Hello, I'm Taylor Swift.
Home is a special place. As a child, home was the place where I felt most free to be myself. I know you feel the same way. It's in all of us.
Finding the home that will allow you to live your best life is a journey, and it's so important to have someone you can trust to guide you. I've come to understand how important it is to have someone you can trust when buying or selling a home. That's all it takes.
That's why I'm happy to announce that I've launched something special for you all: My Favorite Agents, and I know you'll be just as excited about it as I am.
Now, for the first time, you can begin your home buying or selling journey with a real estate agent who has been vetted by my team to meet our standards of expertise and friendliness. We only select agents who are local experts in your market and who agree to treat you the same way they would treat me.
We're also offering My Favorite Agents 100% free to you, so it won't cost you anything to connect with the perfect partner for your journey, because we want you to find that special place that's just for you.
I pray for you from the bottom of my heart.
Taylor
…
This business will be as big as Zillow within a year.
Z makes about $1.5 billion a year in revenue by connecting people with real estate agents, and some rough math on my iPhone calculator tells me that to beat that, Taylor would have to pay a 35% referral fee and get his hands on about 10% of all transactions.
You don't think Taylor Swift could do this, do you? I mean, Zillow is a big brand. But Taylor Swift? She has 100 times the power. Right now, she's keeping our economy from going into recession. Taylor Swift is a cultural and economic powerhouse that's backed by cults.
Honestly, as depressing as this is to think about, it's not real and it's unlikely that any Taylor Swift real estate deals will happen in her future.
Unfortunately, what has made me think about this is reality and even more depressing.
We surveyed 1,000 agents across the country with our friends at BAM for a report we're releasing soon, and one of the questions we asked was where are agents who are paying for leads getting their leads from?
As expected, Zillow came out on top, followed by Realtor.com, HomeLight, and Ojo. Respondents who didn't choose a major company were asked to cite a source.
Let me just say that a lot of people are dabbling in real estate.
For example, former Fox News commentator Glenn Beck, whose name was mentioned multiple times by respondents, is the owner of Glenn Beck's real estate agency, I Trust, which is milking his remaining celebrity status to extract referral fees from deals.
wonderful.
Financial guru Dave Ramsey is not so coincidental: He offers to introduce his audience of millions to agents “who Ramsey trusts.”
Yes, I understand.
I know these things have been around for a long time. And they've taken many forms. To be honest, conceptually it's no different than Glenn Beck or Zillow. The method is simple: build an audience, get licenses, make connections, and get referrals. Zillow adds a ton of value to the consumer, so the execution is very different, but you get what I mean.
You could argue that there's nothing nasty about this at all. Agents have always paid referral fees – when relocating, for example. They have to get work somehow, and what could be worse than paying for newspaper and bus stop ads 30 years ago? And everyone does it anyway. Think 1-800-Dentist.
Still… it all varies. If you’ve been in the real estate industry for any length of time, you’re probably familiar with “introducing agents” – people who aren’t in real estate but are qualified to run their own little Glenn Beck operation through tennis clubs, neighborhood associations, or even just plain sarcasm on Facebook. There are also plenty of scammers trying to lure you down this magical path. There is a vampire subculture in our world that has been growing in recent years.
Spend 15 minutes Google searching this place and you'll feel like you're walking around a few blocks off the Las Vegas strip and feel just as dirty.
So here's my point: I may find all this distasteful, but I'm a decent person anyway. The real problem is much deeper. When fees are attacked, when the industry is accused of sloppy, shady and anti-competitive practices, when smart lawyers and policymakers are pouring their energies into turning everything wrong with the industry upside down, when good agents and brokers are forced to compete with fools for too few deals, this is reckless. At the very least, it looks bad in this situation. And why should professional agents have to put up with this constant exploitation?
And at the end of the day, you might feel a little uncomfortable if someone asked, “Would real estate commissions be lower if people who don't work in real estate didn't make up 20, 30, 40 percent of a lot of transactions?”
The residential real estate industry has mastered self-ownership.
It may be best to break that pattern before you lose out.
Or before Taylor Swift built her referral network.
Enjoy your weekend.