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Zoocasa responds to industry critics

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Zoocasa’s broker of record Darryl Mitchell wants to set the record straight.

Since it launched in 2009, the Rogers-owned site has created a lot of controversy in the real estate community. It began when Century 21 successfully sued Zoocasa for scraping listings from its website and continued when Zoocasa hired Lawrence Dale, who as owner of Realtysellers had launched a series of legal challenges against organized real estate. Dale has since left the company.

Now, Zoocasa says it still has to battle against the conception that it is anti-Realtor; that it is a commission discounting firm; that it is trying to eliminate the role of the real estate agent so all transactions can be conducted online; and that it doesn’t listen to industry concerns.

“The misconceptions about Zoocasa from some Realtors are plentiful,” says Mitchell, adding that the belief among some real estate professionals that Zoocasa is anti-Realtor or competition for salespeople is completely false.

“We believe that there are many qualified agents working at credible brokerages across the country,” says Mitchell. “Zoocasa’s services are intended to complement an agent’s and brokerage’s current business through referrals. We see our model as being very much a performance-based marketing opportunity for qualified, high-performing, customer-service-focused agents who are looking for ways to grow their business.”

Mitchell says Zoocasa doesn’t work with just anyone who expresses an interest in partnering with them – that the agents and brokerages Zoocasa establishes a relationship with have been carefully selected based on their ability to provide what he calls “the ultimate customer experience.” Considerations include reputation; number of years in service, number of transactions completed each year, demographic requirements and their ability to communicate with the consumer using various languages, methods and technologies. The end goal, he says, is to have agents who, regardless of their brand, are trusted, seen as experts in their field, treat the customer well and make it as easy as possible for the customer to do business with them.

Zoocasa typically partners with agents who have at least five years of experience and handle a minimum of 12 transactions a year. It currently operates in Alberta, British Columbia and Ontario.

Mitchell says many referrals come from consumers who want to directly connect with a specific agent after reading their online profile, which makes it easy for consumers to see the agent’s attributes.

Darryl Mitchell

Darryl Mitchell

The second way referrals come to agents is directly from the Zoocasa customer service team, which is currently staffed by licensed, salaried agents who are there to help the customer and provide information, but who do not do any selling. Both methods also help the agent by providing a quality, pre-screened lead. Mitchell estimates Zoocasa generates two or three quality leads a month for their partner agents.

For their part, Zoocasa receives 35 per cent of the agent’s commission entitlement as a referral fee, with almost half of this amount paid back to the consumer as a closing gift in the form of a cash rebate. For example, if the property’s purchase price is $400,000 and the agent’s commission is 2.5 per cent, the agent is entitled to receive $10,000 in commissions. Zoocasa receives 35 per cent, or $3,500, of this $10,000 commission, of which 15 per cent, or $1,500, is given back to the consumer.

Mitchell says he’s heard some agents complain that Zoocasa is nothing more than a commission discounting firm and that it costs more than other lead generation programs – two other points he is quick to dispute.

“Some agents have said that the referral fee should be closer to 25 per cent, but we aren’t just throwing names out to the agent,” says Mitchell. “We’re providing better-quality, pre-screened leads.”

He sees nothing wrong with providing the consumer with a cash rebate thank-you gift on closing. He says some agents discount their commissions in order to secure a contract, and the majority of agents provide their clients with a gift on closing. The cash rebate, he says, is a practical way of thanking and helping the consumer out.

Mitchell says Zoocasa’s research has indicated that although it’s a nice incentive, the cash rebate is not the main reason consumers use Zoocasa. People choose the company, he says, because they want to take away the hassle of finding their perfect agent. Moving forward, Mitchell says Zoocasa will find ways to evolve the cash rebate by combining it with other value-added services related to the real estate transaction.

“At the end of the day, innovation stirs things up,” says Mitchell. “Just look at what Uber is doing for the taxi industry. And when the innovation comes from a big company like Rogers, everyone pays attention and the reality is it can be one of those love or hate types of things.”


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