Zillow Expands ‘Post-Pay’ Premier Agent Model To 2 New Markets

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Portal giant Zillow this week revealed that it is expanding an “enhanced market” program, which notably includes an exclusive “post-pay” version of Premier Agent, to two new cities.

The expansion will see Zillow’s enhanced market program come to Charlotte and Durham, both in North Carolina. The program was first announced a year ago, at which time Zillow said it was piloting the concept in Raleigh, North Carolina, and Denver, Colorado. In the time since, the enhanced market program has also expanded into Phoenix, Arizona, and Atlanta, Georgia — making Charlotte and Durham the fifth and sixth metros to get the program.

For agents, probably the most relevant part of the enhanced market program is the way it handles Premier Agent, Zillow’s popular lead-generation service. Traditionally, agents who participated in Premier Agent pay up-front for leads in the hope of later closing deals.

In the post-pay version, however, agents don’t pay anything until they close a deal. When a deal does close, the agents then pay a “success fee.” The fee varies depending on a property’s sale price and location but is typically between 30 percent and 35 percent of the participating agent’s commission.

Perhaps the most eye-catching part of the post-pay model, however, is that it’s only available via invite to top-performing agents. That means in markets switching from the better-known pre-pay model to the post-pay model, many Premier Agent users will be cut from the program.

Both this week and a year ago Zillow declined to say exactly how many agents might get cut in the switch to the post-pay model. However, when the program launched last year in Raleigh and Denver, the company said “several hundred” agents would ultimately be cut while “hundreds” would continue with Premier Agent.

Presumably, something similar will happen in Charlotte and Durham.

News of the shift to the post-pay model in Charlotte and Durham prompted chatter on social media, with some commenters framing the move as an end to Premier Agent.

However, Zillow told Inman Premier Agent is not ending. What’s happening is merely a shift in some markets from one payment model to another. The company also said that both the pre- and post-pay models continue to be important and long-term parts of company strategy.

The post-pay model — which has existed in some form since 2019 under the name “Flex” — is also available in other markets via invitation. What makes enhanced markets noteworthy is that they operate exclusively with the post-pay version of Premier Agent.

Zillow also told Inman that the post-pay model is merely one part of a broader strategy for enhanced markets. Aside from changes to Premier Agent, the enhanced markets also get access to a variety of other features, such as real-time touring, which debuted last year in Atlanta.

The enhanced markets are also where Zillow is testing its ability to integrate various other services, such as Zillow Home Loans.

All of these efforts are part of Zillow’s much-touted efforts to ultimately build a real estate “super app” — a project the company announced shortly after bowing out of iBuying. So far, no such app is widely available to consumers. But the expansion of Zillow’s enhanced markets indicates the company is actively working on and expanding features that will likely one day be part of the app.

Related to the super app, Zillow also announced last week that it has promoted Jeremy Hofmann — an executive who has played a key role in the super app program — to the position of chief financial officer.

While the super app’s impact remains to be seen, agents in the immediate term will likely be most interested in changes to their lead generation toolkit. And on that front, Zillow CEO Rich Barton wrote earlier this month in defense of a consolidated network of agents who are best able to convert leads.

“We increasingly believe,” Barton wrote, “a tighter set of partners allows us to deliver a better customer experience and allows us to test new products and services rapidly along the way in service of integration.”

Email Jim Dalrymple II