Zillow Success Story - How It Is Revolutionizing the Real Estate Sector

From ordering gourmet food to getting coaching, everything is available online. Today, even our marketplace is online, whether groceries or property, one can easily buy them online. Traditionally, the real estate market was known for the deals that occurred with the help of unorganized brokers, agents, and middlemen.

However, with the changing times, the real estate market has shifted on the internet, too; this is why Zillow came into existence with Zillow homes for rent, Zillow homes for sale, Zillow apartments, and much more.

With due diligence, one can buy or sell properties and houses on real estate websites. In 2023, the National Association of Realtors stated that 52% of the buyers who bought homes found them on the internet.

As per the report posted on ipropertymanagement.com, real estate websites collectively are known to have been visited more than 120 million times on the internet, and one such dominant platform is Zillow. More than 57 million unique visitors search for properties on Zillow in a month as of 2023. Find more information about the real-estate platform and dive deep into the history of Zillow.

Zillow - Company Highlights

Zillow- About
Zillow- Startup Story
Zillow- Business Model
Zillow - Acquisitions
Zillow- Revenue Model
Zillow - Threats to Its Revenue

Zillow - About

Zillow is one of the most prominent and famous real estate and home-related brands on the internet today. Zillow Group, Inc. has it focuses on all stages of the home life cycle including renting, buying, financing, selling, home improvement, and so on.

With its unparalleled data, inspiration, and knowledge of homes and real estate, Zillow Group is committed to empowering its consumers and connecting them with the right professionals to help.

Concerning the business-to-business (B2B) segment, Zillow Group also develops and provides marketing and technology solutions to help real estate, rental, and mortgage professionals maximize and increase business opportunities.

This helps them to connect with millions of customers daily and increases their reach as well. Zillow's Data and voice communication needs are accomplished by threshold communication, which helps safeguard clients from the traditional errands of multiple network and hardware vendors.

Zillow was founded with the prime objective of finding houses and apartments and helping consumers find their best-match properties, and now the company has expanded its services way beyond. Besides, the Zillow group also operates similar real estate portals like Trulia, Hot Pads, and Street Easy.

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Zillow - Startup Story

The idea of funding a platform like Zillow was initiated in the year 2004 by Rich Barton. At that time, Barton was working at Microsoft Firm. With the thought of changing the real estate industry and transforming the sector, Zillow was formed in the year 2004. The company's website was launched in 2006, and the company started its operations thereafter.

Later on in the year, 2010 Barton stayed as the executive chairman, and Spencer Rascoff was appointed as the CEO of the company by the board of directors. After eight years, when Zillow was about to enter the on-demand home-buying market, Barton returned as the CEO of the company to lead in the transition phase. He is still the CEO of the firm.

In 2018, the company stepped outside the country for the very first time and partnered with Century 21 Canada to list Canadian properties on its website.

Zillow - Business Model

The whole Business Model of Zillow came down with the single objective to empower people with tools and information so that they make wise decisions in buying, leasing, selling, remodeling, financing, or renting homes.

The segments that the company has categorized on its portal are:

1. Sale: The customers in this section can find properties for sale according to their preferences by applying various filters.

2. Buy: This category is further categorized into different types-

• Foreclosed: These are the properties where the homeowners have failed to pay the mortgage value, and the property has now gone for foreclosure auction
• Pre-foreclosure: These are the properties that are in the early stages of being
  repossessed due to the owner's inability to pay the mortgage amount
• The others include new constructions, flats recently sold, and for sale by the owner

3. Rent: In this section, customers can explore options like rental buildings, apartments, or offices.

4. Home Loans: Visitors on the website can also explore the various financing options, like refinancing rates, mortgage rates, different lenders, etc.

5. Agents: This is the last category where the visitors can look out for the agent's help if they wish to. The portal helps you find the right real estate managers, property managers, home inspectors, home builders, etc.

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Zillow - Acquisitions

Zillow - Revenue Model

Zillow is a free website when it comes to listing a property for sale or rent. Websites, online tools, and mobile applications are free as well. Even though the company is providing almost everything for free its annual revenue was $1.45 billion (2023). Zillow's business model is based on peer-to-peer (P2P), agency-to-the-customer (B2C), and agency-to-agency (A2A).

These are the ways through which Zillow is generating its revenue:

1. Sale of Advertisements to Property Management Companies

Zillow has a rental network that maximizes the visibility of the advertiser's property to the renters. This network comprises Zillow, Trulia, Hot Pads, and Street Easy. Zillow offers this network to property management companies. Such rentals bring a huge part of the revenue for the company.

2. Premier Services for Real Estate Agents

Through means of advertising, Zillow's premier services can bring you buyers, sellers, and better business for agents. If one wants to become a premier agent, Zillow charges a nominal amount that depends on the place and the area. These agents pay Zillow an amount determined by the number of ad impressions delivered to the users of that area.

3. Ad Sales to Mortgage Lenders

The platform also sells its advertising space to mortgage lenders and businesses such as general contractors, interior designers, home organization retailers, etc. These lenders and businesses pay Zillow based on cost per click (CPC) or cost per thousand impressions(CPM).

Zillow - Threats to Its Revenue

Zillow heavily relies on advertising revenue for its financial success. However, given that most of its advertising relationships are short-term, there is a risk that Zillow could lose its existing advertisers and struggle to find replacements. This could lead to a decline in its advertising revenue, which would be detrimental to the company's growth and profitability.

Furthermore, Zillow's Premier Agent program, which is a significant source of advertising revenue, could be affected if real estate agents stop seeing the value in advertising on its platform. If agents find other, more attractive options for advertising their services, Zillow's revenue could suffer.

In addition, factors beyond Zillow's control, such as fluctuations in the real estate market or a drop in consumer interest in home buying and mortgages, could lead to a decrease in user traffic to the site and, consequently, lower ad revenue. This would further compound the challenges that Zillow may face in maintaining its financial success.

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Conclusion

Zillow is a real estate-focused online brand that has products available for all stages of home life cycling. Zillow was introduced to the world in 2006 after the initiation of re-evaluating the real estate market by Rich Barton, a former Microsoft employee.

Zillow is known to provide free services to its users related to renting or buying a house, as well as many other similar services. Zillow is considered one of the major players in the real estate sector.

FAQs

What is Zillow?

Zillow Group is one of the major players in the real estate sector, highly known for providing services spanning all the stages of the home life cycle. They provide services like buying, renting, leasing, and financing a property.

When did Zillow start?

Zillow was started in the year 2006. The CEO of Zillow is Rich Barton.

Who owns Zillow?

Rich Barton, a former Microsoft employee, owns Zillow.

Who are Zillow's competitors?

Some of Zillow's competitors are BoldLead CRM, Realtor.com, Zumper, Apartments.com, etc.

How does Zillow's business model?

Zillow earns its revenue from multiple sources; some of them to be counted are selling advertisements, providing premier services to its customers, etc.