Much has been written about the beta launch of Zillow recently. Mark’s recent post described a parallel to other industries, the resources that Zillow brings to the table and how they engage the consumer.
Well my comments are meant to amplify that. Zillows business model that supplies online home valuations has been cited as being inaccurate. My simple tests on properties that I am familiar with, seemed to be out of line with reality. I too, question the Zillow home valuations at this point.
And that is my point - its at this point. Look for the model to be improved and additional services offered.
Zillow was launched in beta form - that means it is still under going development ands testing. Many of the management team at Zillow came from other firms that made their mark by using the web to engage the consumer and in particular at Expedia, the online travel service. Something Zillow’s CEO Rich Barton said at the recent Inman Connect Real Estate conference in NYC keeps coming back to me. Batrton explained how for years consumers came to Expedia site to comparison shop, but did not purchase their airline tickets or hotel rooms online.
To me that says how Zillow might be viewing the market and their entry in it. Maybe they’re not looking to be an instant success, but given their funding and experience Zillow should be considered here for the long term. Of course they’ll need to perfect their model and solidify the valuations - but over the long term they could have something that consumers searching for information and remaining anonymous might embrace.
The other observation to be aware of with Zillow is that they recently obtained broker licenses in multiple states. Now with this information, they can proceed with one of two hypothesized business strategies. They may choose to start adding active mls listings to their mapping service so that consumers can evaluate both comparables and local listings as they gauge the market. Alternatively, Zillow may choose to start offering services similar to those of RedFin wherein they act as the buyer’s representative for a discounted commission. We should know which revenue stream Zillow plans to leverage relatively soon. -Randy http://www.4mysales.com
I recently used Zillow to examine the accuracy of this site. I found that Zillow is using county records as the base of pricing properties. County records are frequently incorrect as is the case for my home. I added for upgrades and found that the the price as indicated for my home was completely inacurate. A client of mine recently used Zillow to define what his property is worth and it was so inflated that I am having a difficult time pricing the property with him even though I have given him facts of the proper pricing for his home. The public looks at Zillow as accurate and this makes it difficult for real estate agents to do their job.
I recently had an appraisal done on my condo, which came back at $470,000 compared to Zestimate’s $455,800. This is not to say that the Zestimate is incorrect because I do know for a fact that appraisers will over-appraise (I was doing a cash-out refinance) on the request of realtors they have relationships with.
I do believe Zillow will be the talk of the town as it provides a great service for homeowners and would-be homeowners who would like to perform their own research - com’on, not everyone’s found of realtors =) A couple of co-workers at my wife’s company literally talked for an hour about Zillow (they even pulled up the site in the conference room) and they were all hyped up about the incredible information about their own homes, as well as their neighbors, that once was not readily accessible but to real estate professionals.
http://www.SCCNetwork.com
If you checked out Zillow and weren’t happy with their tax assessed "zestimates" check out <a href="http://www.HomePriceMaps.com">www.HomePriceMaps.com</a>
HomePriceMaps.com integrates Home Sale prices pulled from public records with google maps.
Zillow will have the same impact on RE as WebMD did on the pharmacuetical and medical industires. Your listers will be self diagnosed, and in fact hard to move off of their "belief" that the Zestimate is accurate.
That being said, it can also work to your advantage. Houses on my street looked low. Zestimates weren’t available in my area yet, so they were simply using tax assessments to valuate. Since they are arguably low in my area, and agent could come out looking like a hero.
It’s another case where agents have to learn to adapt and work with technology instead of ignoring it or fearing it. Considering this is the NAR Tech blog, it’s likely that none of the readers of this comment will be in that boat. But your competition might be.
I’d keep an eye on Zillow. They have an interesting Beta (read: Alpha) at the moment, and knowing the CEO, it WILL work, and it WILL be popular.
Also, based on his video interview on Inmann, I would suggest that their model will include nothing but pure advertising revenue. Ask ebay how willing the public is to buy real estate online. The reasons for Zillow to pick up broker’s licenses could be many, but I highly doubt that it’s anything related to being a full service online brokerage.
I think zillow is a great tool. I have worked with it many times and would recommend it. I would always double check the subject property against comparable properties, the computer sometimes misses very crucial things when it comes to determining the exact true current market value. But still one of the best tools online.