces its strategy. Your best source of new business leads is still referrals and you should always be utilizing your sphere of influence to grow your reach.