Is Zillow.com going to HELP or HURT the Realtors?... Something to think about!

Arina, I wonder how much this will affect home prices. It may even make it easier to put the house on the market at the right price, as there will be an outside force that the seler will be able to check with to evaluate their listing price. If we do our homework, this could work out well for Realtors.

Arina-

Zillow's business model is advertising -- we're a media company. The advertising business model has absolutely nothing to do with commissions. Zillow is focused on connecting real estate professionals with buyers/sellers by giving Realtors numerous ways to market themselves for free & advertise listings for free to the 4 million people that visit Zillow each month.

Please have a look at this post on Zillow Blog that Rich wrote in March - http://www.zillowblog.com/really-we-are-a-media-co-really/2007/03/

Hope this helps clear up any confusion about our business model.

 

 

 

These companies are definately to be watched.  Look at the lawsuit with housevalues.com that is going on.  Unreal expectations are generated from these sites.

I agree, Most of the time Zillow info. are detrimental to seller as the estimate they show is far below the correct market price. 

Zillow is a scam and they always seem to be the hindering factor when it comes to buyers who surf the net before purchasing a home. They believe everything they read and I think zillow is dangerous in my book!

Zillow is at least 100k+ off very often in Portland. No threat there...

Zillow in its current form is not an immediate threat, but could be in the future. Despite  having agents advertise their listings, they represent an attempt at a radically different model... they and others call it Disintermediation- a fancy word for a Realtor NOT guiding the transaction any more- (we are the intermediaries) disintermediating US from the transaction.

They are a potentially huge threat though because they are financed by gazillionaire Paul Allan  of Microsoft fame.   There isn't any doubt that they look at our commissions with longing eyes.  They pay their "Customer Service Representatives" a salary to negotiate and close deals, and rebate 2%. Yes 2%

The good news is that after spending buckets of millions in Seattle, they are claiming only a 2.5% share of the market, and are not believed to be profitable.  It is not exactly catching on... if you'd like to see a great video of Zillow's Rich Barton and NAR's very own President Dale Stinton from last week's Inman Connect, meet "the Monster" here- its very informative

They just released their 2nd quarter numbers, and their aggregate numbers are claiming 9% appreciation in Charlotte, NC over last year, our numbers from the MLS have it at about 4.5%-- half theirs, See more details here

Hi Ariana, it's David G from Zillow,

This comment was also posted to your follow-up post on Zillow.

Thanks for writing; from the range of reactions you've received to both posts it's clear that some professionals are still struggling to understand the role of online media companies in real estate - and encouraging that some "get it." The important thing to remember is that your clients are on Zillow - to best assist them, you should understand the site and learn to accurately answer their questions. A discussion about Zillow or Zestimates is a great way to illustrate your expertise but merely dismissing the site won't impress anyone. I'm glad to help and will try to address all the issues raised here. Let me know if you have any more questions;

- Zestimate values are automated estimates based on public records from the tax assessor and recorder's office in your county. We don't visit your home and so can't possibly know every detail about its current condition. Zillow is one of MANY websites publishing home value estimates. Automated valuations are a starting point when researching house values but they're not the final word - consumers seem to understand that.

- Zestimate accuracy varies by region and from one home to the next. There are many reasons for this variation in accuracy but it mostly relates to the quality and completeness of the public records. I recommend that you know what the Zestimate accuracy is in your region and spend some time on the site so as to equip yourself to explain automated valuations to your clients.

- A few different independant studies have shown that there is no bias in Zestimate accuracy. That means that Zestimates have an equal chance of being high as they do of being low. The opinion that Zestimates are "always low" or "always 100K off" are incorrect.  

- Zillow is the 2nd most popular real estate website (according to comscore). More than 80% of your clients start their search online. 4.3 Million people visited Zillow last month. Advertising your listings on Zillow is free. Expertise in online marketing is rapidly becoming a differentiator between excellent and inexperienced Realtors and consumers are learning to tell the difference.

- Regardless of Zestimate accuracy, there is no good reason not to post your listings for sale on Zillow. In fact the opposite is true. If you post your listing your sale price replaces the Zestimate value as the most prominent information about the house. You're also far less likely to be low-balled with a Zestimate value if you've let buyers know that you know what the Zestimate is (by posting your listing for sale on Zillow.)

Terry -

Where do I start? You have Zillow very confused - it seems you've mistaken Zillow for a discount brokerage. That's incorrect.

Please note that:

- Zillow's not financed by Paul Allan

- Zillow doesn't broker real estate transactions.

- Zillow does not offer buyer rebates.

- Zillow does not earn real estate commissions.

I do recommend that you watch Rich Barton's duet with Dale. Realtors are partners, not competitors. We are a media company (like your local newspaper.) We earn our revenue from advertising (like your local newspaper.) Zillow's a great place to advertise YOUR listing (like your local newspaper used to be.)

It's easy to explain the difference between house value trends that Zillow reports and those you get from a recent sales analysis in your MLS. MLS trend reports only consider the values of the small set of homes that sold in the period under consideration. Zillow's trend reporting on the other hand considers the change in values of all homes - not just those that recently sold. Using median recent sales to draw conclusions about house value trends is a flawed approach that is unreliable and easily influenced by a change in the mix of the homes for sale. The difference in NC would be caused for example if most new construction was focused on affordable housing - or if the market for luxury homes has slowed while that in middle-class neighborhoods has continued to accelerate. I hope that makes sense.

I was looking at zillow listings from our local market the other day. The trouble with the zestimates is that real estate is truly a LOCAL business, you can't get away from that no matter how hard you try.  On one listng, the "zestimate" was driven down by two factors.  One comp was in the right municipality, but in a completely DIFFERENT neighborhood.  It's like comparing apples and oranges.  Another comp had a White Plains street address, but the municipality was Greenburgh. Once again - comping apples and oranges.   Then eager buyers come in with ridiculously low asking prices based on a "zestimate" that made no sense in the first place. 

Zillow's zestimates are definitely not an accurate way for homeowners to base their listings price. It has become a challenge for a lot of Realtors to convince prospective sellers from setting a realistic sales price because of Zillow.

I have found Zillow's Zestimates to be inaccurate in my area, with the error on the high side. I use that to my seller's advantage and include a "Zestimate" with my home brochure for the buyers. When you can show a Zestimate at $285,959 and a list price of $259,900 it gets the buyers thinking.

Zillow compares a home located on the golf course with one that backs to a busy road and makes no adjustment to the value. It is a general price of all of the houses around the subject property with no weight given to location, amenities and condition. It's the real estate agents job to help their clients become informed consumers. Offers and list prices should be based on a detailed comparative market analysis, taking into consideration all factors that effect the value of a home.

I certainly would not make one of my largest financial decisions made on a "Guess estimate" or a "Zestimate"

 

Arina, thanks for the post

 

I tend to find Zillow's Zestimates way off base...they were really high a few yrs. ago & are now really low.  I don't think what they are trying to do is bad, its just very difficult to price things without taking into consideration the condition, upgrades, location within a neighborhood.

Arina, don't let that "gentlemen" from Zillow cloud the issue. You are absolutely correct in the "misinformation" they spew onto the public. The real estate industry has enough credability issues and here comes Zillow to add to the stew.  IN MY AREA, I have documented to the area manager of Zillow & one of the AR Zillow princesses that their information is totally flawed.  Most of the area's listings in my zip code of 60193 include towns up to 20 miles away. Then later in the blog Zillow acknowledged that they sometimes don't have enough homes listed in a particular area & then "fill" with others.  My point -  you are misrepresenting to the public that you have listings in 60193.  I doubt the public would go to a site that only has 10 homes on the market in 60193. Why bother?  That's another point, why bother with Zillow!

Mr. Gibbons above is just clouding the issue with other nonsense about Zillow being a discount brokerage, etc.  The real fact is MISINFORMATION to the public.  They(Zillow) get to do it and the general public doesn't have a clue!

 

Did you ever think you would see  that day, that Zillow would actually own ActiveRain - still shaking my head.