The Point2 Policy Change: What Does It Mean for Zillow Inc (Z)?

The Fool recently explored Seattle. Today, CEO Spencer Rascoff introduces us to Zillow Inc (NASDAQ:Z), telling us how the online home and real estate marketplace works, what he considers its greatest strengths, and what investors should know about it.

Zillow Inc (NASDAQ:Z)

In the video below, Spencer explains the new Point2 policy, and why he doesn’t expect it to have any impact on Zillow Inc (NASDAQ:Z)’s business.

Austin Smith: Probably going to make your skin crawl on this one, but we couldn’t help but read the Citron Report, just to understand both sides of the bull/bear thesis here. They had a point about Point2’s new policy, which would seem to severely limit your ability to sell leads to non-listing agents, if I understand it correctly. Do you have any thoughts on that policy and if it does restrict you?

Spencer Rascoff: This is kind of industry minutiae, I guess, for most of your viewers. Just to level up and explain the issue really briefly, the question really is when a listing appears on Zillow Inc (NASDAQ:Z), does a buyer lead on that particular listing get sold to a Premier Agent, or does that buyer lead go to the listing agent?

Austin: Right.

Spencer: Most of the time, the buyer wants to work with the buyer’s agent. They don’t want to work with the listing agent because the listing agent has been hired by the seller to sell it for the highest possible price, and the buyer wants to be represented by a buyer’s agent who wants to get the house for as low as possible a price.

Many states actually have laws forbidding the same agent from working both sides of the transaction because of the obvious conflict, and a lot of brokerages actually forbid their agents from working both sides of the transaction.

This concept of dual agency is very, very well understood within the U.S. real estate system and it’s how we make money, of course. We have buyer’s agents that we connect home shoppers with.

What that article was talking about was whether, when an MLS syndicates listings, whether it’s opt-in or opt-out, basically; whether the MLS has to choose to participate or it’s automatically participating and then they can choose to opt out.

I don’t expect that will have any impact on our business.

The article The Point2 Policy Change: What Does It Mean for Zillow? originally appeared on Fool.com is written by Austin Smith.

Austin Smith owns shares of Zillow. The Motley Fool recommends Zillow. The Motley Fool owns shares of Zillow.

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