Addressing investors after a Q3 earnings report—in which the company greatly outpaced the broader industry and beat its own expectations—Zillow Chief Financial Officer Jeremy Hoffman said the portal giant is expecting continued tailwinds from broader changes to the real estate industry.
“We work with the best partners, and we provide the most technology. So we expect our (premier agents) will deliver value and get paid, because they provide great service,” he said. “We and they are sharetakers in really any evolution or dispersion of the industry.”
With revenue up 17% year-over-year to $581 million for the quarter, and residential up 12%, Hoffman and Zillow CEO Jeremy Wacksman both said they were “pleased” with how the company has performed in the wake of the NAR changes, and also touted execution of a larger growth strategy focused on digital offerings and integration into a “housing super-app.”
Rental revenue also grew 12%, and Hoffman credited a “sustainable supply of unique listings” and “high-quality renters” as rentals now make up more than 20% of the company’s total revenue.
“The long-term opportunity (for rentals) is one we think is well beyond the $1 billion revenue mile-marker we put out there,” Hoffman said.
Mortgage revenue grew 63%, primarily driven by purchase loan originations, although Zillow still reported a net loss of $20 million, down from $28 million in Q3 2023.
Other positives include the company’s new Zillow Showcase product, a “premium listing marketing package” launched early this year, which now make up 1.5% of new listings, according to Wacksman. He also touted new features curated for consumers, including climate risk data and AI search features.
Several investors asked for specific assessments of the company’s adaptations to policy changes—both current and those potentially on the horizon—as the industry at large continues to parse out the impact of the settlement on different business models.
While some had speculated that mandatory buyer agent agreements would be a drag on Zillow’s lead-selling model, with the company previously launching an abbreviated “touring agreement” to get buyer agents and clients connected, Wacksman said the jury is still out as far as the big picture.
“The buyer’s agreement—we don’t have any concrete data to share other than to say we look at it as really helpful friction for the buyer. It’s an education process. It’s getting them through a really necessary education step, and it better prepares them to meet the agent,” he said. “(The touring agreement is) available on more than 90% of touring connections nationwide. And we’ve worked really hard to customize it where necessary, by state.”
That “healthy” process, Zillow hopes, helps buyers know what to expect before more substantive conversations with a buyer agent, while still allowing them to set up home tours under the new rules.
Another investor asked directly about Clear Cooperation, which Wacksman addressed in a recent podcast appearance, saying he supports the policy overall. He provided more context to how the company might respond to a potential repeal and the overall philosophy of Zillow when faced with a major change in the listing service industry.
Wacksman started by saying that the company’s advocacy principles “have been consistent for some time.”
“Zillow was founded to help turn on the lights and provide free access to buyers, sellers in their real estate industry and changes to rules and cooperation that would pull listings off MLSs so that Zillow and others couldn’t share as many of them. That’s just not good for buyers or sellers. It’s also not good for agents,” Wacksman said.
But he also claimed that potential change wasn’t “as much of a business issue for us right now,” with Zillow being large enough to ensure it is able to provide inventory and listings regardless of changes.
“We will always find ways to get our share of inventory to create that experience for buyer-sellers and connect them with great agents,” Wacksman said. “You know, the U.S. real estate market is the most transparent market in the world because of policies like this. And we’d love to see those policies strengthened so we can build great businesses and consumer experiences on top of them.”
