Three days ago we wrote, “Perhaps our real concern should be for the MLS itself. Without some innovative thinking about how to effectively open it up on the front end (i.e., reducing the cost/restrictions of adding/sharing listings), its years could be numbered. (Cue the growing number of alternative listing and non-MLS based real estate search tools.)”
And as if right on cue, last night Zillow announced that they’re joining the fray. And it’s not only real estate agents, brokers, and builders who’ll have the opportunity to plant free virtual “For Sale” signs with listing details and contact information.
Zillow maps now include red flags for homes that are “For Sale,” yellow flags for homes that have recently sold, and blue flags for homes that aren’t actively on the market, but whose owners might entertain an offer they can’t refuse. According to Zillow:
“Make Me Move™”…is [Zillow’s] twist on what it means to be “For Sale.” Here’s the concept: Think about a price that would entice you to hand over the keys to your home and move. We think it’s a unique and creative way for homeowners to test the waters and gauge interest in their home, even if it’s not actually on the market. Interested home shoppers can then contact them via an e-mail “anonymizer” to get the conversation started.
While Make Me Move is novel (and sure to drive traffic), we have to wonder how much time and energy serious buyers will invest engaging owners who are perceived to be simply “testing the waters” and haven’t committed themselves to parting with their homes (no matter the price).
We expect to see growing pains with regard to the quality and quantity of listings, and perhaps some seller apprehension with regard to the juxtaposition of list prices and “zestimates.” And in terms of agent/broker adoption, only time will tell if Zillow’s offerings are embraced as complimentary (additional distribution) or shunned as competitive (aiding disintermediation).
Regardless, it’s a shot across the bow of the MLS. And it’s another catalyst for industry innovation.
∙ The Wrong Reasons (The Right Results?) [SocketSite]
∙ We’re Opening It Up! [Zillow Blog]
It’s about time we had access to alternatives to MLS…that site was crap!
The MLS moves to make it more and more difficult for the buying public to purchase homes the way they want to will be studied in business schools as how the Realtors finally lost their battle to remain in control of the market, without a court forcing them to open up access.
It was the same way the music industry lost control of the distribution channel when they fought off Napster, but Apple realized an opportunity and strong market demand and moved in.
If the MLS had bent over backwards to accommodate the buying public, the Realtors could have kept control. Instead, they got greedy and now they are about to lose it all. Maybe not to Zillow, but to any of 100 companies who woke up this morning, saw what Zillow is doing, and realized they could do just as good or better job.
I appreciate what Zillow is trying to do. The novelty factor is quite interesting. But I question if I’d be willing to invest time and emotion in considering one of these Zillow listings if I wasn’t sure the seller/home owner was really serious about selling? Also, I suppose the downside could be that there are no rules regulating what the sellers or agents are saying about the property that they are advertising…so are consumers at risk?
“no rules regulating what the sellers or agents are saying about the property that they are advertising…so are consumers at risk?”
Unlike the Realtors, which are a bastion of ethics and prudence and have been credited with such gems as “You never lose money on real estate” and “If you don’t buy now, you’ll be priced out forever.”
I apologize for generalizing, as I know there are a lot of very good, pragmatic, and honest agents out there. But many are just shills who will say anything to generate a commission.
Per Dan’s comments above I predict Apple will capture this market with:
The 80 Gig Apple Color I-Pod with streaming MLS and linked GPS mapping available for Christmas 2007.
i’m all for ample, free information–the more the better! i also think that there is more to a real estate transaction than just information. there is law, liability, risk, reward, questions and a TON of paperwork/disclosure. am i completely off base when i assume people value an expert that can make recommendations, negotiate, buffer liability, take control of the process, answer questions, coordinate lenders, escrow officers, contractors and ensure all of the parties are being serviced? sure, some folks buy and sell a lot of real estate and they may be very comfortable with the process, but i’d imagine many inexperienced buyers/sellers benefit from the use of an agent. i’m a believer that the more free information that is out there, the more educated the buyer/seller community is and that does nothing but good–but to claim real estate agents are sinking quickly and involved in a dying profession is hard for me to wrap my head around. am i completely wrong?
Ha ha! I remember when travel agents were saying the same thing. What’s a travel agent? wWell, a long time ago, you used to use one to buy a plane ticket.
Garrett, I agree that there will be a role for realtors, but I think for a lot of people, that role will become a paperwork, advice, negotiation thing.
I don’t want a realtor to filter or search for listings for me. I want to collect all the information myself, for as long as I need, and then come forward when I’m ready and interested. I don’t want a realtor to find or suggest houses for me. I don’t want a realtor to call me and ask if I need help or would like to buy or sell. And I sure as heck do NOT want financial advice from someone who gets a commission off of me buying as much house as I can “afford!”
At the time I’m ready to move, I’ll call a realtor and have them make the process happen. I don’t want to miss some paperwork and title blah blah blah. That part, I want a realtor for. Expertise, is what I want to pay for, not MLS information.
I think shady, pushy realtors will sink. And I think some full-service realtors will be around since some people probably do want the information fed to them, or want someone to help them find a house. But there is a huge portion of people who are accustomed to going out and finding their own information in all aspects of life, and those people won’t appreciate being told they need a gatekeeper to get that info for them.
anonymous,
great post. i appreciate that a lot! i completely understand what you are saying and i couldn’t agree more. as you probably deduced, i’m a realtor. i tend to work with young, savvy, intelligent buyers and sellers. they feel much the same way you do–don’t “filter” for me, just provide. frankly, that makes for a MUCH more productive relationship as i look at my job as a facilitator of information–any and all. i love being challenged by my clients and i appreciate the fact that they do their homework. there are a lot of agents that 1. don’t know what they are doing. 2. are unethical and pushy. 3. are incredibly antiquated. 4. are lazy. 5. are inexperienced. those are probably the agent’s we’ll see disappear with time.
as i said in my first post, i’m in favor of abundant and free information. i’d much prefer the buying/selling community have as much access to it as humanly possible. when it comes time for me to set up searches for my clients, i do just that. i send them each and every listing that fits into their search parameters with no comments or advise. i wait for them them to come to me if they like a particular place or have questions. beyond that, i’d say 90% of them search on their own time via craigslist, zillow or any other number of sites (even other brokers sites).
though i completely support the way you are going about your hunt, by just calling an agent right when you are ready to move, how are you going to know you can trust that person? how will you know if you like them? how will you know if they are honest? how will gain access to vacant properties? i think there is something to be said for the relationship that is formed over time.
additionally, please DO NOT ever choose an agent that is telling YOU what YOU can afford or what YOU should be spending. that is nobody’s job but your own. you can get help with that from financial planners, tax professionals and/or mortgage brokers, but agents should not be pushing their client in that manner. that said, i know it happens all the time.
again, thanks for your feedback, it is interesting and helpful.
tipster,
though i don’t totally disagree, i think there is a huge difference in purchasing a plane ticket vs. purchasing a home. most importantly, there is SIGNIFICANTLY more at stake when purchasing a home. additionally, there is a MUCH greater chance for lawsuits and issues, a TON more parties to deal with (lenders, title companies, contractors, buyers, sellers, etc) and there is also a great deal of coordination for folks that need to change their house for whatever reason–remodel, fix, yadda, yadda.
i can see why the travel agency has changed so drastically and why travel agents have virtually (but not compltely) dissapeared. i can also see how the real estate world is (and will) change drastically, but no matter how much it changes, there are many (i’d venture to say most) people out there that don’t want to spend large amounts of money (sometimes several millions) without some guidance, no matter how much information they have.
I am so pumped. This is a great service. Zillow also has my house up $540,000 since I purchased it back in January 2006. 2006 saw about a $150,000 increase. Life is great. Thanks Zillow! Let the bull market continue 🙂
OK, garrett, you are right abut the larger number of parties. There’s the airlines, the hotel, the car rental company, the airport transportation company, the…oh wait, were you saying there is a large number of parties I have to deal with when I travel or when I buy a home?
And which title company are you planning on dealing with? The one that will do the job most efficiently and look out for my interests, or the same one who has been looking out for yours and has no incentive to operate efficiently (which is why prices for their services never drop due to efficiencies) or look out for my interests. Out of the billions of dollars in title costs that change hands each year, what percent is actually paid out. About 4 percent? Why have prices never fallen? Is it because
And tell me about the mortgage broker you steer buyers to. Any surprises on the closing costs there or did you protect your client’s interest and nail all that down before hand? What DID you do for the client with all of that experience you have.
The whole system is corrupt, inefficient or both and there isn’t a single buyer or seller who will be sorry to see it go. Its complexity is partly a result of the fact that no one has had to make it simpler. Those days are drawing to a close.
Maybe you are one of the honest ones, and I know there are plenty out there who try to do the best for their client, but the fact is, with you in the middle, all those other parties have no real incentive to serve the buyers OR the sellers. When the buyer or seller chooses the title company, when the buyers choose the mortgage broker, those parties will represent the buers and sellers interests a heck of a lot better than they do now.
tipster,
i’d definitely like to consider myself one of the honest ones. i predicate my business on honesty. i won’t get into that though in this forum.
you got me and you’re right, there are a lot of aspects involved with travel–that is my mistake for not thinking that one all the way through.
again, not the right forum to go into my business practices, but to speak in general terms, an agent should always give multiple options as far as mortgage brokers, title companies, etc. there is no way that the client could benefit from just one–that’s silly. on the same token, it’s silly for a buyer to interview only 1 agent. we are not created equal.
sorry you feel the entire system is corrupt, but the one point in which i completely disagree with you is “there isn’t a single buyer or seller who will be sorry to see it go.” i know countless folks that have been COMPLETELY happy with the way their transaction was handled and they wouldn’t and won’t do it a different way.
Pretty interesting discussion — let’s do away with all the middle men — are you hungry — go directly to the farm — cut the supermarket out — they mark up the price and make a profit — looking for a suit — go buy some fabric and bring it to the tailor —clothing stores mark things up 100% — Thirsty – head for the river and stream.
Comparing travel and real estate — doesn’t really work in my opinion — are you purchasing a 1.2 million dollar cruise? If so – would you take me! The industry needs to change and the San Francisco Association of Realtors is at the forefront of that change — go look for a house in Raleigh, NC — you can’t search the MLS without establishing a relationship with an agent. They don’t provide any info at all in other places in the country. Zillow is certainly a beacon towards a change — many of us have already embraced that change.
I’m all for providing as much information as possible for free — but to suggest that as a Realtor i don’t provide a legitimate service and value – that’s just wrong. I’m 100% confident that I’ve provided value equal to what i’ve been paid — in fact, at times — much more so. Does your travel agent listen when you call @ midnight with questions and concerns about your cruise —
Don’t knock the industry as whole — knock the people that are unethical and lack integrity — Are their people in our industry that would say anything to you to close a deal — you bet there are -that said, a good deal of us are providing information and services and helping guide buyers and sellers with tough decisions.
Zillow is great — i hope someone comes and buys my house for $865,000 — apparently that’s what it’s worth!
“The industry needs to change and the San Francisco Association of Realtors is at the forefront of that change — go look for a house in Raleigh, NC — you can’t search the MLS without establishing a relationship with an agent. They don’t provide any info at all in other places in the country.”
When someone claims to be on the “forefront” by taking information away from the public, heading backwards in time, that’s just shady, and it proves my point: realtors are a dishonest group, constantly telling me how something that takes value away from me is superior, and Realtors are a group that solely looks out for their own interests and ignores the interests of the buying public. Pointing out that “another dishonest group (Realtors in another area) already keeps information from the public” is not a big help to your cause.
It is precisely this kind of BS that makes me about as interested in dealing with a Realtor as I am in dealing with a car salesman: “Sonny, don’t look at the invoice price on the Internet. *I’ll* tell you what you should pay”. Um thanks. Maybe I’ll just keep my car a couple of years longer. Thanks.
tipster – I agree with a number of your points, but I really can’t take you seriously when you make blanket statements like “realtors are a dishonest group.” It just serves to undermine your credibility.
Greg nails it on the head with “Don’t knock the industry as whole — knock the people that are unethical and lack integrity.” And as the industry changes, those agents who fail to add value will quickly go the way of the dinosaur.
“Ha ha! I remember when travel agents were saying the same thing. What’s a travel agent? wWell, a long time ago, you used to use one to buy a plane ticket.”
I actually disagree with your comment. Whenever I travel on vacation, I use a travel agent. They just make the process so much easier from booking the tickets to getting the hotels (and usually I get a good price).
Regardless, you can’t compare the travel industry (high volume, low per transaction cost) to the real estate industry (lower volume, VERY HIGH per transaction cost). There is a lot more “risk” involved with purchasing the largest investment of your life.
I work with some of the largest developers in the Bay Area and when these people buy their land or property, they use an agent. If buying property was so easy, you would think that these sophisticated, savvy people would be able to do this on their own. They don’t because it’s more complicated, and risky then you think.
Another note, if I were to ever purchase a property, I would NEVER buy from someone who is not represented by an agent.
That being said, I’m all for more information on the internet on home listings for sale. MLS seems to be a monolopoly so mad props to Zillow….
A lot of good points here made on both sides.
From a macro perspective, I’d like to add that Realtors, through the NAR, are one of the largest lobbies in the country and are continually pushing legislatures to pass protectionist laws solidifying their monopoly on the residential real estate transaction. There are parts of the country where Realtor lobbies have made discount brokerages (i.e. flat fee places) illegal. Effectively locked out all types of competition.
What value does this add for the buyer/seller? None. It protects the commission stream and keeps a traditional middleman well paid. The long-winded point is that if the system were really efficient, the NAR would have nothing to fear and would not need to spend millions covering itself through lobbying.
WHY do people keep insisting that the public has a RIGHT to MLS information? The MLS is paid for by real estate agent dues. The MLS information is drawn from contracts between property owners and real estate brokers. The only reason this information was made relatively public over the years was for marketing purposes, not out of some inherent right to know on the public’s part.
I’m an agent and yesterday gave Zillow a test drive to see if it could replace the MLS.
Not even close.
Why? There’s no control of accuracy whatsoever. I could go on there and place a for sale listing for the Transamerica Building, if I wanted, and the only verification Zillow offers that I’m the agent for the Transamerica Building is to verify my credit card number and to ask me to click a button that says I’m the listing agent. Big boinkin deal.
There’s some disclaimer on the site that says Zillow will only work if people act ethically when posting listing information. So please be ethical! Hahaa! THAT’S gonna work.
Gee, HOW could they regulate ethics and accuracy??
If only there were a national association…. and then maybe a local chapter… some organization that could monitor ethics and kick people out if they don’t follow the rules. Hmm.
Maybe we could call it the National Association of Realtors! On the state level we could call it the California Association of Realtors! And on the local level we could call it the San Francisco Association of Realtors!
And to prevent people from posting inaccurate, deceiving, unethical information, we could issue membership numbers and threaten legal penalties and fees if they misbehave. If only we could invent such a thing. Maybe Zillow will figure out how to do it.
Or maybe someone else already did.
Ha ha! You’re right. The information *is* innacurate. 3 bedrooms on MLS often turn out to be two. EZ street parking on MLS is frequently false. “Great upside potential” on MLS means the place is a dump and the buyer figures he’ll just sell it with all that potential priced in. You are absolutely right: the information *is* frequently inaccurate. DOM? Ha! A joke: the listing gets pulled on and off to manipulate that. Lotta good those memberships and legal penalties (honestly: has anyone EVER paid one) do.
One thing we do agree on is that I don’t think Zillow has the answer. But someone will step into the void created by SFARMLS (and the total lack of information elsewhere) with something that works. And when that happens, that will be the beginning of the end. And you’ll all smack yourself in the forehead, just like I do when I’m too greedy and try to wring that last 5% out of something and end up losing it all.
tipster – it sounds like you’re confusing subjective statements and objective facts.
Regardless of who runs the database, a room that’s technically a bedroom will be listed as such (even if it’s being used as a living room), and qualifiers like “EZ” and “Great upside potential” will always be added to the MARKETING notes. But get a grip, neither are “inaccuracies”.
DOM on the other hand…
Hi, it’s David G from Zillow.com. Sorry for not stopping by earlier.
Elizabeth –
Good point. If you don’t trust owner’s listings, you can easily filter those by looking to the right of the listing details and noting whether the owner or the listing agent posted the home. If a home is posted for sale, we require that the agent or owner confirm its status once per week – or we take it down. These great agents are also not typically intimidated by Zillow and have welcomed the opportunity to post their listings on our site for free.
Garret –
I agree. There are a stack of great Realtors who add tangible value to the transactions they facilitate — and I’m sure that most of their clients value their efforts.
Greg –
Ditto!
Anon (9:17)
You raise valid concerns about malicious behavior. All web sites that invite user participation have to design for misbehavior. We have both reactive (flagging) and proactive (forensic) moderation processes in place to identify and discipline malicious users on Zillow. That said, we’ve allowed owners to claim and update their homes for a few months now and everyone has been behaving surprisingly well. The psychology of building systems like Zillow is … “most people are good … and they will usually report and/or correct the behavior of the few that are not”. When it comes to systemic attacks on the quality of our data (spam, bots etc.), our IT team’s experience in controlling access to the worlds largest websites over the past decade stands us in very good stead.
tipster –
Funny comment. Actually, when a home is posted for sale, there is liability for the seller or agent attached to misrepresenting the listing — it’s also bad business. So, whether on Zillow, or in the MLS, the home’s facts associated with a listing should in most cases be accurate. Where they disagree with the public (county) records on Zillow, you are most often looking at un-permitted upgrades. When it comes to subjective attributes like “EZ street parking”, only a physical inspection of the property will tell you how much of a stretch the marketing is.
Although I agree with many of the comments complaining about realtors, one way realtors and travel agents are fundamentally different is that for individuals, travel services are a commodity. Shipping me to NYC is a service; it could be provided equivalently by many companies. When I fly from SFO to JFK, I pick the cheapest ticket that fits my tolerance for hassle, regardless of airline.
Car dealers (within a brand) are in the same position. I don’t care who sells me a Honda; all of the 2006 Accord EX models are the same. Thus, Expedia and Carmax. I can get perfect information about those commodities in a few lines of text.
zillow now has competition as well:
http://www.cyberhomes.com
make me move got us an unsolicited bid via our buyers aggressive realtor
it works!
david,
great to hear from you. please add individual discussion about houses for sale, fsbo or agent, so we can debate things like price/sq foot and neighborhoods and get the owner involved.
my problem with realtors isn’t that they exist, it’s that they are way overpaid. the brits laugh at us for still paying 6%. they only pay 1-3% for the same service.
we are quite naive to say the least to pay these uneducated folks the fees we do.
sad!
James,
Commissions are negotiable in real estate, just ask. Also, not all Realtors are ‘uneducated’, as you believe. A good Realtor is worth their weight in gold.
One other point, you might want to take into consideration, before making such a broad generalization, James. There are plenty of ‘discount’ brokerages out there, who are more than willing to charge close to nothing for their services. It is a very competitive marketplace, and consumers have plenty of choices. Those that wish to ‘go it alone’ can do so as well. A lot of agents work very hard for their clients, as our have, and I would never consider navigating the market without the expertise of one.