The Controversial Acquisition of Follow Up Boss by Zillow: Implications for Real Estate and Mortgage Professionals
In a surprising move, Follow Up Boss, a renowned Customer Relationship Management (CRM) system, has announced its acquisition by Zillow, a giant in the real estate industry. While acquisitions are common in the business world, this particular merger raises several red flags for real estate and mortgage professionals. This blog aims to dissect the potential negative impacts of this acquisition on the industry, drawing upon Zillow's historical practices and the broader implications for consumer choice and industry competition.
1. Historical Pricing Trends of Zillow
Zillow has a well-documented history of incrementally increasing prices for its services. The platform initially attracted real estate agents and brokers with its wide-reaching audience and user-friendly interface. However, as Zillow gained market dominance, it began to increase its prices, often at rates that outpaced the value provided. For real estate professionals who rely on Zillow for leads and visibility, these price hikes have resulted in squeezed margins and increased operating costs. With the acquisition of Follow Up Boss, there is a legitimate concern that Zillow may employ similar pricing strategies, potentially making the CRM tool less accessible for small to medium-sized agencies.
2. Limitations on Product Development
Follow Up Boss has been celebrated for its innovation and continuous improvement in the CRM space. However, acquisitions often lead to changes in company direction and priorities. With Zillow at the helm, there is a risk that Follow Up Boss may face limitations in its ability to innovate and develop new features. Zillow has a vested interest in maintaining its position in the real estate market, and it may steer Follow Up Boss in a direction that aligns with its own goals, possibly at the expense of the CRM's existing functionality and user experience.
3. Zillow as a Competitor and Traffic Driver
Zillow is not just a platform for listing properties; it is also a competitor to real estate agents and brokers. The company has made significant investments in buying and selling homes directly, essentially competing with the very professionals who use its platform. By acquiring Follow Up Boss, Zillow gains access to a wealth of data and insights about how real estate professionals operate, which could potentially be used to further its own competing services. Additionally, Zillow's portal drives significant traffic, and there is a concern that it could leverage this to favor listings that align with its interests, further marginalizing independent agents and brokers.
4. Mandate to Use Zillow's Mortgage Company
Zillow has made significant inroads in the mortgage industry, and with the acquisition of Follow Up Boss, there is concern that real estate professionals may be pressured or incentivized to use Zillow's mortgage services. This not only limits the choices available to consumers but also undermines the ability of independent mortgage professionals to compete. The resulting concentration of power in the hands of Zillow could lead to less competitive rates and diminished service quality for homebuyers.
5. Limiting Consumer Choices
At the heart of these concerns is the overarching theme of limiting consumer choices. When a single company exerts too much control over an industry, it can lead to a reduction in the diversity of services and products available. For the real estate and mortgage industries, this could manifest in fewer options for consumers, both in terms of the professionals they can work with and the financial products they can access. Zillow's acquisition of Follow Up Boss threatens to consolidate power in the hands of one company, potentially stifling competition, and innovation.
The acquisition of Follow Up Boss by Zillow represents a significant shift in the real estate and mortgage industries. While the full implications of this merger remain to be seen, there are legitimate concerns about increased pricing, limitations on product development, Zillow's role as a competitor and traffic driver, the potential mandate to use Zillow's mortgage services, and the overall limitation of consumer choices. For real estate and mortgage professionals, it is crucial to stay informed and engaged, advocating for a competitive and diverse industry that serves the best interests of consumers and professionals.