I'm in NY today, speaking at the Jeffries Internet Conference. Another Wall Street conference means another opportunity for me to tell the Zillow story to The Street. I also got to watch several other real estate companies present, including Bankrate and Internet Brands (realestateabc.com).
These conferences are usually in either NY or SF, and I always prefer the SF ones for two reasons. First, it's a lot easier to get from Seattle to San Francisco than New York. But more importantly, our Zestimates are much more accurate in San Francisco than in New York; I hate having to field a chorus of questions like "your Zestimate is wrong on my apartment", or worse still "your Zestimate is too low on my house in the Hamptons". About 90% of the homes in the San Francisco area have been Zillowed, which is extraordinary penetration for a two year old company. But these trips to New York remind me that we're making a lot of headway in New York, even if our Zestimate accuracy does lag certain other cities.
As usual, I had to answer too many times "why don't you kill the Realtors?" and "someone needs to disintermediate those damn 6% middlemen". Sigh. I've written about this before: I always have to patiently explain that Zillow sells ads, not homes. We're a media company that offers free access to lots of great real estate information, and makes money by letting our advertising partners target messages to our users.
Wall Street people more than any other group tend to discount the value that Realtors play, but I have to keep reminding them that the purchase or sale of a home is by far the largest transaction that most people do in their lives, and it will therefore always be professionally assisted. Wall Street types frequently cite the decline of stock broker commissions and try to argue that Realtors also will have their commissions eroded. A ridiculous comparison, in my opinion.
The community of real estate professionals has a real PR problem with this crowd (and probably with many others). I fought the good fight today and probably changed a few minds, but it's hard to make a dent when people have such entrenched views.
I'll address this topic again in upcoming posts. I think it would be interesting for me to talk about what I would do if I were running NAR. Clearly their current approach isn't 100% effective at convincing Average Joes that Realtor commissions are justified.
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