Consumer advocates have long cautioned against dual agency in real-estate transactions. That’s when the real-estate agent advocating for the seller also represents the buyer.
Common sense dictates this scenario can be detrimental to both parties. The buyer’s agent is supposed to help his or her client get a home for the lowest price; the seller’s agent is supposed to f3tch the highest price. Advocating for both sides seems impossible, yet some consumers still end up in that scenario.
A high percentage of those agents advertising on Zillow enjoyed more dual-agency transactions as a result, according to a recent report from Morgan Stanley. Specifically, it found that 60% of those real-estate agents who advertised as a “premier agent” on Zillow received a 30% increase in these dual-side deals. Financially, that means a big payday for the agent, who doesn’t have to split the commission with someone else — effectively doubling his or her pay.
Zillow representatives point out that users see information for the listing agent and three other agents when they search for homes, and can look at customer reviews of agents on the site as well. “We believe that access to information creates a more efficient and ethical real-estate marketplace,” the company noted in a statement, in response to questions about the Morgan Stanley report.
But the fact that there is so much information on Zillow — including information on home prices and community features — actually can work to confuse consumers, said Chris Whitehead, president of the National Association of Exclusive Buyer Agents. They perceive it as a site for information, but fail to realize it’s mainly a place where agents try and collect clients, he added.
“Zillow, to the consumer, is a resource, but all it is is a lead-generation site for real-estate agents,” he said. “The real-estate industry has become an industry of transactions, not people. That’s what all the advertising out there is built toward — getting another transaction,” Whitehead said.