Dec. 7, 2006 - Zillow Listings - The First Taste is Free |
With getting some listing paperwork signed late yesterday afternoon, spending some time with the family and then attending an Executive Committee meeting for my local synagogue, I was out of the electronic loop from about 4 p.m. yesterday until mid-day today. Little did I know the new real estate world that would be waiting for me today.
That, of course, is an exaggeration. But from the proliferation of articles today on one topic - an upgrade to Zillow that allows property owners to "list" their own properties and set a "make me sell" price (a dream price at which they'd start packing, even if they had no intention of moving) - it would seem the real estate industry as we know it has come to a halt.
Well, yes and no. And it seems opinions on the ultimate impact of Zillow's changes depend greatly on the author's already-established opinion of the direction of the real estate industry.
Merv at the Northern Virginia Real Estate Guide opined ...
The significance of this might well be to make every MLS obsolete, realtor.com irrelevant, Google Base old fashioned, Craig's list history and significantly transform the role of a real estate agent as a central figure in the transaction to one of a real estate transaction advisor as buyers search for homes and sellers are empowered to market their own homes on a massive scale.
I believe we're several steps short of every MLS being obsolete or even making Realtor.Com irrelevant. For all of the discussion of local Multiple Listing Systems pulling their listings from Realtor.Com, the fact remains that the vast majority of brokerage-listed properties not only can be seen on the site but are automatically populated. Zillow, at this juncture, is relying solely on property owners and enterprising agents to enter homes for sale. Kris Berg at the San Diego Home Guide discusses this further.
As for the impending obsolescence of the MLS, I believe this is a notion fed by a misconception of the MLS' purpose. As I have stated many times, the Multiple Listing Service is nothing more or less than a database that allows real estate brokerages to communicate their listings to each other while also offering cooperation to those brokerages who bring buyers to the listings. Since Zillow does not have all the homes for sale, and there is no offer of cooperation, it in no way replaces what exists in the MLS.
Now call my a cynic (I'll wait while you do so) ... but if Zillow attracts a great number of people to the website to list their homes, and in time it is proven that this service provides value, isn't it logical to expect the big Z to charge for the service? And once they cross that threshold, are the Zillow listings anything more than a better marketed FSBO site?
Also, Zillow has decided to allow agents to add their property listings to the site. I've tried it here and others, including Ardell in Seattle and the aforementioned Kris Berg, were doing the same. And again, if it is proven that there is value to a Zillow online listing, wouldn't it be natural to assume that Zillow ultimately will charge for this service? And when they do charge for listings to be added, does the site then become more or less relevant than a Realtor.Com that also charges for upgraded listings?
I'm going to wrap this as much of today's discussion across real estate blogs has been duplicative. But before I call it an afternoon, I'll add one final twist.
So far I've added one property to Zillow. Why? Because in the other cases, the Zestimate provided is lower than the list price of the home. While it seems like a simple difference in calculations, consider the possible ramifications over time:
1) Does a lower Zestimate, accurate or not, provide a prospective buyer with a starting offer or, worse yet, a perceived notion of value that will not or cannot be overcome with additional information?
2) Since Zillow allows property owners to adjust the estimated value of their home, are we going to see homeowners adjusting their prices to the values they'd rather see to justify higher possible list prices? (In theory this can happen now, but I believe the side-by-side sales price and estimated value will create an inexorable link in the mind of a buyer.)
3) Can a property owner opt out of the system when the estimate can impact their ability to sell for fair value? Sellsius wrote about this one.
And the final question ... while the technological side of things seems wonderful, is there anyone else wondering how strong a structure being built upon a house of cards possibly can be? Keep in mind I have no issue with Zillow adding listings - while the bubble heads are off praying for the destruction of the real estate agency, those of us in the industry with any kind of a clue already are adapting in under a day.
But given that Zillow's estimates only are as good as the last few sales, that in areas where there are no sales the data can be shaky, that there are any number of unzillowables out there ... with an increasing amount of information presented as fact versus conjecture, will this great real estate Tower of Babel come tumbling down if the underlying stones mentioned in the previous sentence aren't anchored more securely?
That's it for me ... I'll be going through the rest of the posts in a bit. If you're interested in the varied reactions, here's a list compiled by Drew at the Zillow blog:
Greg at the Bloodhound Blog on the 900-pound AVM
Ardell's first blush at Rain City Guide
Future of Real Estate Marketing, Zillow Offers Free Listings
Transparent RE's Zillow Primer
Kevin Boer at Three Oceans on the world changing
Galen's always unique perspective at Rain City Guide
Jim Duncan at Real Central Virginia
Maureen Francis' first-ever Zillow post. (Really?)
Jonathan Miller at the Matrix on the make me move price
(c) Jonathan Dalton, 2006 / Jonathan Daltons Arizona Homes
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