By Robbie Citrino for Kapitall.
After the combination of the two largest real estate media
companies takes place the new company will be the foremost
authority on real estate. It will not, however, upset the
realtors and agents in the United States today.
In fact, it might actually help them.
As Zillow CEO Spencer Rascoff stated when announcing the merger:
"We sell ads, not houses."
Both Zillow and Trulia have operated as media companies, giving
real estate information to consumers and charging brokerages to
join and promote their properties on the site. Combined, the sites
$342 million in revenues in 2013, and saw an increase in sales of
This, however, is not a losing situation for realtors, as paying
to promote on these sites has helped boost 2013 home sales to their
point in seven years
In addition, buying a house is usually the largest
investment one undertakes, and it
typically requires personal connection with a human
advisor rather than a website.
That means brokerage companies, like
Realogy Corp. (
(parent company of
), will likely keep their clients, possibly even
selling houses faster and keeping their regular
This misunderstanding about Zillow's business
model could be the reason why Re/Max and Realogy have fallen
11% and 20% respectively since mid-march. Could this be a time to
buy these undervalued brokerages? Or could Zillow move further into
Click on the interactive chart to view data over
1. Realogy Holdings Corp.
): Provides real estate and relocation services
worldwide. Market cap at $5.56B, most recent closing price at
2. RE/MAX Holdings, Inc.
): Operates as a franchisor for residential and commercial real
estate brokerage services in the United States and
internationally. Market cap at $332.51M, most recent closing
price at $28.64.
3. Trulia, Inc.
): Operates an online real estate information
marketplace. Market cap at $2.08B, most recent closing price
(List compiled by Robbie Citrino. Monthly returns sourced
from Zacks Investment Research, all other data sourced from
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