Zillow and the CFPB

By Ari Karen

Ever heard the saying “Guns don’t kill people…”?  Well neither does Zillow.  It also doesn’t violate RESPA as some have reported, nor is its use per se going to get you in hot water with the CFPB.

Like any co-marketing it can be used correctly or incorrectly. For instance, if you pay more than your fair share of the leads, it could be a problem.  Similarly if you have secondary agreements to refer business or qualify leads for the realtors then of course such arrangements could be problematic.

In terms of the reports “from the top” that Zillow is a problem because it is a referral and not a lead, this assertion makes no sense. Indeed, if simply having a name in conjunction with a realtor was a referral there would literally be no way to do any co-marketing without running afoul of RESPA.    Moreover, how could anyone be in a position to “refer” business when they themselves have literally no relationship with the consumer and no contact with the consumer?  The entire point of Zillow is to provide first contact.  Hence, the realtor is a complete stranger whose referral would be meaningless to begin with.

From my perspective, there is little substance to the hearsay from unnamed sources that has gotten everyone excited about Zillow.