There’s no question that Zillow.com has evolved from a real estate curiosity to a major player in the industry. While some may think of it as a starting point for future homebuyers or simply an entertaining way for house-hunters to kill some time online, Zillow is emerging as a force that could disrupt the entire real estate process. In fact, it already has.

If you’re wondering if Zillow will eventually displace real estate agents, I suppose it’s possible, though highly unlikely — and it would be years away if Zillow were to consider such a pivot.

The more likely lasting scenario is their current model, which uses real estate agents the way Uber uses vetted drivers to close business for them.

Here’s how it works: Zillow sells leads to agents backed by large real estate brokers like Keller Williams, Re/Max and Coldwell Banker. Users sign up and explore locales where they want to buy. Zillow provides their “Zestimate,” which is sometimes less of an estimate and more of a guesstimate. Eventually, Zillow will suggest one of their recommended agents to work with the homebuyer, gather as much accurate data as they can and seal the deal. So the agent gets paid, but so does the broker and now Zillow gets their cut.

Now, whether these agents are any good at selling is no guarantee. The agents Zillow recommends are the ones paying thousands of dollars a year for leads. They are not necessarily the cream of the crop, though some are. Bottom line: it’s a crapshoot.

And that’s the risk you take when starting with software rather than a human. Real estate is almost always an emotional purchase and you need a sentient human to make it all work. Zillow knows that and that’s why they invest in human capital to power their sales engine. At least for now.

Ready to buy a new home or refinance the one you own? Please get in touch and I’ll be happy to answer your questions and help guide you through the process. I look forward to speaking with you.