Zillow thinks that if they encourage sellers to hire an agent, it will be enough to appease their big-money-spending Premier Agents, because sellers will also have the option to engage with an agent regarding their home’s value.
But there is recent evidence to know how effective that program will be.
Zillow rolled out their big Seller Leads program at the last Premier Agent conference that we attended in Las Vegas last year. We signed up for the 6-month program, figuring if it does catch fire, we’d want to be involved!
During our paid six months, we got one listing in Spring Valley.
Our advertising with them has been so ineffective that we quit all Zillow advertising this month. Our listings will still be prominently displayed, but you won’t see me being part of the three-headed monster on the right-side of the listings in Encinitas and Carlsbad.
They have a good shtick, but in reality, the Zillow advertising being sold to agents works most effectively in the lower-end areas, where buyers and sellers aren’t connected to several agents already.
The Instant Offers program is likely to find a similar fate.
Zillow is attempting to capitalize the Open Door model, which has 200 employees operating in the Phoenix and Dallas markets, and has raised $320 million in venture capital. Zillow probably feels the pressure, and figured they have to do something to compete with Open Door.
As we saw with Tom, not every homeowner is greedy. There are those who would rather cash out quick than navigate the path to a retail sale – heirs to the estate, long-time landlords, etc., who just want to get their money!
Things that are likely to happen with Zillow’s Instant Offers:
The investors will hire great salespeople.
Agents will attempt to game the system.
Higher-end sellers will hesitate.
If the investors have great salespeople who convince sellers that their discount is worth the fast money, the program might work – whether the buyer is Open Door, Zillow, or Tom T!
It was bound to happen: A homeowner has filed suit against online realty giant Zillow, claiming the company’s controversial “Zestimate” tool repeatedly undervalued her home, creating a “tremendous road block” to its sale.
The suit, which may be the first of its kind, was filed in Cook County Circuit Court by a Glenview, Illinois, real estate lawyer, Barbara Andersen. The suit alleges that despite Zillow’s denial that Zestimates constitute “appraisals,” the fact that they offer market value estimates and “are promoted as a tool for potential buyers to use in assessing [the] market value of a given property,” meets the definition of an appraisal under state law. Not only should Zillow be licensed to perform appraisals before offering such estimates, the suit argues, but it should obtain “the consent of the homeowner” before posting them online for everyone to see.
In an interview, Andersen told me she is considering bringing the issue to the Illinois state attorney general because it affects all owners in the state. She has also been approached about turning the matter into a class action, which could touch millions of owners across the country.
In the suit, Andersen said that she has been trying to sell her townhouse, which overlooks a golf course and is in a prime location, for $626,000 — roughly what she paid for it in 2009. Homes directly across the street, but with greater square footage, sell for $100,000 more, according to her court filing. But Zillow’s automated valuation system has apparently used sales of newly constructed houses from a different and less costly part of town as comparables in valuing her townhouse, she says. The most recent Zestimate is for $562,000.
Andersen is seeking an injunction against Zillow and wants the company to either remove her Zestimate or amend it. For the time being she is not seeking monetary damages.
Emily Heffter, a spokeswoman for Zillow, dismissed Andersen’s litigation as “without merit.”
Sandicor had said that the Zillow demands were unacceptable. Who caved? Zillow is still working out the bugs, but this should guarantee that they are as accurate as the MLS:
SEATTLE, April 27, 2017 /PRNewswire/ — Zillow Group, which houses a portfolio of the largest and most vibrant real estate and home-related brands on mobile and Web, today announced partnerships with the following four new multiple listing services (MLSs):
SANDICOR, Inc., in San Diego. SANDICOR represents all of San Diego County, including East San Diego County and Pacific Southwest Association of REALTORS®, the Greater San Diego Association of REALTORS®, and the North San Diego County Association of REALTORS®, with nearly 20,000 members representing more than 8,000 listings.
The Austin Board of REALTORS® in Austin, Texas. ABoR represents nearly 11,500 members and more than 5,000 listings in Central Texas.
The New Orleans Metropolitan Association of REALTORS. NOMAR is comprised of three organizations, the REALTORS® Association, which serves over 4,000 REALTORS®, the Commercial Investment Division (CID), which provides commercial brokers and agents benefits targeted to their specialized needs and Gulf South Real Estate Information Network, Inc., which provides MLS services to over 5,000 members.
Greater Baton Rouge Association of Realtors represents 2,700 members and nearly 3,000 listings.
“We are pleased to be working with these leading MLSs to ensure that the millions of home buyers and sellers using Zillow Group sites and mobile apps see the highest quality listings information,” said Errol Samuelson, Zillow Group chief industry development officer. “Now, the members of these MLSs and associations can rest assured their listings are coming to Zillow and Trulia in less than 10 minutes with the same high quality standards that MLS data ensures.”
Zillow Group now partners with more than 570 MLSs around the country, covering 95 percent of active listings in the U.S. marketplace.
Through the Zillow Partnership Platform, real estate agents are prominently displayed as the listing agent on all of their listings and can receive leads directly from Zillow and Trulia, all at no cost. Brokerages receive attribution, branding, a link back directly to their websites and daily reporting access.
Zillow has another round of high-quality commercials out. It’s amazing that nobody in an industry-leadership position doesn’t try to copy this format – it would seem to be very effective in building long-term loyalty:
Our Zillow rep mentioned that they are investing heavily into virtual reality. (He’s reading the blog now – hey Jason!)
I’m a big proponent of video tours – there is no better way to help remind buyers of what they are thinking of purchasing. We have seen the 3D tours hit the mainstream, and the virtual reality experience can’t be far behind.
Will we see an evolution of how homes are sold?
For that to happen, we would need a sea change in the realtor community.
Currently, the whole real estate industry is focused on representing sellers, and making buyers comply with their every wish. There would need to be a buyer revolution for it to change.
I’ve already had sellers object to their home being so transparent. They don’t want buyers to see every nook and cranny, especially if their house is less than perfect.
While the virtual reality devices may provide some whiz-bang effect, don’t be surprised if they are slow to take hold. Sellers and listing agents would rather tempt you with a select group of photos, and disappoint you with the truth once you arrive.
Zillow and others will push the virtual reality toys, and try to convince buyers that those who possess them are superior agents. But there won’t be widespread use, and it will end up just being another gimmick.
Did you notice that the zestimate wasn’t listed in the Real Estate Online Tools?
It is wackier than ever!
Last year, we saw the zestimate be hundreds of thousands of dollars too high on a custom home west of the I-5 in Leucadia – and once I inputted the listing on Zillow, their zestimate went higher:
They claim to always be improving their algorithms, but this new example is hard to explain. On my latest listing in a very normal tract neighborhood in NE Carlsbad, I gave them the benefit of the doubt. I just sold the exact same model for $810,000 in December, but maybe they are slow to update? The zestimate of my new listing was $744,222:
But once I inputted the listing on Zillow last Friday, the zestimate zoomed to $851,243!
Does it mean that Zillow has finally jumped on the bandwagon and are supporting their Premier Agents with zestimates that come in around the list prices!!! If their primary concern was placating their paying customers, the Premier Agents, this would be a good way to do it!
Here is today’s zestimate – back where we started, with 5s instead of 2s – how can it fluctuate up and down 14% over five days??
I guess when you look at a zestimate, you can only hope you are looking on the right day! 14% swings over 5 days? Could it be any more unpredictable?
Jay Thompson is an ex-realtor, and currently on Zillow’s staff. He responded earlier today to our previous questions about Zillow stopping manual uploads:
Jay from Zillow Group here. To answer your questions:
1) What about the Coming Soons? If only MLS-fed listings are allowed, then that should be the end of the Coming Soon feature. Or will Zillow allow their Premier Agents to use it?
Coming Soon listings will still be able to be manually entered. Some MLSs have a “Coming Soon” status and feed that to us, most do not. Coming Soon is limited to Premier Agents and those in the Zillow Pro for Brokers program.
2) Will they still allow for-sale-by-owners to manually feed?
Yes. Since there isn’t a feed source for FSBOs, they can still be manually entered.
3) Zillow gives preference to their high-paying Premier Agents. Will this eventually lead to more limits on the properties seen on Zillow – perhaps to those listed by Premier Agents only? Or is Zillow just rattling their sabres?
There is no saber-rattling. Manually entered listings are a huge source of data errors and stale data. Eliminating manual entry helps provide more accurate data for everyone — consumers, and paying and non-paying agents a like. Listings aren’t and won’t be limited to Premier Agents only.
He was met with the usual drivel from agents, some of whom mentioned the big difference between a real estate licensee and a Realtor is that we subscribe to a strict Code of Ethics.
But if we’re going to re-brand the name Realtor, then let’s stop the charade about ethics. Realtors have stood by idly while their fellow agents have fleeced the banking industry with fraudulent short sales. We intentionally deceive consumers by re-inputting our listings to make them appear like hot new offerings. We make off-market deals and boast about them in the MLS that they were ‘sold before processing’, when every realtor has signed an agreement to share their listings with each other.
None of that is ethical, and if you participate – or stand by and watch others participate and do nothing about it – then you’re not an ethical agent.
Let’s put an end to it.
Either be ethical, or let’s stop saying we’re ethical, when we’re not.
Because the industry is so fragmented and independent, we’re not going to get a million agents to be ethical when you can double your commission by telling sweet little lies.
But we could educate sellers on the truth, and save our jobs.
The auction format would help to drain the murky cesspool of home selling. Buyers and sellers would enjoy full transparency, and everyone would have a shot at paying what they think a property is worth.
Auctions would invigorate the marketplace!
But sellers are leery of the idea, and they don’t want to give it away.
Here’s my idea:
The MLS is a dinosaur, and has been complicit in the fraud. Instead, let’s take this idea straight to Zillow – they already have different categories of listings on their website: Pre-foreclosures, Coming Soons, Make Me Move, etc.
Let’s add a new category: Market-Rate Sellers.
First, we properly educate a seller by having them read and understand the definition of a property’s value. We give them this disclosure:
A property’s value is defined by how much a ready, willing, and able buyer will pay for it. After proper marketing, I am willing to sell my property for what the market will bear. Signed, Seller.
Why don’t we already have this piece of education? Because sellers think they determine the value, and agents do nothing to convince them otherwise. Instead, we encourage the idea just to get the listing. Is that ethical?
If a seller is stuck on his price, then they go into the Make Me Move category. No problem, I take listings like that – and I might get lucky some day.
But for the sellers who want to control the entire process and move promptly, we will have a solid game plan to get them top dollar now:
The Slow-Motion Auction:
Tune-up house.
Open house for 5-10 days.
Buyers engage in open bidding at the house on X date.
Sellers and buyers deserve to have this full transparency, and the ethics it would impose on agents will save our jobs.
Realtors are mounting an effort to participate in the real estate portal business. The Broker Public Portal will be the national collection of listings, much like realtor.com was designed to be.
To those who thought Zillow had already won, this was welcome news.
All we have to do is build a consumer-facing website with more bells and whistles than Zillow or Trulia, and advertise it coast to coast! Yahtzee!
Not so fast.
Here is the link to what the Chairman thinks about the Broker Public Portal after two years of work:
There has been a lot of discussion about the Broker Public Portal’s ability to compete with the existing national portals. Someday we may get there, but that is not our short-term goal today. Our goal is to join in the development of the best national MLS consumer search experience. Some believe we are competing against local MLS consumer websites. but we think that the BPP offers a national reach that is complementary and unprecedented, and that will help brokers and agents dramatically increase their connections with online consumers.
Great – maybe if we don’t mention them by name, and don’t compete with existing national portals, they will just go away!
Zillow is wagging the dog now, and they will determine our destiny.
