Anyone have any opinions about the Zillow Co-marketing program for realtors where the get originators to pay up to half the cost of a zillow listing ad? I've got originators coming at me from all directions on this because realtors are jumping on this huge as a way to get marketing paid for by lenders. Even though zillow alludes that it is RESPA compliant, I don't trust that and believe it's pretty questionable. I've looked at what the originator reference looks like and it certainly doesn't appear a 50/50 split that I could stand behind as pro rata share. Also not sure what documentation zillow provides to allow us to document that split. Also if you do this do you require your originator to have an actual marketing agreement signed by the realtor or let the originator select realtors autonomously without a formal marketing agreement?

I ran into the same issues and we have not proceeded with it. The difficult part about it is that the realtor must invite the originator to advertise on their page. If the originator agrees, it lowers the originator's advertising bill. The more originators, the lower the ad bill for the reatlor. The realtor isn't getting less advertising. They are getting the same amount as before (webpage size is the same, their name prominence is the same, etc) but just for less. I just think the way in which it's setup is tricky. The realtor is getting a heavily reduced ad bill thanks to the originator, who is getting a small blurb at the bottom or side of the page (if I remember the formatting correctly). If the origiantor could buy the spot or blurb on their own, I think that would help - without the realtor's ad bill being reduced. Linking the two gives rise to implications.

I try to think of a full page newspaper ad analogy where each gets to pay for their half. In this case, the realtor has paid for the whole page but reserved three lines near the bottom. Each originator that pays gets to be on a reserved line at the bottom of the page. However, if three orignators sign up, the realtor only pays half price for the full page. I see it as a bit dangerous until there's a clear opinion concerning the zillow setup specifically or something similar like a webpage.

It was mentioned, I think by zillow or someone who had dealt with them previously, that some of the bigger banks have agreements with zillow directly for advertising. That was the next route we where looking at but management shifted to other priorities and that project fizzled.

Zillow has not provided any information that can justify the 50/50 pro rata fair market split much less the 90/10 split involving 5 lenders and 1 agent. I wouldn't participate in any co-marketing program until they can definitely establish the fair market value for the pro rata share use by each party.

Thanks TomTom and respalawyer. I've been pushing back against this for the reasons you mentioned. It just doesn't pass the "smell test" to me as far as the percentages go. Plus frankly I don't think it's that effective as an advertising strategy.

I'm not sure if BOL is offering anything on the topic but I got an email solicitation from Financial Services Compliance <compliancewebinars@saiglobal.com> for the following.

RESPA Section 8 Enforcement Trends:
The CFPB Sets its Sights on Marketing Services Agreements


You may want to research this some more before entering into a MSA with Zillow or any other company for that matter.

We researched Zillow and decided not to participate.

cowgirlsrule +1. We did the same. If you google, there are some articles suggesting enforcement is imminent.