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Why Zillow is Not "The Enemy"!

I hear it much less often now than 18 months ago when we first launched, and much much less now than before we launched Zillow (and everyone was sure we were going to decapitate all Realtors everywhere). But I still hear it occasionally: "Zillow is the enemy". In fact, one person went so far as to shout this at a Realtor and blogger who was wearing a Zillow t-shirt at the NAR conference in Las Vegas yesterday.

Huh?

Usually the "Zillow is the enemy" line of reasoning stems from fear of the unknown, from not understanding what we're trying to do. Let me address the four arguments that I hear most frequently.

1. "They've raised $87 million in venture capital money so they must have huge ambitions."

Yes, we've raised a lot of venture capital investment and yes we definitely have huge ambitions. But that ambition is directed at building a MEDIA COMPANY that makes money on advertising. We're like a cable TV network that has a lot of shows about real estate and makes money on ads. It takes a lot of money to build a big website with a lot of traffic and a lot of advertisers. Like CNET in technology or WebMD in health or Yahoo Finance in business news, Zillow is creating an online media property not a real estate brokerage.

2. "They're the guys that put all the travel agents out of business at Expedia, so they're going to do the same thing to Realtors."

Yes, a lot of Zillowites (including me) came from Expedia. But we've chosen a very different business model for our real estate company than we chose for our travel company, and with good reason. Unlike most travel agents, real estate agents provide a critical service and this will never change (nor should it). Real estate transactions will always be professionally-assisted. Zillow has no desire to change this. We're trying to put agents out of business? Quite the opposite -- we provide an incredible free platform for them to GROW their business.

3. "Home valuations other information that Zillow provides is the purview of real estate agents, not websites. They're doing my job for me for free which threatens my livelihood."

Welcome to the Internet era, which has unlocked all sorts of interesting information which had been inaccessible for decades. Information wants to be set free and not locked up. Like the global rise of democracy over the last 50 years, information transparency is the way of the world. It's up to you to find ways to make this work to your advantage. For example, tens of thousand of agents use the Zestimate as a starting point in their conversations with prospective clients. Sometimes inaccurate Zestimates are a thorn in agents' side, but you can use that as an opportunity to demonstrate your expertise. Dozens have even put Zillow functionality on their own websites because they've found Zestimates to be a great way to get the phone to ring ("Hi Alan the Agent -- is my house really worth what Zillow says it's worth?").

4. "Zillow is a licensed real estate broker so you are competitive or will become competitive with us."

Yes, Zillow is a licensed broker in many states. We've always been very open and honest about this fact. But we have brokerage licenses for a variety of complex legal reasons (most of which I don't even understand) and so we can belong to certain professional organizations in the industry, NOT because we intend to operate like a traditional real estate brokerage that has agents who advise buyers and sellers on real estate transactions. You can blame our lawyer for this one.

Why, oh why, would someone think that Zillow is an enemy of real estate agents?

Because we allow agents to create free profile pages on our website? (75,000 have done so)
Because we allow agents and brokers to post their listings on our website for free? (almost half a million have done so)
Because we let agents answer buyers' questions for free, as a way to get free leads (about 65,000 questions and answers have been submitted)
Because we allow (but don't require) agents and other professionals to advertise themselves and their listings on our website? (about 8000 have done so)
Because we host for free one of the most vibrant real estate discussion boards on the internet? (about 80,000 posts in the first few months and growing fast)
Because we have stated time and again that we have no plans to collect a commission from the transaction and compete with realtors or brokers?

Today's Seattle Times, reporting from Rich Barton's address at the NAR Conference in Las Vegas, put it nicely in its headline: "No reason to fear Zillow, real estate industry told". We are most certainly not the enemy of real estate agents or brokers. Please don't accuse us of this!

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Posted by Spencer Rascoff on 11/15/2007 03:31 PM

Comments (45)

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45 Comments on Why Zillow is Not "The Enemy"!

NOV

2007

I have mixed reaction to Zillow because the information that is furnished is not always accurate, and folks tend to believe what they read in black and white. If the numbers were accurate and within six months, like Realtors and Appraisers represent prices, I would like it much more. It needs some tweaking;)

I have been trying to get my listings on Zillow for 3 weeks. Tech support does not return calls or emails, we are looking to create a feed. Other than that, I like Zillow.

Spencer - I've used Zillow since they started allowing REALTORS to post their listings. Consumers want to be involved in their real estate transactions, so I let them. If we don't change with technology we will be left behind.

Spencer, Great points. I have never felt "threatened" by Zillow. I think that the data base that you are probably pulling from "tax records" is my guess is the reason that there are errors. I looked up my home and yes it was wrong so the "zestimate" was wrong because well you know the line "s in s out" Lots of county tax records were never updated. I have went an connected with FSBOs there and had an enjoyable experiance. I try to use it as a "prospect site"

Yes, these are great points but I'm still concerned with the incrdible breadth of inaccuracies that I see on the Zillow valuations. Two cases in point. I moved last year, and after the closings I looked on Zillow just for chuckles. Now keep in mind that I have 18 years of real estate sales experince, so I've got a clue. Zillow said that the house I sold was worth $78,000 more than I sold it for, and that the house I bought was worth $39,000 less than I paid for it. If I were a civilian, I would have been pretty upset. There is a subdivision where I live that straddles a ridge. The houses on one side have a view of a power plant and lots of high tension wires. The other side has spectacular mountain views facing west, so the sun sets over the mountains. True values vary by as much as 50% for the same floor plan and condition, but Zillow says they are the same. I've always liked some of the tools that Zillow offers, but if you present information to the public that is wildly inaccurate, it makes Realtor's jobs that much harder and confuses homeowners.

I have mixed reactions to zillow just because the estimates they give on homes. I have always been confused as to where the numbers come from and it cant be from the tax records or anything else.

Your Orlando & Lake Mary Real Estate Expert Heather Joubran

Let's face it. The Internet changed the world of real estate for everyone; buyers, sellers, agents, brokers, lenders and advertisers. Live with it. Is isn't going to change. Agents have to learn to use the Internet and make it work for them. Stop trying to make the industry what it WAS and learn to work within what is IS and IS GOING TO BE.

Zillow is giving the public something the public wants, real estate valuations without having to be exposed to a real estate practitioner. Zillow's service is severely flawed because valuation is very complicated and can't be done at arm's length. It's enough to create the eyes and the traffic to sell advertising. So, for that, Zillow is successful.

Zillow isn't in the real estate busines. Zillow is in the click business.

No question I would have preferred that all of the sites that get between the consumer and me would go away, but they won't. So, I just learn how to work my market my way.

We can learn from Zillow and other like sites.

I love Zillow....I love the make me move price........I'd sell everything I own for the right price. I advertise on Zillow and I think most people are more intelligent than many give them credit for.......what is on Zillow is not 100% accurate but it gives people an idea of the local market. BECAUSE THE MARKET IS LOCAL. NOT NATIONAL.

I truly believe that Zillow has encouraged discussions of this based on their platform and anyone that feels Zillow is the enemy is uneducated and unwilling to adapt to change.

THANK YOU for creating Zillow.

I have mixed feelings about Zillow as well. One thing I wish you would do is disclose ON the Zestimate the level of accuracy. In my market Zestimates are all over the map compared to actual prices... even tax assessments are closer. And, while one can go on a search to find the accuracy, it is less than transparent in its disclosure.

Just a quick word of support, obviously there are at least 75,000 of us (including me) who have embraced the technology and committed to utilizing Zillow as a tool, along with other less traditional means that bring great exposure to our listings.

I appreciate Zillow and the 3 buyers and 1 listing that I can directly link to my usage of Zillow over the past few months!

I wonder if agents would be happier if each Zestimate had a disclaimer that it is just a ballpark and that they should contact a local real estate agent for a more accurate estimate....

But then you should look at the wide disparity of listing and selling prices different local agents give for the same property....

Zillow is terrific, with the arial photos and "recently sold" properties. It would be impossible to stay REALLY current in a market experiencing downturns in some areas, but I actually advertised a listing on your site. Keep up the good work- while I wouldn't suggest it to consumers as the "end all" of selling a home, I would certainly offer up the site as a fun way to peer into the market on a very well presented venue. If it makes buyers and sellers smarter, you're doing a favor to all of us.

Never fear ze people that can not spell zhere name! I keep tellin' ya. It is a "P".

I don't know about the other agents here, but I really don't need Zillow to help me prove my expertise. Fortunately, around here, for the most part, the consumers that I run into are aware that the zestimates aren't reliable. However, there are those buyers and sellers who think they can use them as a negotiating tool, and I have to do some extra work to bring them back to reality. So, while I'm not a luddite by any means and use the internet extensively (some would say too much!), while I don't consider Zillow "the enemy", I'm not about to thank you for doing something for your own benefit that makes my job more difficult in those instances, and doesn't improve it significantly. And that creates confusion and upset in many of those not conversant with the real estate market. Sorry.

I don't fear, we are realtors and thy will always need us!! Thanks for info

There is that little aspect of consumer benefit- kind of supercedes our own inconveniences. If people want to dink around, better to do it on a site that offers information and interesting photos (rather than in my car, as I fill up the tank over and over)... :) Consumers LOVE IT.

The future and the present of real estate is the internet. They are not "the enemy"! You speak of inaccuracies and there may be some - but I see it as a way to market my listings! Everything has it's pros and cons! I am grateful for the free web sites! Thanks Zillow!

Enemy? Are you kidding? Your let's-compare-condos-to-single-family-homes-that-are-1000-square-feet-bigger zestimate algorithm is so uproariously brain-dead that one would need to stop laughing one's ass off to get mad at you.

Enmity implies drama. You're way too funny for that. A crack addicted spider monkey with a broken arm and a dartboard could pick better comps than you guys.

I just just put a listing on zillow with no problem. I just don't understand why Zillow thinks I'm from Seattle???? I swear it says Seattle under my name, and I can't fix it!

Spencer,

Zillow is one of the free information sites on the web where consumers can get their real estate questions answered. That is the power of the Internet and the direction it's heading. The current momentum is hard to stop.

Spencer - I have heard good and bad about zillow, but I feel you guys have done a great job with your product and service. I know how tough it can be and is! Thanks for keeping your chin high and your chest forward, we need people like you and your company to continue forging ahead into new and exciting heights. :-)

A crack addicted spider monkey with a broken arm?

Now, that's funny!

*Lost* Cute little monkey with broken arm, has special needs, please return if found!

Zillow Shmillow, kind of old news now, I would imagine as a media company that needs people to come to their website so that they can sell adds, times might be getting kind of ruff considering the lack of interest in the real estate industry right now.

In all honesty, I have run into many people who have never heard of Zillow. They don't dominate the market so people here don't care. Those of us in the Internet world sometimes mistakenly think that the rest of the world knows what is going on in our realm. People have lives other than on-line.

Wow, thanks for all the great comments.

To the people concerned about Zillow's accuracy (Frances, Rich, Heather, Lane, Sharon, Tricia, John, and others): I hear you. We have dozens of people working very hard on always trying to improve the accuracy of our data and Zestimates. Nationwide, our median margin of error is about 7% -- in some parts of the country it's much better, and in others it's much worse. I'm sure it's very frustrating when the data or Zestimate are inaccurate on one of your listings or a home one of your clients is considering buying (or on your own home!) and for that I humbly apologize. As you probably know, owners and agents can "claim their home" and edit their home facts and post their own estimate of the home's value -- including choosing their own comps. Nevertheless, I apologize for the times that you are faced with an inaccurate Zestimate and all I can really say is that we'll get better over time.

@Debbie, Jo, Lenn, Ryan, Michelle, Laurie, Susan, Esko, Brad, : Thank you for your comments!

@Mike: Someone on my team is following up with you.

@Natalie: Someone on my team will follow up with you.

@James: Re your comment about lack of interest in the real estate industry... Believe it or not, our site traffic is up 20% versus the same period last year. I think in a down market people seek even more information about real estate, not less. At least that seems to be the case with Zillow.

@Jennifer: I totally agree. We're hardly a household brand. We've only been around for a year and a half and most people haven't heard of Zillow yet. We're working hard to change that, of course, but yes you're right.

NOV

2007

Zillow is great for exposure. If buyers and sellers are looking at it ,then I think we should post there. People have enough sense to know it is inaccurate data. I have received leads as a result of my exposure there.

Zillow has its share of detractors who are very vocal on AR - but there are also many of us who use and appreciate the tools provided by Zillow.

I appreciate the Zillow reps who come on the front lines of AR in the Zillow discussion group and present information to us and take back some (hopefully) constructive criticism for consideration by management. I believe these reps contribute to our understanding of the products and technology that are Zillow.

I am one of those who has marched to the defense of innovation and technology in these pages and in other forums. Our buyers and sellers are going to use Zillow and we need to be familiar with the interface and information provided so that we can bring our professional expertise into the conversation with the client to improve on the accuracy of the Zestimate, if necessary.

Thank you Spencer, for all you do.

I feel Zillow is a tool. Technology is here to stay and you have to learn to use it.

Spencer,

Welcome to Active Rain,

Great post, but I think the overall attitude of the post is what is getting under the skin of most Realtors here. You look at Trulia and it sets up the agents to answer questions and be experts, however, most of the content on Zillow is very ANTI-Realtor. I'll go toe to toe vs any discount or free service any day of the week and can tell you, not only am I cheaper than a free service, there's less legal liability and headaches at the end of the day. So no, Zillow is not threatening at all, but the attitude there is certainly what bothers me. I don't want to get into a competitor comparison, but if you look at the two sites (which consumers feel are essentially similar, like coke and pepsi) you'll see a decidedly different attitude represented there. Zillow's stance seems to be, "... As a last resort hire a Realtor."

For Zillow to be useful to me, it needs to provide the accurate information that everyone clamours about. We're talking about the supposed information that would put some Realtors out of business. The comparables that are used are wrong on similarity, but more importantly, they are inaccurate. It would appear in some cases that the tax records that are used are based off of assessments. Most consumers don't realizes that assessments are not appraisals.

To be honest, I'm glad Zillow and Trulia are here. It'll weed out the agents that don't realize, that our job was never about finding homes or pricing them even. Our job has always been that of an expert negotiator and facilitator. Trust me, you'd much rather hire me to represent you, than see me sitting across the table against you.

I don't have a problem with Zillow. I guess my concern is that if internet businesses take over, what will that do to the humanity of the business. Right now, this is still a people business. What kind of world will it be when we no longer physically interact, but only log on the interact with the world?

Zillow is a godsend. They did all the work that would've taken a small company of my size, years of development to create. I love free info, bar none!

Josh - Thank you for your comments. Zillow's stance is definitely not "as a last resort, hire a Realtor". If you've gotten that impression, than I apologize. That's definitely not my (or Zillow's) attitude.

These days you must embrace change and technology. If you dont you will be left behind

So, is it not possible to embrace change and technology while not embracing Zillow? I've been embracing change and technology all the way back to when I was studying the cutting edge programming language COBOL, and before, and since. That doesn't mean, in my viewpoint, that I must embrace all implementations of it, but rather that I must pick and choose among all those that are out there and embrace those that are implemented best. Actually, simply participating on AR is a sort of screen for people who do embrace change and technology, isn't it? Those who don't, aren't here to debate the matter. ;-)

Dead on, Tricia. COBOL -- I'm not worthy. I started out in "C". :)

Just yesterday I had received an email that linked me back to Zillow. They have come a long way in their effort to be a great consumer site. This posting was very helpful in explaining that Zillows intentions are not to replace real estate agents. I think that the timing of their launch came at the same time that Redfin hit started their campaign. I think as agent we are and need to be somewhat guarded to protect our livelyhood. The trick is sorting out who is bringing us new tools that can be beneficail vs. true competitors trying to undercut our business.

Great post Spencer! I just got back from NAR in Vegas where it felt so good to represent Zillow. I heard a lot of encouraging words from Brokers and Agents, and very few negative ones (in fact I can't think of any right now!). So I think the industry is really starting to embrace Zillow and understand that we really aren't the enemy!

Thanks for the post, Spencer -- very informative. I am not afraid!

NOV

2007

When the market gets so impersonal that a list of property's take over the relationships we have with buyers and sellers and all sales are on-line I will worry right now I need to take care of business and watch what others are doing and do what the successful people are doing and don't worry about the competition work with them to keep us all strong. Thanks.

Hmm. I haven't viewed Zillow as the enemy, but I also didn't realize some of the offerings. I think I did create a profile at some point and forgot about it. I think I'd better look into that.

NOV

2007

@Michael (re Zestimate accuracy): there's more info than you'd ever care to know about our accuracy here: http://www.zillow.com/howto/DataCoverageZestimateAccuracy.htm

The way we measure accuracy is to compare the Zestimate with sale prices once houses sell.

Great questions, Michael... I was trying to figure out the logic of the chart you posted myself (beyond the tardiness of the reporting)...

Let me start with New York as it's first on the list... 85% complete, 52% of complete sales are within 10% of the actual sales price.... Median error 9.5%.... With no information regarding the other 48% (of only 85% of work completed) I'm bound to give this a school grade of 'F' - Perhaps now that it's 21 months later, the scores have improved (?).

Spencer, I understand you are catering to agents as your clients, but it seems as though you are really crawling over appraisers to get there.

John Lockwood, you are my blog-comment-hero for the day.