Your agents are paying Zillow to compete against you

Here's a number that should give you pause.

In 2024, Zillow's Premier Agent program generated roughly $1.6 billion in revenue – just over 70% of the company's total revenue. Every dollar of that came from real estate agents paying for leads and ad placements… agents exactly like the ones who work at your brokerage.

Top producers on the platform spend up to $3,000 (or more) each month on Zillow ads, and there are over 84,000 agent advertisers on the platform at any given time.

Do the math. If your office has 50 agents running Zillow campaigns at a modest average of $500 a month, your brokerage's collective Zillow tab is sitting at $300,000 a year – and that's a conservative estimate for a mid-sized shop.

That money isn't going into a black hole – it's going directly into the product, the platform, and the competitive moat of the single company that poses the greatest long-term structural threat to your business. And here's the uncomfortable part: a meaningful portion of the reason your agents feel they have to spend that money traces back to a decision your brokerage probably made years ago.

How the brokerage website got hollowed out

None of this happened through a single bad decision. It happened gradually, as a series of individually reasonable choices that added up to a structural problem.

Brokerages built websites, invested in IDX, paid vendors, and drove traffic – all of it in good faith. When agents pushed for direct lead routing on their own listings, that also seemed fair. After all, it's their listings, clients, and relationships. So brokerages accommodated them – agent by agent, listing by listing – until the arrangement calcified into an unspoken rule.

But zoom out and the logic breaks down. The brokerage is now driving traffic to the one website where it can only monetize the leads it doesn't want – IDX leads from listings that don't belong to agents. Those tend to be lower intent, harder to convert, and much further from a transaction than someone who searched for it by address. The high-intent traffic – the person who found your agent's listing, asked a question, requested a tour – flows straight to the agent and disappears from the brokerage's world entirely.

The result is a website that serves as a (very expensive) billboard for other people's businesses. Consumers use it, agents benefit from it… and the brokerage gets almost nothing back from the traffic it worked to generate. That's not a policy decision anyone made – it's a habit that's hardened into infrastructure.

And the data reflects it. According to a recent report, the top 10 home search sites account for 98% of all real estate search traffic – with Zillow claiming 44% of that share on its own. Meanwhile, traditional brokerage websites barely register. RE/MAX, the top-ranking traditional brokerage site, averages about 1.9 million monthly visitors, while Coldwell Banker, Century 21, Keller Williams, and eXp each account for less than 1% of total search traffic. That's more than just a slight gap, and it didn't form because consumers prefer Zillow's brand. It formed because brokerages quietly stopped having a reason to compete.

The incentive collapse

When you can't monetize traffic, you stop investing in generating it. This is rational behavior, not negligence.

If the leads that land on an agent's listing page go directly to that agent regardless of where they came from, the brokerage has no financial stake in the quality of that experience. There's no conversion to optimize for, no funnel to manage, no return to measure. So website investment slows: the UX gets stale, the SEO gets neglected, the lead capture strategy never gets built. After that, agents notice that the brokerage site isn't performing, so they go looking for leads elsewhere.

And Zillow is right there – with a polished product, a massive audience, and a proven conversion model: the agent signs up, starts spending, and the cycle accelerates. The brokerage didn't lose to Zillow because Zillow outcompeted them on merit – the brokerage stepped back from a game it had every right to play (and win), but Zillow walked in to fill the space.

This matters to consumers too. According to the National Association of Realtors' 2024 Profile of Home Buyers and Sellers, 43% of buyers said their very first step in the home buying process was to look for properties online, and 100% of buyers used the internet at some point during their search. Those buyers are going somewhere… and these days, they're most likely going to Zillow.

Zillow isn't waiting

The uncomfortable truth in all of this is that Zillow is doing exactly what a well-capitalized company with a recurring revenue stream is supposed to do: reinvesting aggressively to widen its moat.

In late 2024, they acquired Virtual Staging AI, a technology that lets agents and photographers generate professionally staged listing images almost instantly. In the following year, they launched Zillow Pro, an AI-powered suite combining Follow Up Boss, My Agent, and Agent Profiles into a single product that helps agents strengthen relationships and close more transactions. And by early 2026, Zillow had secured another first-mover advantage: it became the only real estate app inside ChatGPT, drawing a direct parallel in its own communications to when they were among the first to build for mobile a decade ago.

Every one of these product investments was funded by ad spend paid by the same agents in your brokerage. Every month that your agents write a check to Zillow and your website stays static, the gap widens – not just in traffic, but in tools, data, brand trust, and AI capabilities that consumers will come to expect from any real estate experience.

The question isn't whether this trajectory is a problem… it is. The question is whether your brokerage is going to keep funding it.

What monetization actually looks like

Here's where a lot of brokerage leaders check out, assuming the only fix is a conflict with their agents – that isn’t the case though.

The goal isn't to take leads away from agents; it's to stop leaving brokerage-generated value on the table entirely. There's a meaningful difference between the two, and framing it that way changes the conversation.

A few models that work without blowing up agent relationships:

• First-touch capture: the brokerage captures the lead when someone engages with a listing, then routes it to the listing agent – the agent still wins the client, but the brokerage now has a record of the interaction and a contact in its database
• Shared lead economics: when the brokerage's own marketing spend drove the buyer to the site, it takes a referral on leads it generated, similar to how any lead generation arrangement works
• Ancillary monetization: mortgage, title, and insurance partnerships placed on listing pages with high purchase intent – the agent relationship stays untouched, and the brokerage monetizes the traffic through services rather than lead ownership

The reframe for agents is: we invest in driving buyers to your listings, and here's what we need to sustain that investment. That's not a demand – it's a business conversation. And when they understand the alternative is a brokerage that stops investing in the website entirely, most agents are more open than you'd expect.

On the operational side, the infrastructure for capturing and converting that traffic is more mature than it's ever been. For more info, read our article on how brokerages capture and nurture more website leads, which lays out a practical framework for turning a high-intent visitor into a valuable lead without wrecking the user experience. This is the piece most brokerage sites still don't have in place. And once you do have a proper capture system, understanding how it's performing becomes its own discipline. As a reminder, a well-run brokerage site should be converting somewhere between 1-3% of mixed traffic to leads, with strong intent-driven pages pushing higher.

The challenge is that a fast response system matters just as much as the capture itself. Zillow leads convert at 1% nationwide, partly because they're shared among three to five agents simultaneously and the response window is brutal.

On the other hand, a brokerage that owns the lead relationship, routes it correctly, and responds within five minutes is playing a genuinely different game – one where the economics can be compelling. Here’s a scorecard of metrics that predict appointments and listings that’s a good framework for tracking if your system is actually working once you've built it.

The question worth asking your leadership team

Before your next budget conversation about website vendors or marketing spend, try this: estimate what your agents collectively spend on Zillow in a year. Then look at what your brokerage spent on its own website and lead infrastructure in the same period.

If the Zillow number is larger – and for most brokerages it almost certainly will be, often significantly – that gap is the story. Not because Zillow is evil, and not because your agents are disloyal, but because a structural misalignment in your own business has made it rational for everyone involved to fund a competitor instead of an asset.

Brokerages that figure this out won't do it by strong-arming agents or ripping up existing arrangements – they'll do it by making the brokerage website worth investing in again, by building the capture, conversion, and nurture infrastructure that gives agents a reason to believe your platform can actually compete. After that, you’ll need to have an honest conversation about what shared investment looks like going forward.

The question isn't whether Zillow is a threat. Because let’s be honest, it is. The only question is whether you’ll be the one helping them grow, or your brokerage.`