Latest / Dishin' Dirt with Gary Pickren / Is Zillow Practicing Real Estate Without a License? The Line Every Agent Needs to See

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Is Zillow Practicing Real Estate Without a License? The Line Every Agent Needs to See · Dishin' Dirt with Gary Pickren

• 0:01
  SPEAKER_00: This is Dish and Dirt with Gary Pickering, South Carolina's only podcast dedicated to the real estate agent craft.
• 0:09
  SPEAKER_00: And now the host of Dish and Dirt, Gary Picker.
• 0:12
  SPEAKER_00: Hi, Greens, and welcome back, everyone, to another episode of Dish and Dirt.
• 0:14
  SPEAKER_00: I'm your often opinionated but rarely wrong host, Gary Pickerin, coming to you from the beautiful downtown Columbia, South Carolina offices of Blair, Kato, Picker, and Castellon, this, the second week of April 2026.
• 0:24
  SPEAKER_00: First of all, I hope everybody had a very safe and happy Easter holiday.
• 0:28
  SPEAKER_00: Now, today, we have an incredible podcast.
• 0:31
  SPEAKER_00: Well, we always have an incredible podcast.
• 0:32
  SPEAKER_00: That's why we're ranked number one real estate podcast in South Carolina.
• 0:35
  SPEAKER_00: But this one to me is very special because it was inspired by an email that I got from one of our very loyal listeners.
• 0:42
  SPEAKER_00: But before we start with that podcast, I do have some exciting news to share with you.
• 0:45
  SPEAKER_00: Blair Cato has bought its very own building in Malden, and we'll be moving into our new space probably about May 17th, 18th, somewhere around there.
• 0:54
  SPEAKER_00: So about six weeks.
• 0:56
  SPEAKER_00: And the new location is only one mile down the road from our current location.
• 1:00
  SPEAKER_00: This new location will be located at 7 West Point Boulevard.
• 1:03
  SPEAKER_00: We're going to have four conference rooms.
• 1:04
  SPEAKER_00: We've got a huge parking lot.
• 1:06
  SPEAKER_00: It's going to be our own building.
• 1:07
  SPEAKER_00: So we're very excited about moving over there.
• 1:10
  SPEAKER_00: Secondly, we also shared some information with you last week about our new Blythewood slash Killian Road office.
• 1:16
  SPEAKER_00: Now it looks like we should be in there probably May 1st or 2nd, somewhere very early.
• 1:21
  SPEAKER_00: We got the painters out there and there's not a whole lot to do.
• 1:23
  SPEAKER_00: It's pretty much a turnkey ready office space.
• 1:25
  SPEAKER_00: If you're out 77 and Killian Road, you just get off right there and look right behind the Chick-fil-A, and you'll see our new offices in the building right behind the Chick-fil-A.
• 1:33
  SPEAKER_00: So really excited about being in that new area and servicing the Blythewood agents so they don't have to run downtown 30, 40 minute drives just to do a closing.
• 1:40
  SPEAKER_00: We'll service the Blythewood community there, the Richland Northeast, the Killian Road area.
• 1:44
  SPEAKER_00: We'll be happy to service all of those closings for you in our new locations.
• 1:47
  SPEAKER_00: A new location in Malden and a new office here for the Blythewood area.
• 1:52
  SPEAKER_00: Today's podcast is the brainchild of a very loyal and a most appreciated podcast listener named Christy.
• 2:00
  SPEAKER_00: She sent me an email a couple of days ago, and I thought it was one of the most well-thought-out emails that pertain to real estate and real estate licensing law that I've received in the longest time.
• 2:10
  SPEAKER_00: And particularly what she was asking about was how Zillow operates in South Carolina and how their operation relates to agency law.
• 2:19
  SPEAKER_00: And I thought it was a very brilliantly crafted email.
• 2:22
  SPEAKER_00: And so I wanted to address that here today.
• 2:24
  SPEAKER_00: I love getting these emails from you guys for several reasons.
• 2:28
  SPEAKER_00: Number one is when I get these emails about license law, a podcast idea, a story that's happened to you, an example of fraud that you've seen, all of these things that you see, it gives me these podcast ideas.
• 2:39
  SPEAKER_00: Secondly, it helps me with what's going on with boots on the ground.
• 2:43
  SPEAKER_00: You know, we can think about this stuff in a theoretical sense at the real estate closing attorney level where you're already under contract, but to see what's happening in real practice on the ground between the buyer and the seller when they're first starting to walk through this process with you, it helps me see how all this actually works, not just in theory, but in relativity.
• 3:04
  SPEAKER_00: So the topic today that Christy brought, and I'm gonna paraphrase it, was does Zillow cross the line from being a portal slash website to being a real estate agent and giving consumer advice?
• 3:17
  SPEAKER_00: And in my research, I found out some things that some of you probably already knew about Zillow, but maybe others did not.
• 3:23
  SPEAKER_00: Number one is that Zillow in South Carolina is actually a real estate brokerage firm.
• 3:28
  SPEAKER_00: Its date of initial licensure according to the South Carolina Real Estate Commission website looks to be November of 2022.
• 3:35
  SPEAKER_00: The broker in charge of that brokerage is a person named Carol Ann O'Donnell, who resides in Seattle, Washington.
• 3:43
  SPEAKER_00: And under her as a broker are listed three associated licensees, all of which are also residents of Seattle, Washington.
• 3:50
  SPEAKER_00: So you're probably asking yourself, why Seattle, Washington?
• 3:53
  SPEAKER_00: That's where Zillow's headquarters.
• 3:54
  SPEAKER_00: It looks like that Carol Ann O'Donnell is a South Carolina licensed broker, and she is out of their corporate office there in Seattle, as are the other three agents.
• 4:03
  SPEAKER_00: Some of you are probably asking yourself, well, when does Zillow get into real estate?
• 4:06
  SPEAKER_00: Are they going to try to start going after buyers and sellers and competing with me?
• 4:09
  SPEAKER_00: And no, I don't think that's the situation.
• 4:11
  SPEAKER_00: I think it more has to do with getting access to the IDX feed and so forth.
• 4:15
  SPEAKER_00: The bigger question that really comes to mind here, though, is Zillow, is it acting as a website, a portal, or is it acting as a real estate brokerage firm when you go to Zillow.com?
• 4:26
  SPEAKER_00: And I can see where they would like to argue well, Zillow.com is just a national or international website.
• 4:32
  SPEAKER_00: It really has nothing to do with the brokerage.
• 4:34
  SPEAKER_00: It really doesn't have any application to state law here and what happens with real estate licensing law.
• 4:39
  SPEAKER_00: That's all kind of irrelevant.
• 4:40
  SPEAKER_00: But the reality of it is that can't be true.
• 4:42
  SPEAKER_00: And I'm going to explain that.
• 4:44
  SPEAKER_00: As I understand it, Zillow in South Carolina is a real estate brokerage because they want to get access to the MLS, but more importantly, they want access to the MLS fee called the IDX or VOX fee.
• 4:55
  SPEAKER_00: And they want that so they can push that to Zillow.com's website.
• 4:59
  SPEAKER_00: And they want to get access because prior to being a real estate brokerage, the only way Zillow could get access was entering into some data sharing agreement with the MLSs and paying a special fee for that.
• 5:10
  SPEAKER_00: But once they became a brokerage, then they had the right to get membership approved at the MLS, and they also had the right to get IDX and VOX feeds, just like your brokerages do.
• 5:21
  SPEAKER_00: And so basically what they've done now is they've set themselves up an arrangement, sort of like a Colwell banker or a Berkshire, a Keller Williams, EXP, Real, all these other brokerages, that being a real estate brokerage and having a real estate broker in charge, you have the right to be a member of the MLS.
• 5:35
  SPEAKER_00: And as being a member of the MLS then gives you the right to get their IDX feed and share that on your website.
• 5:42
  SPEAKER_00: I don't know how Zillow could claim now, because this is how they get the access, is through their brokerage, how they can claim that that information they get access to and put on their website, how that does not tie to their real estate brokerage firm.
• 5:54
  SPEAKER_00: So, in my opinion, what they put on their website at Zillow.com, because that information in part comes through the local MLSs in South Carolina through that IDX feed, they're using their status as a brokerage and their status as a broker in charge in South Carolina to get that information.
• 6:10
  SPEAKER_00: So I think it 100% falls within the jurisdiction of South Carolina license law.
• 6:15
  SPEAKER_00: The issue before us here, as we have to examine today, is on Zillow's website, what I am told is there's a really neat, really advanced tool that Zillow is now advertising and putting out there.
• 6:26
  SPEAKER_00: And what this tool does is it advise a consumer on their offers, how to make an offer, how much to offer, and what terms are necessary to basically win the offer, the likelihood of success by percentages, it actually gives you.
• 6:39
  SPEAKER_00: What Zillow says is Zillow is telling buyers to choose a level offer of strength.
• 6:44
  SPEAKER_00: So you can say I want a strong offer, a weak offer, moderate offer.
• 6:47
  SPEAKER_00: They will then assign a percentage chance of winning and then help you narrow strategy based on price and terms.
• 6:55
  SPEAKER_00: The question sounds simple as to Zillow here, but it's actually a relatively huge deal for the future of other real estate brokerages.
• 7:04
  SPEAKER_00: Because if Zillow is telling buyers what kind of offer might be accepted, what you should offer and what's your chances of winning the bid, is Zillow now acting just as a portal and a website, or is Zillow now starting to act like a real estate agent, which it is, it's a brokerage with a broker in charge and three licensed agents.
• 7:25
  SPEAKER_00: And acting as an agent, is it now providing advice, counsel, and advocacy to a consumer without having signed agency agreement?
• 7:34
  SPEAKER_00: So let's jump a little further into this because this has gotten me totally geeking out.
• 7:38
  SPEAKER_00: I find this stuff extremely interesting.
• 7:39
  SPEAKER_00: What happens when the biggest real estate portal in America, or quite frankly, in the world, stops simply showcasing houses, but rather now starts telling buyers what kind of offer to make and whether or not it would probably get accepted?
• 7:52
  SPEAKER_00: And that's the question in the email from Christy.
• 7:54
  SPEAKER_00: And honestly, it's a very smart, well-thought-out question.
• 7:57
  SPEAKER_00: I mean, I can't praise Christy enough for her thinking in this, because I never thought about how that really applies to license law.
• 8:03
  SPEAKER_00: And it probably has a lot to do with the fact we look at Zillow as a big international company and you don't really think of them as a local brokerage.
• 8:09
  SPEAKER_00: But the main thing we need to understand is this isn't just about technology.
• 8:12
  SPEAKER_00: This isn't about AI, and it certainly is just not about whether Zillow has a cool new feature, because quite frankly, I think the feature is extremely cool.
• 8:21
  SPEAKER_00: But what it is is something more foundational and fundamental.
• 8:24
  SPEAKER_00: And what we're talking about here is when does information provided to a consumer become advice?
• 8:30
  SPEAKER_00: And when does advice create an agency relationship with responsibilities on behalf of the agent, fiducy duties, and legal obligations?
• 8:40
  SPEAKER_00: Because we know in South Carolina that agency is not a casual thing.
• 8:45
  SPEAKER_00: You can't imply it, you can't infer it, you cannot assume it.
• 9:04
  SPEAKER_00: What's important to remember, and we've talked about this quite a bit in continual education, is that every human on the face of earth is a consumer.
• 9:12
  SPEAKER_00: When you have an interaction with a consumer concerning one's financial needs or their abilities to buy or sell real estate, at this point they have entered into the world of being a customer.
• 9:22
  SPEAKER_00: And you're now providing transaction brokerage relationship to this consumer.
• 9:26
  SPEAKER_00: It becomes an interesting concept to think about it because when the consumer interacts with the website is simply going to a website and looking at properties, creating that customer service relationship.
• 9:37
  SPEAKER_00: I would say, no, it doesn't.
• 9:38
  SPEAKER_00: Just simply going and surfing through your website does not create a customer relationship.
• 9:43
  SPEAKER_00: But that's not what's happening here.
• 9:45
  SPEAKER_00: What's happening here is the consumer is now entering financial information about their willingness to make an offer, how much they're willing to make an offer for, and discussing things of that nature.
• 9:55
  SPEAKER_00: So it is about financial abilities and real estate needs and desires.
• 9:59
  SPEAKER_00: So does that interaction now make them a customer of Zillow?
• 10:03
  SPEAKER_00: And I and I think it probably does under South Carolina statute.
• 10:06
  SPEAKER_00: Because remember, all it takes is an interaction concerning one's wants, desires, needs about real estate and their financial abilities to make an offer.
• 10:12
  SPEAKER_00: If I go to their website and I submit on their tool that this property I'd like to make an offer on, uh this is how much I think my offer should be.
• 10:20
  SPEAKER_00: And then they come back and they're giving me information about that offer, that's an interaction.
• 10:23
  SPEAKER_00: Whether it's through a human being sitting on the other end of the keyboard or it's an AI tool, it's still an interaction with that brokerage.
• 10:30
  SPEAKER_00: And again, I don't think Zillow can claim that the website is not part of the brokerage because the only reason the website exists is because they're a brokerage who gets the IDX feed and places that on the website.
• 10:42
  SPEAKER_00: Now, in order to become a client, you've got customer service, which is any interaction concerning real estate and so forth.
• 10:47
  SPEAKER_00: But in order to move to that client service level, there has to be signed agency agreement.
• 10:52
  SPEAKER_00: Remember, we've talked about that.
• 10:54
  SPEAKER_00: It can't just be assumed, you can't fall backwards into agency.
• 10:57
  SPEAKER_00: You actually have to affirmatively enter into agency with the client.
• 11:02
  SPEAKER_00: Everybody agrees you have to have it signed.
• 11:04
  SPEAKER_00: Why this matters is whether they're consumers, customers, or clients, we have different levels of services.
• 11:09
  SPEAKER_00: The law imposes different levels of duties.
• 11:12
  SPEAKER_00: With a customer, we have a duty of good faith, fair dealing, limited confidentiality, and so forth.
• 11:17
  SPEAKER_00: But when we get to the client service level, we have duties of disclosure, loyalty, confidentiality, standards of care, accountability, all those old car duties.
• 11:24
  SPEAKER_00: Three of the biggest things that I believe separate client service from customer service, however, is the ability to advise, counsel, and advocate for.
• 11:31
  SPEAKER_00: You cannot advise a customer, you cannot advocate for a customer, you cannot give counsel to a customer.
• 11:38
  SPEAKER_00: Those are all services that are limited solely to clients.
• 11:41
  SPEAKER_00: Very simple.
• 11:42
  SPEAKER_00: You cannot give those levels of services to a customer until you have entered into a signed agency agreement creating a client relationship.
• 11:50
  SPEAKER_00: If I do it prematurely, I have violated South Carolina State law.
• 11:53
  SPEAKER_00: If I'm working with a customer and I start giving advice to a customer, I have violated South Carolina state law because I cannot provide client-level services until I have a signed agency agreement.
• 12:03
  SPEAKER_00: And again, it has to be in writing.
• 12:05
  SPEAKER_00: There's no assumption.
• 12:06
  SPEAKER_00: The second question is what limitations are imposed on the broker and its licensee?
• 12:10
  SPEAKER_00: If a licensed brokerage was putting advice directly in front of buyers about what to offer, how strong their offer looks, and how to compete for a house, the natural question then becomes: are we still in the world of marketing and information?
• 12:26
  SPEAKER_00: Or have we now drifted into agency behavior without the necessary agency framework, i.e.
• 12:33
  SPEAKER_00: a signed agency agreement?
• 12:35
  SPEAKER_00: And is Zillow now providing client services to a customer without a signed agency agreement?
• 12:43
  SPEAKER_00: And if that customer already has a signed relationship, i.e.
• 12:47
  SPEAKER_00: a client service relationship through agency with another agent, is Zillow providing this advice, counsel, and advocacy, is it now in interference with the agent who actually has signed agency?
• 12:59
  SPEAKER_00: Wow.
• 13:00
  SPEAKER_00: See, that's why this is making me geek out.
• 13:02
  SPEAKER_00: These are incredible questions that have to sit there and try to work your way through.
• 13:06
  SPEAKER_00: If that is the case, then this is a big no-no for Zillow.
• 13:10
  SPEAKER_00: And I know they're an international brand, but that doesn't change anything because if you look at like a compass and anywhere, Keller Williams, EXP, Remax, all of them, they all have to follow the rules in every single state in which they practice.
• 13:23
  SPEAKER_00: It doesn't matter that in California they can do this.
• 13:26
  SPEAKER_00: It doesn't matter in North Carolina they can do that.
• 13:28
  SPEAKER_00: What matters is in South Carolina, does your website and does your offerings comply with South Carolina law?
• 13:33
  SPEAKER_00: This may be perfectly fine in 46 or 47, 49 states, but if it's improper in South Carolina, then it can't be used in South Carolina.
• 13:43
  SPEAKER_00: I'll give you an example.
• 13:44
  SPEAKER_00: There was a company that was offering real estate agents to come sit at your open house or to take your clients on showings.
• 13:51
  SPEAKER_00: And all you have to do is pay$35 or so, and they would have an agent in your market come and show your client houses or come sit at your open house because you didn't have time to do it.
• 13:59
  SPEAKER_00: And it said, legal in all 50 states.
• 14:02
  SPEAKER_00: The problem is it is not legal in South Carolina to do that because you're only allowed to work for one broker.
• 14:07
  SPEAKER_00: The real estate commission sent them a letter and said it is not legal in South Carolina.
• 14:10
  SPEAKER_00: Do not say this is legal in South Carolina, and they had to update their website because it is not legal in all 50 states.
• 14:14
  SPEAKER_00: And so that's the same thing here.
• 14:16
  SPEAKER_00: Um, you know, whether it's a compass and anywhere, Remax or Callaway's whatever, they are having to follow our laws.
• 14:21
  SPEAKER_00: Does Zillow?
• 14:22
  SPEAKER_00: And does it matter that Zillow is not really a practicing brokerage?
• 14:26
  SPEAKER_00: They're an information company or a marketing company.
• 14:29
  SPEAKER_00: Does that matter?
• 14:30
  SPEAKER_00: Well, again, I go back to no, it doesn't, because the reason they have the information in the first place is that they formed a brokerage so they could get membership to the MLS, so they could get the IDX feed and post it onto their website, which is what's driving their traffic.
• 14:42
  SPEAKER_00: So there's a lot for us to unpack here.
• 14:44
  SPEAKER_00: Before I continue to unpack this, I think something's very important to say.
• 14:48
  SPEAKER_00: Number one is this episode is not about anti-technology, it's not about anti-innovation.
• 14:53
  SPEAKER_00: I love innovation.
• 14:54
  SPEAKER_00: I think our industry needs better innovation.
• 14:56
  SPEAKER_00: And you can see over the last five to six years how much has been spent on prop tech.
• 15:03
  SPEAKER_00: Every day there's something new.
• 15:04
  SPEAKER_00: In fact, we have a really cool podcast called Dish and Data.
• 15:08
  SPEAKER_00: Candace Coleman in my office has that podcast.
• 15:10
  SPEAKER_00: And a lot of y'all are emailing me, telling me how beneficial that is.
• 15:13
  SPEAKER_00: So all these tools and all this innovative stuff is actually helping you work better, work faster, and be more efficient.
• 15:20
  SPEAKER_00: But innovation cannot ignore regulatory rules.
• 15:23
  SPEAKER_00: I mean, we've actually talked about this at the real estate commission when we told everybody it's great you want to use AI, but understand you are still responsible for what AI does.
• 15:33
  SPEAKER_00: If AI gives you incorrect information and you give that to your client, your client relies on that, that's on you.
• 15:38
  SPEAKER_00: You have to make sure that the technology is complying with the law.
• 15:41
  SPEAKER_00: That's where we are here today is does this technology that's being offered by an international brand, does it comply with the law in every state that it operates?
• 15:49
  SPEAKER_00: But most importantly, does it comply with South Carolina law?
• 15:52
  SPEAKER_00: Because that's where we practice.
• 15:53
  SPEAKER_00: Secondly, I want y'all to understand this as well.
• 15:56
  SPEAKER_00: I literally have zero opinion about Zillow.
• 15:58
  SPEAKER_00: And I know that's crazy to hear, but on one hand, I understand that Zillow is one of the most powerful tools ever invented for real estate.
• 16:05
  SPEAKER_00: And without a doubt, it allows real estate agents to reach consumers you never would have dreamed of reaching 20, 30 years ago.
• 16:11
  SPEAKER_00: I mean, being here in South Carolina, whether you're in Inman, South Carolina, or Greeleyville or Somerville, it doesn't matter.
• 16:20
  SPEAKER_00: You can be anywhere in South Carolina with a property for sale, and somebody from Seattle, Washington can find that property, fall in love with it, and want to make an offer.
• 16:28
  SPEAKER_00: That didn't happen 30 years ago.
• 16:30
  SPEAKER_00: And the fact that Zillow allows people to search areas and see what house prices are and what houses are available does have a big factor in some people moving to South Carolina.
• 16:41
  SPEAKER_00: The stats are showing it.
• 16:42
  SPEAKER_00: South Carolina is either the number one or number two state in this entire country for growth for real estate.
• 16:47
  SPEAKER_00: What you're seeing is when I talk to a lot of the clients at the closing table, they're saying, well, we were choosing between South Carolina, North Carolina, and Georgia, and they wind up moving here into South Carolina.
• 16:57
  SPEAKER_00: They're getting their information, they're falling in love with the cities in South Carolina because they're doing that research online, which includes doing some research on Zillow.
• 17:05
  SPEAKER_00: And the fact is, buyers go to Zillow and the sellers know this.
• 17:08
  SPEAKER_00: And that's why the sellers all want to be on Zillow, which makes me think why is Compass so hell-bent on doing these private exclusives as well as doing these coming soons and not being on Zillow, because that's where all your sellers want you to be.
• 17:19
  SPEAKER_00: That's their most important thing, is how quickly can you get me on Zillow?
• 17:22
  SPEAKER_00: But I also hear the other side that Zillow advertises your listings and then sells the opportunity to sell your listings to other people.
• 17:32
  SPEAKER_00: I get that why a lot of people get mad that it's my data, they're taking my data and they're selling it to an agent to make money off of me.
• 17:39
  SPEAKER_00: And I get that.
• 17:40
  SPEAKER_00: I hear both sides.
• 17:41
  SPEAKER_00: My Zillow agents swear by Zillow, my non-Zillow agents swear at Zillow.
• 17:46
  SPEAKER_00: I get it.
• 17:46
  SPEAKER_00: But I don't really have an opinion either way.
• 17:48
  SPEAKER_00: If you are a licensed broker or a licensed agent in South Carolina, what is true is you are expected to know when you are dealing with a customer and when you've crossed that line into providing client services.
• 17:58
  SPEAKER_00: You're also expected to know what you can say, what you can't say, when you have to disclose certain things, and what duties attached to it, and what requirements of you are to sign paperwork, particularly agency agreements.
• 18:10
  SPEAKER_00: Today I want to explore whether Zillow's offer guidance tools are simply consumer-facing data, or is it looking like something more like providing client services without an agency agreement?
• 18:22
  SPEAKER_00: And if so, what can be done about it?
• 18:24
  SPEAKER_00: The issue is not whether Zillow's website has a cool feature.
• 18:27
  SPEAKER_00: I've already said it does.
• 18:28
  SPEAKER_00: The issue is whether a licensed brokerage can influence offers without carrying the full weight of brokerage obligations, i.e., fiduciary duties and the duties of disclosure and signed documents such as the buyer representation agreement.
• 18:41
  SPEAKER_00: So let's start with a law, because if we don't get this framework right here, then everything just gets real sloppy.
• 18:46
  SPEAKER_00: South Carolina is very clear on this.
• 18:48
  SPEAKER_00: There's a term that matters here.
• 18:50
  SPEAKER_00: It's called the Ministerial Act.
• 18:51
  SPEAKER_00: A ministerial act, which is what you can do for a customer, is one that does not involve discretion or judgment on behalf of a non-client.
• 18:58
  SPEAKER_00: The issue here is whether a licensed brokerage that gives transaction-specific offer guidance to buyers is moving beyond natural information and into judgment-heavy advisory conduct.
• 19:11
  SPEAKER_00: And are they doing so now without the relationship required, without the disclosure required, without the accountability structure that South Carolina law expects and requires, which is the signed agency agreement?
• 19:22
  SPEAKER_00: Zillow publicly says it holds a South Carolina brokerage license.
• 19:26
  SPEAKER_00: We know that.
• 19:26
  SPEAKER_00: We've seen it.
• 19:27
  SPEAKER_00: And Zillow's public material says that it offers insight tools that helps buyers estimate the likelihood that different offer prices will be accepted.
• 19:36
  SPEAKER_00: Zillow's own customer article also tells buyer to use their agent and Zillow's offer insight tool to estimate likely acceptance of different prices.
• 19:46
  SPEAKER_00: So that's the big dividing line here.
• 19:48
  SPEAKER_00: Let's look about at that for a second.
• 19:50
  SPEAKER_00: Is opening a door ministerial?
• 19:52
  SPEAKER_00: Certainly.
• 19:52
  SPEAKER_00: Nobody would argue with that.
• 19:53
  SPEAKER_00: Is providing a form or information ministerial?
• 19:56
  SPEAKER_00: I think everyone would agree there.
• 19:57
  SPEAKER_00: Is explaining logistics also ministerial?
• 20:00
  SPEAKER_00: It starts to get a little fuzzy there, but I think just the logistics of how something works might be okay.
• 20:04
  SPEAKER_00: But what about when you're suggesting a price to offer, how aggressive to be in your pricing, how likely your pricing or your offer is to succeed, how to structure the terms of your offer to win?
• 20:16
  SPEAKER_00: For me, that's starting now to sound a lot less ministerial in nature and seems to be a lot more judgment-based or advice-based.
• 20:25
  SPEAKER_00: When you tell a buyer there is a 90% chance of winning if you make a particular offer, you're not giving information now.
• 20:32
  SPEAKER_00: You're influencing, you're advising.
• 20:34
  SPEAKER_00: That isn't just data, that is structured decision-making advice.
• 20:38
  SPEAKER_00: And that is exactly why this issue to me is worth discussing and examining.
• 20:42
  SPEAKER_00: Let's apply that framework to what Zillow says they're actually doing.
• 20:46
  SPEAKER_00: On its listing, Zillow is not just showing data.
• 20:50
  SPEAKER_00: It's telling the buyer to choose an offer strength.
• 20:52
  SPEAKER_00: And you can choose strong, competitive, or moderate.
• 20:55
  SPEAKER_00: Why don't you think about that for a second?
• 20:56
  SPEAKER_00: That's not passive information, that's framing the buyer's decision.
• 20:59
  SPEAKER_00: And then it ties that selection to a number.
• 21:02
  SPEAKER_00: So on a$675,000 listing, it might suggest$634,000 and label that as a strong offer with a 90% chance of winning the offer.
• 21:12
  SPEAKER_00: See, that's not just data now, that is predictive guidance tied to a very specific transaction.
• 21:18
  SPEAKER_00: And if you go deeper into it, the AI conversation begins and it will say, here are data-based offer ranges you could consider.
• 21:25
  SPEAKER_00: You could choose how aggressive you want to be.
• 21:27
  SPEAKER_00: And it breaks it into conservative, moderate, and more competitive.
• 21:30
  SPEAKER_00: And it doesn't even stop there.
• 21:31
  SPEAKER_00: It actually gives you rationale for each.
• 21:33
  SPEAKER_00: It might tell you why you might go below the listed offer.
• 21:37
  SPEAKER_00: You might align with this estimate, why you might go over the list to reduce the risk of losing homes.
• 21:43
  SPEAKER_00: And then it says something even more important.
• 21:45
  SPEAKER_00: Pair your price with terms, earnest money, closing dates, inspections, and finance certainty all affect how your offer looks.
• 21:51
  SPEAKER_00: This is now discussing contract strategy.
• 21:54
  SPEAKER_00: And finally, I think the line that is the most telling is that the AI will then say, I can help you narrow which of these bands.
• 22:00
  SPEAKER_00: Line up best with your strategy.
• 22:01
  SPEAKER_00: That point, we're no longer talking about marketing or advertising.
• 22:05
  SPEAKER_00: What we're doing is we are helping the buyer form a strategy.
• 22:09
  SPEAKER_00: That requires agency, guys.
• 22:10
  SPEAKER_00: That's a huge shift from what they're supposed to be doing to what they're doing.
• 22:13
  SPEAKER_00: And that's why this conversation matters because the real issue is not whether Zillow formed agency by accident, is more as Zillow providing agency services without a written agency agreement.
• 22:23
  SPEAKER_00: And secondly, are they now interfering with any agency agreement that another agent might have?
• 22:28
  SPEAKER_00: And the issue is whether this looks, sounds, and functions like advice.
• 22:31
  SPEAKER_00: And does that advice interfere with duties under your agency agreement?
• 22:35
  SPEAKER_00: What if your client that you have under agency and is wanting to make an offer and you're giving them advice on what offer to make and how to make it, but they go to Zillow, as Zillow recommends, and they start using this tool to craft an offer on that specific piece of property.
• 22:50
  SPEAKER_00: Because remember, these the tool is specific to the property on Zillow.
• 22:53
  SPEAKER_00: And the Zillow advice might be contrary to your advice.
• 22:57
  SPEAKER_00: You as an agent may say, we need to come in at 400 grand and here's why.
• 23:00
  SPEAKER_00: But Zillow, who's not on the ground, who's not in the market, who has no idea what's going on at the time, whether you know your clients had other offers, how quickly your client needs to move, and things that really affect this, is now telling your client, instead of making this offer, you need to come in at three and a quarter.
• 23:15
  SPEAKER_00: And your client's going, we need to come in lower.
• 23:16
  SPEAKER_00: And you already know that that offer is not going to be accepted.
• 23:18
  SPEAKER_00: It's giving advice, and it's giving advice contrary to your advice, which to me sounds like Zillow is interfering with your agency.
• 23:26
  SPEAKER_00: As a real estate agent, I think there's really four questions here that you really got to look at in this thing and see how this works.
• 23:31
  SPEAKER_00: Question number one, is the communication general education or is it transaction-specific guidance?
• 23:36
  SPEAKER_00: For me, if it was a broad education statement, like here are some things that a buyer should consider in making offers, I think that'd be easy for Zillow to defend.
• 23:44
  SPEAKER_00: But when you attach it to a very specific piece of property, a listing that's on Zillow, and then it evaluates whether or not your offer is likely to be accepted or not, I think it becomes more transaction specific.
• 23:55
  SPEAKER_00: The second thing to look at is does the tool exercise judgment or is it only providing raw data?
• 24:00
  SPEAKER_00: Well, if you're giving me days on the market, price history, nearby sales, and information like that, I think that is raw data.
• 24:06
  SPEAKER_00: But when you're taking that information and you're translating it to this offer is strong, this offer is weak, your offer is likely to be accepted, you're likely to be declined, that's not raw data.
• 24:17
  SPEAKER_00: That is exercising judgment.
• 24:18
  SPEAKER_00: Question three is could a reasonable consumer think they are receiving professional real estate advice?
• 24:23
  SPEAKER_00: And I think that's huge.
• 24:24
  SPEAKER_00: And I think even there's no agency relationship matter of statutory law, I think consumer confusion can certainly happen there, and they could certainly believe through this interface that they are getting advice and counsel from Zillow themselves.
• 24:36
  SPEAKER_00: And then number four, is the platform operating in multiple roles all at once?
• 24:39
  SPEAKER_00: And I think the answer to that's clearly it is, is acting as a website, as a portal, as a licensed brokerage, as a uh lead generation platform.
• 24:46
  SPEAKER_00: Um, I think it's very difficult for Zillow, again, to say, no, we are not acting as a brokerage because all the information that they're putting on there is because they're a brokerage that they're getting it through the MLS.
• 24:55
  SPEAKER_00: Now, to be fair, let's look at some of their counterarguments.
• 24:57
  SPEAKER_00: Counter argument number one would be it's just data.
• 25:00
  SPEAKER_00: And my response to that, well, it was data until you started giving offer strength recommendations and tying it to specific property.
• 25:06
  SPEAKER_00: Then it became advice.
• 25:07
  SPEAKER_00: The second counterargument might be that South Carolina says we don't have implied agency and we're not under agency, so we don't have agency obligations.
• 25:14
  SPEAKER_00: Well, that's true, but you can't provide client service levels to somebody that doesn't have agency and giving advice as a client service level.
• 25:22
  SPEAKER_00: Number three counterargument is consumers deserve more information.
• 25:26
  SPEAKER_00: Absolutely.
• 25:27
  SPEAKER_00: I'm out there saying every day we need 100% transparency, taking days off the market and days on market and price history off of the MLS is bad.
• 25:36
  SPEAKER_00: We need to be transparent and give all this information.
• 25:38
  SPEAKER_00: But this isn't about giving information.
• 25:40
  SPEAKER_00: This is about giving information, taking that information, analyzing, and now providing advice.
• 25:44
  SPEAKER_00: Counterargument number four is agents are already using technology to advise clients.
• 25:48
  SPEAKER_00: Sure, they are.
• 25:48
  SPEAKER_00: They're using AI and they're doing all that stuff.
• 25:50
  SPEAKER_00: But you know, the difference between Chat GPT, Claude, and Zillow is Zillow is a brokerage and they aren't.
• 25:57
  SPEAKER_00: And so they're not subject to South Carolina licensing law.
• 25:59
  SPEAKER_00: So why does all this matter to agents?
• 26:01
  SPEAKER_00: Well, Zillow is now telling buyers to choose an offer strength: strong, competitive, moderate.
• 26:06
  SPEAKER_00: They're assigning a number for the chance to win, a 90% chance of winning the offer, an 80%.
• 26:11
  SPEAKER_00: So let me ask you something.
• 26:12
  SPEAKER_00: If you told a buyer who has not signed a buyer agency agreement what price to offer, how strong the offer is, and what the probability of winning was, would that be considered violation of agency in South Carolina?
• 26:23
  SPEAKER_00: And the answer is yes, because you are giving advice to a consumer in South Carolina that does not have agency agreement with you.
• 26:29
  SPEAKER_00: You cannot give client-level service to a customer.
• 26:33
  SPEAKER_00: And giving advice, counsel, and advocacy is client-level service.
• 26:36
  SPEAKER_00: So why can Zillow?
• 26:38
  SPEAKER_00: That's the question.
• 26:39
  SPEAKER_00: This is judgment, this is negotiation strategy.
• 26:42
  SPEAKER_00: This is exactly why we have a real estate licensing law.
• 26:44
  SPEAKER_00: You have to be licensed in South Carolina to give judgment, to give strategy, to give advice.
• 26:50
  SPEAKER_00: And when you are licensed, you have to have signed agency to go that step further.
• 26:54
  SPEAKER_00: Zillow's licensed, they have an agency, they have a broker, they have agents.
• 26:58
  SPEAKER_00: But the question is, do they have agency agreement signed to give this level of advice?
• 27:03
  SPEAKER_00: And when it says pair your price with terms, earnest, money, closing date, and inspections, that's literally contract strategy.
• 27:09
  SPEAKER_00: And when you say I can help you narrow which of these bands is best in your strategy, that is really something that agents need to be paying attention to because now Zillow is not just generating leads, it's shaping how those leads behave before those leads ever even talk to you.
• 27:25
  SPEAKER_00: Now you're not just competing for the client, but you're inheriting clients from Zillow, which have already been influenced by Zillow as to pricing, as to terms, as to strategy.
• 27:36
  SPEAKER_00: And here's the kicker: Zillow is a licensed brokerage, and they are not under any written agency agreement with that buyer to provide advice, counsel, and advocacy.
• 27:46
  SPEAKER_00: They get to influence the transaction without the same disclosure, loyalty, and liability structure that you have to operate under.
• 27:54
  SPEAKER_00: You could not do any of these things to somebody else.
• 27:57
  SPEAKER_00: You couldn't do them, so why does Zillow?
• 27:59
  SPEAKER_00: This is not a tech upgrade.
• 28:01
  SPEAKER_00: What this is is a shift in a power dynamic of the transaction.
• 28:04
  SPEAKER_00: And what's even worse is that when you already have agency and they are doing these things, it's interfering with your job, your ability to advise, your ability to counsel your client.
• 28:15
  SPEAKER_00: That's why we have these rules about interference with agency.
• 28:18
  SPEAKER_00: Other agents are not allowed to influence your client.
• 28:22
  SPEAKER_00: If you represent me in buying the house, other agents can't give me advice as to what you should be doing.
• 28:29
  SPEAKER_00: That's a violation of the state law.
• 28:31
  SPEAKER_00: Essentially, is that not what Zillow is doing here?
• 28:34
  SPEAKER_00: What Zillow is doing is they're giving advice on contract strategy, terms, offer suggestions, and things of that nature.
• 28:42
  SPEAKER_00: That's exactly what you would get in trouble for doing if you did it to another agent.
• 28:46
  SPEAKER_00: Here's my takeaway.
• 28:48
  SPEAKER_00: If a licensed brokerage can place transaction-specific offer guidance in front of buyers, including your buyers, and then use MLS-derived data to do it and generate customer trust through its licensed status and monetize those customers through lead sales and adjacent services.
• 29:07
  SPEAKER_00: Have we not now created a system that benefits based on advisory influence that's being captured without the full obligation of agency, which is required in South Carolina?
• 29:17
  SPEAKER_00: Again, not anti-innovation.
• 29:19
  SPEAKER_00: It's about pro-accountability.
• 29:21
  SPEAKER_00: If you're an agent, you're a broker, you're an MLS leader, these are the kind of issues we need to be paying attention to, not later, now, because once customers get used to receiving algorithmic, offer guidance from licensed platforms and distinctions between portals, brokerages, advisors, and lead sales becomes harder and harder to explain and more blurred.
• 29:41
  SPEAKER_00: When these lines get blurred, consumers usually are not the ones who benefit.
• 29:46
  SPEAKER_00: Document what you're seeing, capture screenshots, compare what is being said on the listing to what South Carolina requires to license these.
• 29:53
  SPEAKER_00: Ask whether this information, this influence, or advice.
• 29:56
  SPEAKER_00: And if you think this line has been crossed, don't just complain.
• 29:59
  SPEAKER_00: Build a careful record and bring it to the proper forum.
• 30:02
  SPEAKER_00: You can go to the Real Estate Commission, you can go to the MLSs, you can go to the state legislature.
• 30:06
  SPEAKER_00: That's how meaningful change happens.
• 30:08
  SPEAKER_00: Zillow may not have created agency by implication here in South Carolina, but a licensed brokerage, which Zillow is, can still create real regulatory and consumer protection questions when it gives buyer transaction-specific offer guidance without having the same written relationships, closures, and accountability frameworks that you, as a licensed agent, have to follow.
• 30:28
  SPEAKER_00: They're doing what you cannot do.
• 30:31
  SPEAKER_00: And if you did, you would get in trouble.
• 30:34
  SPEAKER_00: So pay attention to what's going on in your market.
• 30:36
  SPEAKER_00: It ain't always good.
• 30:37
  SPEAKER_00: All right.
• 30:38
  SPEAKER_00: I hope you all enjoyed this.
• 30:39
  SPEAKER_00: Again, thanks to Christy for the wonderful idea for a podcast.
• 30:42
  SPEAKER_00: Y'all like us, share us, and please come back again next week for another episode of Edition Dirt.
• 30:46
  SPEAKER_00: Y'all have a great weekend and take care.