Sunday, October 6, 2013

Why Consumers Like Zillow

Real estate websites Zillow and Trulia were just beginning to hit stride when I received my Oregon broker's license in 2006. I liked them instantly, even though the sites were far less robust than they are today, because I'd always felt empowered consumers were easier to serve than uninformed people. Most of my colleagues hated the sites--especially Zillow--for its "zestimate" of home values.

The biggest reason brokers for their contempt usually cited was Zillow's inaccuracy. Pricing was the worst offender, but listing data was also an issue. And older brokers especially didn't like yielding access to home listings and sales, long the guarded property of local MLS's, to the general public.

Today, though, nearly all home buyers and sellers begin their research online, and Zillow and Trulia lead all other sites in unique visits. Enter a property search into Google, and those two sites are where you'll likely go first, and even end up.

Are they accurate? Kind of, but they're not perfect, as they openly disclose to site visitors upfront. And not a week goes by that I don't hear a Zillow-client anecdote from a real estate broker about how inaccurate the site is, and why do people use it? Snarl!

When we moved to Colorado and began shopping for homes, my wife often began her sentences with "Zillow says..." I'd stop her mid-sentence, carefully explain Zillow's price valuation deficiencies and ask her not to rely on it. She listened very earnestly and went right on ahead and did it anyway.

She liked it because the information she wanted most was there--location, room count, square footage, amenities, lots of photos, and so on. Flaws in the accuracy of "zestimates" was acceptable at this point in the search, because (a) no one was ready to make an offer, and (b) few people pay the asking price anyway. For sellers, the same dynamic is at work. People see price inquiries as lead generators for real estate brokers, and most don't want to enter into a broker relationship early on.

Trulia and Zillow have both become public companies and are working to make their sites more useful and robust with enhanced user-generated content and agent reviews. And did you know that 14 million people submitted mortgage loan requests to the Zillow Mortgage Marketplace, according to Zillow Digs--a foray into home improvement--just launched a few months ago. I'm betting Trulia will follow.

The Captain's one gripe with Zillow is its "neighborhood expert" labeling. Find a listing, and you'll see thumbnails or larger photos of real estate brokers who are supposed to be "neighborhood experts." In fact, those are paid slots, sold to brokers by zip code. While these persons may indeed be local experts, there's no objective correlating data for consumers. These folks are neighborhood experts, and if you don't believe them, just ask them.

Zillow and Trulia are here to stay, and from a consumer's point of view, the older they get the more they become better. How they will change the way business is done is fodder for another post.