I have posted a few blog entries, and comments about issues I have with Zillow. I have been asked what my "beef" with Zillow is, so I figure I might as well just lay it out there. This is a post explaining my concerns and will leave it open to discussion and allow each person to form their own opinion.
First off, let me state this emphatically... I love this business. I am a mortgage professional. I am not a Realtor or real estate agent, but my business is directly tied to that of the real estate agents. So in general, I love what we do. I love the professionalism that most of us, at least here on Active Rain tend to work within. I love helping a home buyer discover that they can actually buy a home and acheive that dream. I love going to the closing and seeing the smiles and excitement and knowing that I was a key part in that family's happiness. It is an honor to do what I do.
So in that light, and with everything that our industry has gone through, I kinda get concerned when I see things that have great potential to cause our industry harm. That is where I see Zillow, in its current form.
This post will not be a personal attack, but David with Zillow has addressed me directly, so in some of this I will answer his questions. And bear in mind.. this is simply my opinion, so one is free to accept it or dispute it. That is the freedom we all have in this great country!
1. The Positioning of Zillow. Zillow is an advertising medium designed to attract visitors and make revenue off of advertising. Contrary to what David said, I have no problem with Zillow making money. I encourage that, as making a buck is what keeps us all going. I do not hate Zillow, Google or any other website for making money in advertising. I too have made a buck or two in advertising... its a great medium.
My problem is in how Zillow has positioned itself. Call it great branding, but Zillow has positioned themselves to appear to be an information portal. They are working diligently to offer free "tools" to help "educate" consumers to make good choices in real estate. However, the tools they offer are often grossly inaccurate and very misleading. Their own disclaimers tell you this, if you read the numbers. However, most Americans do not read the disclaimers. We breeze through the license agreements when installing software. We assemble things without the instructions. It's our nature. So Zillow can get by without too much issue here because people don't take the time to read it.
If you are going to position yourself as something that offers advice, especially on something as important as property values, you better have your stuff together. This is not predicting the weather. People have lost millions due to the abundance of misinformation, and the gross inaccuracies with Zillow's "zesitimates" are a major concern. I hope they get this fixed and quick.
2. Lack of Accountability. If an appraiser miscalculates the value of a property, he can lose his license. If a Realtor misrepresents information on a property, they can lose their license. If Zillow gets it wrong, oh well. Yet, they have positioned themselves to be the "edge in real estate." In my opinion, you can only be an "edge" in anything if you are an expert, and experts usually get it right most of the time. This is where Zillow fails. And without accountability they can be off and it doesn't matter. However, Realtors and lenders have to deal with the mess. We constantly have to explain values and the inacuracies of Zillow's tools.
Side Note Realtors: How does it appear to a consumer if as a Realtor you are trying to explain how "off" and inaccurate Zillow is on a property's value, yet you feature your properties there? Mixed message I think... just my opinion.
I would love to see some sort of accountability here. David at Zillow has claimed that they are no different than other real estate websites out there that show properties for sale. This is something I disagree with. Other websites, like Trulia for example (also an advertsing medium) list every home they can find for sale in one great place. The difference... they don't express opinions on the values of those homes. This is a KEY difference. Zillow tells your clients how much the home is worth, in most cases in direct conflict with what you as the actual professional have determined.
The arguement that visitors would require substance on the website to keep coming back is not valid. Sorry. There are way too many websites and companies in existence that offer no substance, yet get major traffic. Even Paris Hilton gets attention, and we all know substance is severly lacking there!
3. Mortgage Marketplace. Now this one hits near a sore spot for me, sorry. As a professional mortgage lender, I strive to provide real numbers and quotes to my clients. This is after I have gathered enough information to do so. I do not use rates in any of my advertsing simply because by being honest, I will always be higher than other ads out there. Zillow's Mortgage Marketplace allows one side of the equation to not only be anonymous, but also allows this anonymous side to rate their experience with the lenders. (we'll cover that in concern #4) This is no different that a borrower calling 10 lenders on the phone and saying, "I got excellent credit... what's your best rate?" Well, it is different. They get to post that and have the lenders clammor to tell them.
Do you think there is much reality happening here? You have an anonymous borrower that is anonymous for a reason. In this situation, the only factor for making a decision is a rate and some fees. But there is SO MUCH MORE to a mortgage than a rate. Of course, with mortgage rates having been so low for so long, the general public has lost the idea that there is more to it than a rate. And now with rates increasing everyday and changing 5 times a day, it is almost impossible to quote a rate and still honor it an hour later! But this can lead to feeling ripped off, lied to, misquoted, baited and switched... all the stuff that we as an industry need to STOP if we ever want be held in any high regard again. Zillow's system feeds the negative view much more than the positive view we as an industry need and want.
4. Feedback system. I believe it was David (but could have been Sara) that claimed the feedback system on Zillow is like that of Ebay, allowing borrowers to rate lenders based on their experience much like Ebay's buyers and sellers can rate each other. The issue here is that one side of Zillow's system is anonymous and only the anonymous side gets to rate the other. This is unfair and makes the system fallible. Although David has stated several times that borrower's can not rate a lender unless they have made contact, this CAN, and in fact has happened. The problem here is that Zillow relies on the anonymous borrower to "warranty" that they have contacted the lender before rating them... but as of now Zillow has not provided a real way of stopping them if they have not in fact done so.
If the borrower has indeed rated a lender wrongly, Zillow can remove the feedback. But what good is this? Imagine a bad lender claiming viable ratings as inaccurate. Or worse, imagine a lender that consistently offers real numbers (Mike Muller for example) getting negative feedback over and over because his quote was just higher. After a while someone at Zillow would probably say something like... "Come on, they can all be unjustified!" But what if they are? This system needs to be fixed... it is seriously flawed.
If Zillow wants to compare their feedback to Ebay, then follow Ebay's example. Both sides have to be visible (no anonymous parties) and there must actually be a transaction to rate, not just some random quote. Ebay will not permit feedback unless you have been involved in a transaction with the other party, period. Just because you bid on an item, you can not rate the other party. It's just not an option!
5. The fact that this is all built on the backs of real estate and mortgage Professionals. Sure, we don't have to pay them for advertising homes or mortgages on their website. And they don't pay us. However, we end up here with the short end of the stick, having to overcome "zestimate" values that are way off, and mortgage rate quotes that are minimialized at best. Zillow makes money (again, good for Zillow) at the expense of our jobs. Our jobs get harder, not easier. Bottom line is that OUR reputations are the ones at stake... Zillow is just a website.
Sure, there will be success stories and to those people I wish congrats! But Zillow has some serious issues it must address. I will give them kudos for the branding image they have created. All I really want is to see them actually live up to the image.
So there you have it. Those are my beefs. Again, this is not a personal attack. I think Zillow has the potential to introduce some really cool suff, but they really need to get these items addresses quickly. Otherwise, we in our industry that are licensed professionals may very well suffer.