Matrix Blog

…and I think I am glad they did… (I’ve got to grab an updated non-beta logo soon).

The real estate valuation site [Zillow.com](http://www.zillow.com) announced a major upgrade today. President and co-founder Lloyd Frink stopped by my office to explain what the upgrade entailed. The upgrade to Zillow allows

…homeowners and real estate agents to post homes for sale for free. Additionally, in redefining what it means for a house to be “For Sale,” Zillow is enabling any homeowner to post a Make Me Move price.

New Zillow features include:

Make Me Move – “Make Me Move is our twist on the traditional ‘For Sale’ sign.”  A homeowner can easily post a Make Me Move price without exposing any personal information.  Zillow then enables interested buyers to contact the owner through an email “anonymizer.”  There is no charge for the service.

For Sale – …Opening up every home’s Web page on Zillow.com for owners and their real estate agents to plant virtual ‘For Sale’ signs in their Zillow front yards for free.”

Real Estate Wiki The wiki is seeded with more than 100 articles by Zillow editors on topics of interest to home buyers, sellers, and owners.  As a wiki any visitor can edit an article, comment on an article, or create a new article and publish it for all to see.

Improved searching and mapping functionality This incorporates the new “for sale” feature (note avoidance of the word “listing”).

Zillow has grown their property valuation database to 70 million homes, essentially providing a home page to each one of them. Its a daunting task and Zillow has been hampered by low accuracy rates and the [rath of the real estate brokerage community [Matrix]](http://matrix.millersamuel.com/?p=924).

Their position is to place a value with each residential property in the United States, first and foremost. Lloyd told me that their challenge is to get a number associated with each property as a first priority.

Accuracy will likely come later but much of that effort is at the mercy of public records. The ability for the consumer to edit property facts will help, but will be very hard to police. However, the new edits will not be incorporated into the logarithms that calculate values so the tweaked data will not pollute the public record data feed.

Their model is advertising based and in markets where accuracy is highest, should draw the most traffic and advertisers that want to be associated with their product. In markets where accuracy is very low (48% of the US is more than 10% more or less than the actual value), it should be a much harder sell so Zillow really is incentived to keep making improvements to their service.

I would imagine that real estate brokers will use the listing service because its free and sellers will probably expect it to be used. However, since the site is known as a valuation tool first and foremost, I am not sure how effective it will be at selling properties.

I think the new features may damage their identity as a real estate valuation tool, or at the minimum, confuse consumers and make real estate brokers more upset. Still, its an innovative and creative way of presenting and researching real estate information. Since local consumers and brokers are their users and largely determine who the advertisers are, I hope they have thought this through.

Tags: Zillow, Lloyd Frink

3 Comments

On occasion, there is a surge of commentary on a particular topic presented as a post on Matrix that seems to warrant some additional followup. I often learned a lot from these comments as they seem to push the discussion a little deeper.

The word [Vortex](http://dictionary.reference.com/browse/vortex) or something regarded as drawing into its powerful current everything that surrounds it came to mind as a way to describe this sort of feedback about a particular topic. Hence, Matrix Vortex.

Topic: Zillow.com and Realtor.com
Post: [Zillow Gets Pillowed In Old School Smackdown [Matrix]](http://matrix.millersamuel.com/?p=924)

One of the most incendiary topics of late has been anything that has included the word “Zillow” in it when the topic concerns brokers.

Last week the post [Zillow Gets Pillowed In Old School Smackdown](http://matrix.millersamuel.com/?p=924) stirred up a Vortex of discussion, ranging from pro-Realtor.com to pro-Zillow.com. A lot of passion was provided in the commentary.

A few days after his appearance on the CAR panel, Allan Dalton, the president and CEO of Realtor.com, [was promoted to president of the Move, Inc. Real Estate Division [RISMedia]](http://www.rismedia.com/index.php/article/articleview/16389/1/1/). Honestly, I was surprised by his photo in the RISMedia story. I had pictured him as being a lot older than his old school commentary suggested and perhaps he represents the current mindset within NAR. He seems to be one of the rising stars of NAR and wouldn’t be surprised if he eventually becomes its president. His aggressive, take no prisoners style may be what NAR is favoring these days as they are being attacked on all sides, including the Department of Justice lawsuit.

At the same time, the Lloyd Frink, president of Zillow, posted a politically correct [recap of his experience at the California Association of Realtors](http://www.zillowblog.com/zillow_blog/2006/10/zillow_at_car.html) conference (which was personally disappointing to me for its blandness, specifically, the heated panel discussion with Allan Dalton). What I found particularly interesting was the fact that he didn’t mention the attack by Dalton at all. Frink also backpeddled from his past experience with Expedia suggesting that the Realtor is essential to the process, unlike travel agents, which is what Expedia rendered nearly obsolete. It seems like only now Zillow is realizing how important Realtors are to their long term strategy or they underestimated the backlash.

The irony here is that [Realtor.com](http://www.realtor.com) is a cluttered, crowded web experience and [Zillow.com](http://www.zillow.com) doesn’t include listings. Why so much friction? Can’t they ever get along or is it too late?

Tags: Zillow, Lloyd Frink, Realtor.com, NAR, National Association of Realtors

5 Comments

Zillow.com acted very bravely by [participating in a panel discussion about the future of real estate information [OCR]](http://www.ocregister.com/ocregister/money/homepage/article_1322090.php) at a Realtor convention. The president of Zillow, Lloyd Frink, took the high road, yet was pretty candid about the future of the relationship between Realtors and their clients and customers.

“We believe the relationship between Realtors and their clients is going to change in the future,” Frink said in response to critics in the room. “As opposed to Realtors being gatekeepers of this information, they become much more of experts on what this information means.”

His is right and its already happening. 75% of buyers and sellers start with the Internet first before contacting an agent. Think about it, why would the Zillow concept, warts and all, be so popular? Is it because Realtors are accurate? Thats really not the point at all. Consumers want to gather information and digest it before they enter the sales process. The problem with Zillow, is its not consistent in its results so it promises more than it can deliver. Since the results come from a secret black box of algorithms, its a tough sell to real estate professionals.

But [Realtor.com was pretty annoyed with Zillow [Telegraph]](http://presstelegram.com/news/ci_4509079) and went on the attack (aka the low road) which may have gotten some laughs and attention, but doesn’t help their cause at all. It paints a picture of the old guard, trying to keep things the same, which is not what the trade group needs to do.

Allan Dalton, president of the competing Realtor.com site, bitterly criticized Zillow.com, likening the site’s trademark Zestimates of home values to a carnival weight and age guesser.

Realtor.com, which is sponsored by the National Association of Realtors, provides listings of homes for sale by ZIP code from Realtor databases.

“The whole notion of suggesting to people that they can find out what their home is worth without a Realtor offends me,” Dalton said.

You’ve got to admire Zillow’s attempt to bridge the gap between them and the Realtor community. They are simply providing a new tool, valuable or not, to a trade group that is seeing the world change around them. However, its going to be a tough road for Zillow despite the fact that they are one of the most popular real estate sites on the web. Because a large portion of their target advertising market is real estate agents and the parent trade organization sees Zillow threatening their relevancy and causing more market confusion, its not a lovefest and probably never will be.

Whats interesting about the whole polarization of Zillow’s popularity, is that Zillow does not provide listings, yet are viewed suspiciously by agents. The initial rollout with promises of complete market coverage by Zillow, resulting in significant inconsistencies in results, is what has got many agents upset.

Zillow has promised more than it can deliver, which I have commented on before. Some market results are amazingly accurate, while some are not even close. The problem for the reader is having some way to measure its pricing reliability before it can be taken as a serious tool. Thats why the Realtors should not feel threatened at all.

Those that I have spoken to at Zillow are a very nice, earnest bunch of people trying to do what no one else has been able to. However, at the end of the day, (Of course I am not without bias here since I provide property valuations for a living.) the black box approach to valuation will always be viewed with suspicion. I guess thats besides the point.

Tags: Zillow, Lloyd Frink, Realtor.com, Zestimate, NAR, National Association of Realtors

18 Comments