In July of 2014, news came out about the planned merger of Zillow and Trulia, which has rocked the world of real estate. This month FTC clears Zillow’s $1.8 billion acquisition of Trulia, which means that the merger will probably be finished by the end of 2015.
There are different reactions from the public and regulatory authorities and there were also challenges along the way. Zillow, which is based in Seattle, is purchasing San Francisco’s Trulia for $3.5 billion worth of stock. This is going to signal the partnership of the two bigwigs in online listings of real estate properties. The combined efforts of the two companies, according to the chief executive of Zillow, are going to help them to incur significant savings of up to $100 million in 2016. This merger is asserted to result into a wealth of benefits for both companies, as well as both on the buyers and sellers. However, a lot of real estate agents, buyers, sellers, and those who follow real estate news in New York City have also expressed their concerns about its long-term implications in the market.
Impacts for Real Estate Agents
Because of the popularity of both Zillow and Trulia, it is used by many real estate agents who advertise their products and services on these websites, with the intention of being able to achieve an extensive reach. The two websites are carefully made and planned, making it able to offer the best experience for people who are looking for the hottest properties. Nonetheless, after the merger, real estate agents might suffer from having to incur higher costs in advertising and other related fees. Because it is expected to raise more in terms of popularity, it is also anticipated that there will be a surge in their prices.
Real estate agents and brokerage firms with their respective websites will most likely suffer from a weaker traffic as more people will be directed into Zillow-Trulia. Nonetheless, this is not lose-lose situation as agents can always have their listings shifted to these two bigwigs, which will be beneficial as they can take advantage of its huge traffic.
Implications for Buyers
As the NYC real estate market is composed not only of sellers, but also of buyers, the later will also be significantly affected by the merger. Among other things, buyers will most probably benefit from the merger because they will be able to see more property listings from the website of the two. This will give them more choices in the most convenient way possible. Nonetheless, because it is expected to lead in the rise of advertising cost and other related charges, this can also have an impact on the price of the property, which will make them more expensive.
The merger is expected to increase the power of buyers as they have information available in their hand. As the NYC market is saturated, buyers would typically need to deal with tons of agents to evaluate different properties. With the merger of Zillow and Trulia, on the other hand, they can easily browse through a wealth of selections without being bombarded by agents who are trying much to hard sell.
Implications for Competitors
Even prior to the merger, Zillow and Trulia have been already two of the biggest names in the NYC real estate market. If you ask agents about where they post the properties they are selling and buyers on where they look for potential options, they will most probably answer any of the two. With the merger, they will become an even bigger name, and hence, making the competition tighter. The combination of the resources they have will make them stay ahead of the game, making them a preferred choice in NYC.
The toughest competition in the market, at its worst, can even lead into the closing down of some listing sites. Realtor.com and Move Inc. are amongst the businesses to be affected the most as they also have a huge share of the entire NYC market. In a comparison, some experts believe Zillow-Trulia will now become the Facebook of real estate, and in the end, most competitors will be like MySpace, soon facing its own death.
At the end of the day, in spite of the pros and cons of the merger, it can be asserted still as being more beneficial to the NYC market. This will result into having more choices for buyers and will result into maximum exposure of the properties that are listed. While this can lead into a rise in advertising costs, it will all be worth it in the end. Real estate agents should still take charge of their marketing efforts and not fully rely on Zillow and Trulia.