After fielding 3 different questions about Zillow, and being approached by a friend who told me she is using their services…I thought it may be a good topic to address.- Zillow.com. What is it? Should it mean anything to me the home seller or Realtor®?
I have been following Zillow since it’s inception just over 2 years ago. In a sentence it is an on-line nation wide real estate service that strives to provide useful tools for the industry. Their tag line says it for them-“Zillow.com is an on-line real estate service dedicated to helping you get an edge in real estate by providing you with valuable tools and information.”
Zillow founders Rich Barton and Lloyd Frank tasted success by bringing a new era of travel booking to the Internet with their Expedia.com, a name that is now a house-hold familiarity. They, along with a few others, were pioneers in changing the landscape of that industry from working exclusively with a travel agent to being the master of your own travel domain. With a cup of coffee and two dozen mouse clicks you can now book yourself into oblivion and save the middle man charges. It has worked well for the travel industry, not without drawbacks, but functional nonetheless. So what’s good for the goose is good for the gander right? This business model can be done at least as successfully in real estate can’t it?
While entirely different in nature, Zillow’s back-end concept is the same. Use programming to gather the maximum amount of data about an areas’ homes, compile it in such a way that the end user can wield the database by choosing options of interest from a web browser, and presto-chango the new system has taken the place of many of the middle-men (aka Realtors®). It offers tools for buyers and sellers alike. For instance, Zillow is most known right now for their patented “Zestimates®”. Much like the play on letters suggests, it proclaims to give estimates of home values based on zip code and comparable homes. They have accumulated Zestimates® of over 67 million homes to date. With Zestimates you are able to quickly put in a few pieces of information and get the “value” of your home.
Before I rip apart the Zillow model I want to say that it may have some merit in specific national markets. I do believe that it gives a certain level of pricing knowledge in metro areas where tract building is the norm, or maybe a heavy concentration of condos with identical floor-plans. It can allow users in those areas to gain a bit of a foothold on property values, but beyond that I chalk Zillow up to electronic real estate browsing. It certainly will not have any real value to a place like Pagosa Springs using the current model.
The sites disclaimer pretty much sums it up for me. It says “The home data we have compiled to generate a Zestimate home valuation varies by location. Some counties provide all the data we could hope for, but others are lacking such key things as the number of bedrooms and bathrooms, or, in some cases, the square footage of the home.” Don’t get me wrong, I am all for putting as much information into the buyers or sellers hand as possible via the Internet. I am always striving to find more RELIABLE information to give to the public. I want everyone I work with to be as knowledgeable as possible. It even helps my job, makes things easier for me. The problem I face is having customers browse a site like Zillow or another 2.0 web application and come to me with their print out which constitutes “educated information”, and thus inform me that they know how they should list or offer based on this. It’s a little insulting to hear that a client might trust a handful of county numbers over a professional that walks in the industry on a daily basis.
How could a computer possibly take into account the views of Pagosa Peak you have from your front deck, the easy access that you have to the national forest, the experiences that can be conveyed in person of the lifestyle your neighborhood enjoys. How is Zillow able to know about the history of development in the adjoining subdivision, the difference between addresses that may mean high pressure sewer line or not? It can’t. Does that mean I am advising staying away from using on-line tools. Of course not. Just understand completely what information your are getting, and use it for what it was designed. Don’t try to put that information in place of a knowledgeable professional for your largest life investments.