It has been all over the news since yesterday. Zillow announced it is purchasing Trulia for 3.5 billion dollars. Zillow is both friend and foe to Realtors, and the recent announcement is causing a stir among Realtors and local associations.
Zillow.com is one of the top national real estate websites and consumers seem to love it. Zillow receives listing feeds from many of the local Realtor associations of homes for sale. They also include FSBO's (For Sale By Owner), "pre-foreclosures" (in parenthesis because the information tends to be wildly inaccurate), and past sales. Consumers like Zillow because it is user friendly and the information is very robust. The website is popular for it's "zestimates" which estimates the approximate property value based on a number of factors.
Realtors have a more complicated relationship with Zillow. Many Realtors do not like Zillow because it is filled with inaccurate data. I can't tell you how many times a buyer has asked me about a house they saw for sale on Zillow, and it already sold two months prior. I'm not sure how these inaccuracies happen, but it is commonplace and there is a disconnect in the data feed somewhere. Not only is their listing data inaccurate, but consumers sometimes put too much faith in Zillow's "zestimates". Remember that their zestimate is figured by a computer program. They will estimate a value based on the assessed value and surrounding home sales. It does not take into account the property condition, which is a HUGE factor in price. Realtors see many homes on a regular basis and are definitely better equipped at determining the value of a house.
The other thing that Realtors don't like about Zillow is they take our listing information and try to make us pay for advertising and leads. If you find a listing on Zillow, it can be unclear who the listing agent even is. Agents that are paying for advertising are most prominently displayed. What would happen if all of the local Realtor MLS's (Multiple Listing Service) cut off the data feed? Zillow's popularity would diminish quickly if it no longer had access to this information.
As Realtors, do we continue to allow Zillow to receive our information for free, distort it, and sell it back to us in the form of advertising? Some people are worried that if Zillow grows too large, it will become the new broker and local real estate offices will be a thing of the past. If we cut off the data feed, how would the consumer feel about it? Is there some agreement that can be made between Zillow and local Realtor associations so that everyone is happy? What do you think?
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Great info on everything real estate.