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Zillow's New Zero-Compensation Showing Agreement

In the wake of the National Association of Realtors (NAR) proposed settlement from the Sitzer/Burnett lawsuit, the real estate industry is poised for change, particularly regarding the relationships between agents and buyers.

The settlement stipulates that buyers will soon be required to have written agreements with agents right from the start of their relationship, a move aimed at enhancing transparency and professionalism. However, this shift has opened the door for various interpretations and implementations, the most recent of which is Zillow's new showing agreement.

Understanding the NAR Lawsuit and Its Implications

The NAR lawsuit settlement aims to establish clear, documented commitments between real estate agents and buyers from the initial interaction. This change is intended to protect both parties by ensuring that buyers are aware of whom they are dealing with and under what terms, potentially reducing conflicts and misunderstandings later in the buying process.

Zillow's Response: The New Showing Agreement

Zillow, seizing the opportunity to innovate, has introduced a non-exclusive, no-compensation touring agreement. This agreement covers the initial property tours and is valid for just seven days. It's unclear whether Zillow will require agents who buy their leads to utilize this agreement.

Click the button below to view a copy of the new agreement:

Zillow Touring Agreement
Download PDF • 26KB

Here’s where a healthy dose of skepticism is warranted:

  1. Optional, Not Mandatory: It's crucial to note that this form is not required by NAR or the North Carolina Real Estate Commission (NCREC). Zillow's initiative is merely an optional tool available to agents and buyers. There is a possibility that NCREC or NAR may release their own forms in the coming months, which could supersede or differ significantly from Zillow's version.

  2. No Compensation for Agents: The agreement specifies that agents are not entitled to any compensation for the touring services provided under this form. This condition could potentially leave agents "holding the bag," as they might invest time and resources in showing properties without any guarantee of compensation unless a separate, compensatory agreement is signed later.

  3. Non-Exclusive Nature: Perhaps the most contentious feature of the agreement is its non-exclusive nature, which does not require the buyer to work with the showing agent if they decide to purchase a property. This opens the door for a scenario where a buyer uses the services of one agent for tours but then engages another agent to negotiate a purchase, thereby bypassing the initial agent.

A Closer Look at the Potential Risks

While the agreement promotes flexibility and reduces pressure on the buyer, it introduces significant risks for agents. By providing a structured yet non-binding framework, it could encourage buyers to shop around for agents after the initial tours, potentially diminishing the value of the initial agent's work.

Zillow's new showing agreement offers an innovative approach to the early stages of buyer-agent relationships, but it's not without its flaws and risks. Agents, in particular, should weigh the potential for lost time and effort against the broader accessibility and ease this agreement might provide to prospective buyers. As always, the devil is in the details, and in real estate, those details could mean the difference between a successful transaction and a frustrating experience.

Will you be using this new agreement with your clients? Share with a colleague in an upcoming CE Class, or drop a comment below!


Zillow. (2024). Zillow’s touring agreement. Zillow Group News.

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