Zillow’s dotloop Acquisition: It’s About Trust

I don’t trust Zillow. It’s that simple. I have frequently communicated my lack of trust to Zillow’s C-suite. MarkMcLaughlin_small

As someone who runs a real estate brokerage, I have always been wary of Zillow’s ambitions. There were, and are, just too many contradictions to stomach.

Consider the following:

  • From the beginning, Zillow has positioned itself as the consumers’ friend but has cynically titillated millions with inaccurate “Zestimates.”
  • The company aggressively markets itself as the best place to find a home even as its listing coverage and quality leave much to be desired.
  • Zillow’s business model depends on advertising and selling services to real estate professionals, yet it touts consumers’ ability to post self-listed homes on the site.

For me, many of the real estate professionals at Pacific Union, and brokerage leaders across the country, this has hardly engendered admiration. But Zillow’s recent acquisition of dotloop, a real estate transaction-management software company, represents something much more serious: a total failure of trust.

At risk here is the industry’s most sensitive personal and financial information and our legal and ethical duty as real estate advisors.

It’s time our industry takes a stand, pushes back, and demands the same trust and integrity from Zillow that our clients expect and receive from trusted real estate professionals.

In my mind this comes down to three issues:

The Gap Between Words and Actions

First, this acquisition is the greatest disconnect between Zillow’s words and actions to date. For the past year, Zillow CEO Spencer Rascoff has proclaimed to anyone who will listen that Zillow sells ads, not houses. I suppose this was meant to make those of us in the real estate business feel better, but many of us were asking ourselves the question “Does he think we’re stupid?” even before the dotloop deal.

Now Zillow has done something quite odd for a self-proclaimed “media company.” It has potentially extended itself deep into the mechanics of the real estate transaction. Rascoff’s spin on this is that Zillow acquired dotloop to make the leads it sends agents more valuable.

Zillow said that it simply sells ads. What Zillow just did is something quite different.

As the saying goes, “Fool me once … ”

Privacy and Common Sense

With the dotloop acquisition, Zillow will offer real estate transaction-management software while continuing to sell advertising. Selling advertising is about matching advertisers with audiences. These days, that is done through sophisticated data mining, tracking, and targeting technologies that concern many privacy advocates.

Now, I am not paranoid. I am not a conspiracy theorist. And I have no reason to believe that the Zillow team has plans to egregiously violate the common-sense privacy policies consumers expect and real estate professionals would demand of a service provider.

But it seems obviously reckless that sensitive data needed for a life-changing financial transaction will be housed in a system owned by a company that sells a ton of advertising.

Would you upload your bank statements or Social Security number to a Facebook group? Would you store your medical records in your Yahoo! account?

Real estate transactions are built on trust between professionals and their clients. At Pacific Union, we will not jeopardize that trust by treating our clients’ information cavalierly.

Below I identify some huge gaps in dotloop’s privacy policy that may alarm you – indeed, now that Zillow owns the company, they may terrify you.

The Fine Print

Let’s do what dotloop and Zillow hopes you won’t and take a moment to consider some of the fine print – dotloop’s privacy policy. Warning: This is not a trust-building exercise.

First comes the reality directed at real estate professionals:

“You agree and consent that we may collect, use, and disclose your personal information in accordance with this Policy. To make this Policy easy to find, we make it available on our homepage.

Then, an ambiguous definition of the sort of information that may be collected and shared:

“The type of personal information collected on the website includes, but is not limited to: Name, Address, Email Address, Phone Number, and your involvement in a real estate transaction.

Followed by the reality that they’re not just talking about your information – your clients are on the hook too:

” … the same types of information previously described in this paragraph will also apply to other people’s information.

Then, the kicker:

“We may share your personal information with third parties who may offer services that may be of interest (“Third Party Sharing”).

Of course, users are informed that they can opt out of third-party sharing. But I don’t think many real estate professionals will feel comfortable bringing this up with their clients, do you?

The Bottom Line

Zillow is feeling extreme pressure from Wall Street – the word “desperate” comes to my mind. The company’s stock price has fallen from $160 on July 28 of last year to $81.50 at the close of trading last Friday. And while Rascoff recently said that Zillow’s management thinks about the company’s trajectory in “decades,” the heat is on to grow revenue – fast.

I therefore expect more moves like the dotloop acquisition. I expect more efforts to frantically spin the industry into believing that Zillow is a trusted partner. I predict more disconnects between words and actions.

I know I am not alone in holding these views. And on behalf of our company, our professionals, our clients, and our industry I will not remain idle. I will continue to ask hard questions, and I won’t accept deflective answers.

I don’t trust Zillow.

– Mark A. McLaughlin, CEO, Pacific Union

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  • Austin Allison

    Hi Mark.

    Thanks for sharing your thoughts. On behalf of dotloop, I just wanted to chime in and say that we exist to help agents and brokerages succeed in their businesses. The Zillow Group acquisition simply provides us with resources to do that better and faster than we did previously.

    As for the privacy topics you raised, it’s worth clarifying for your readers that the privacy policy and terms of use go hand-in-hand. Sharing pieces of one or the other without context doesn’t tell the whole story. For example, this excerpt from your policy describes similar “opt out” rules and specifically implies that you use your (Pacific Union’s) clients’ personal information to market through third parties…

    EXCERPT FROM PACIFICUNION.COM

    You have the right to “opt in” and to “opt out” of certain uses of your Personal Information and may change your preferences regarding such uses at any time. For example, at the time you are requested to provide Personal Information on this Website, you may have the opportunity to elect whether or not to: (1) receive commercial correspondence from us (either on our behalf or on behalf of a third party), or (2) have your Personal Information shared with other entities (outside of the Company) for their marketing purposes. You may also opt-out of Company promotional e-mails by clicking on the opt-out link within the e-mail you receive, or of Company postal mailings by following the directions in such mailings. Please be aware that it may take up to 10 business day(s)for Company to update your preferences. During that time, you may continue to receive messages from us.

    Please understand that if you opt-out of receiving promotional correspondence from us, we may still contact you in connection with your relationship, activities, transactions and communications with us (including, for example and without limitation, alerts, favorites and market condition reports, in connection with your use of the Website (as defined above). You may control how you receive such non-promotional correspondence from us by updating your account preferences. Also, a request to have us stop sharing your Personal Information with other entities for marketing purposes will only apply as of the date on which we receive your request, and we will not be responsible for any communications that you may receive from affiliates that received your Personal Information prior to such request. In these cases, please contact those affiliates directly.

    RETURNING TO MY RESPONSE

    Just like that paragraph doesn’t tell the full story about Pacific Union’s stance on privacy, the sentences you pasted don’t tell the full story on dotloop’s stance either. For a fuller picture of dotloop’s stance on this, you can find our terms of use at https://www.dotloop.com/terms-conditions, and I’ve pasted the section below that speaks to how we use content within our website…

    EXERPT FROM DOTLOOP.COM

    In connection with your use of our Services you may submit documents and other content (“your Content”) to the Services.

    Subject to ownership interests of third-parties, you will retain full ownership of your Content. We don’t claim any ownership to any of your Content. These Terms do not grant us any rights to your Content or intellectual property except for the limited rights that are needed to run the Services.

    We may need to access or otherwise process your Content solely for purposes related to the Services. You agree that we have your permission to access or process your Content for such purposes. This permission extends to trusted parties we work with to provide the Services. Such processing includes technically administering our Services by, for example, backing up data or enabling documents in portable document format (PDF) to be edited.

    We will not knowingly share or allow anyone to access your Content other than as we describe in our Privacy Policy. It is yours and we work to keep it that way.

    SUMMARY

    As has always been the case with dotloop, data will only be used for dotloop services in ways that are permitted by the license in place with agents and brokerages. We are still dotloop, just with a new parent company and more resources. If you have further questions or concerns, I’m happy to discuss this with you by phone or in person.

    Austin

    • Stefen

      When it comes to Zillow, it is my sincere belief that the vast majority of REALTORS share a deep and long-held disdain, mistrust and simmering hatred toward this FRANKENSTEIN MONSTER of the Real Estate community. But there are those Zillow supporters who consistently try to make it appear as though the company was a well-meaning friend with only the best intentions to each of us Realtors individually, our industry and the entire real estate community as a whole.

      First, I want to get a few things straight with the Z- supporters. Say what you want, but Zillow is not our friend. Zillow, and other big aggregators like them, have injected themselves into the real estate transaction by using our own listings to attract and capture our would-be customers, and then selling them back to us while extracting a large slice of the commission income in the process. Zillow is our opponent. PERIOD.

      The sad fact of the matter is Zillow is a monster and isn’t going anywhere anytime soon. I mean with a market capitalization of $5.8 billion they are much larger than nearly anyone in the real estate space. They have resources at their disposal that we can only dream of. They have capitalized on the blunder of our own trade organization to build their massive company, and at this rate, they will soon dominate the real estate services space.
      What a sad Day that would be.

      • Stefen,

        It’s a very unusual relationship and business model as Zillow seeks advertising revenue from the real estate community while
        simultaneously providing products and services to the same client base of it
        advertisers.

        Zillow can rebut in many ways or spin PRs, but this week at Inman Connect we will hold strong.

        Thanks for your comment,

        Mark

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