Zillow sent out this email today regarding the uploading of listings:
We wanted to let you know that Zillow Group will no longer accept manually entered listings from agents and brokers as of May 1, 2017. We are taking this step to provide buyers and sellers with the highest-quality listings data possible, and to provide agents and brokers with a simple way to market their listings. Broker and MLS feeds are the best way to achieve this.
Sandicor, our MLS, refuses to upload every listing. Instead, each brokerage has to sign a separate agreement between them and Sandicor to authorize the Zillow feed. There are already plenty of agents who don’t know that the Zillow auto-feed was terminated, and now there will be other brokerages who refuse to comply, and/or don’t realize that their listings aren’t on Zillow/Trulia.
Oh well.
There are other questions though:
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?
Will they still allow for-sale-by-owners to manually feed?
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?
Zillow has their foot on the neck of the real estate industry, and they can do whatever they want. Who would stop them? They are beholden to the high-paying Premier Agents, so expect more favoritism in that direction.
Zillow says they have improved their zestimates. The median error rate is 5.1% in San Diego, which means half of the zestimates are within 5.1% of being right, and the rest are worse than that – you just have to figure out which is which!
Zillow has a strategy to help accelerate the real estate industry’s evolution to the survival of the fittest. Zillow is looking to help the best real estate agents — the ones who can best capitalize on the leads that Zillow generates and will therefore pay the highest ad prices — to extend their domination.
“We are accelerating the broader trend across the real estate agent population of higher-producing agents gaining market share from those who are less productive,” Chief Executive Spencer Rascoff said on a November conference call with analysts.
The number of agents advertising on Zillow declined modestly in the third quarter to 89,147, but that was part of a planned shakeout. At the same time, the number of advertisers spending at least $5,000 per month rose 79% from a year ago, while average spending per agent rose 46%.
Zillow and our local MLS provider Sandicor reached the Great Impasse a year or two ago when they couldn’t agree on terms under which Sandicor would keep feeding our listings automatically to Zillow. Agents complain all the time about Zillow’s inaccuracy, but it’s our own fault – agents have to handle them manually, and many are unaware.
But Zillow out-foxed Sandicor, and went directly to the big franchises and made their own deals to obtain their listings. Zillow is now reaching out to the little guys too – they called me and offered to upload my listings direct from the MLS, and all I had to do is sign one form.
What’s the point?
Zillow has the killer instinct, and will throw their weight around to get what they want. They are willing to cross the line occasionally too, evidenced by their $130 million settlement in the Move, Inc. lawsuit, and their frat-house employee lawsuit they settled for around $5 million.
I mentioned briefly that the brokers are attempting to build a portal to rival Zillow, but it’s a waste of time and money. Zillow already has the eyeballs, and they get it about advertising. Any new portal would have to build a better mouse-trap AND advertise as much as Zillow just to catch up.
Or deny listings to Zillow.
But Zillow has already out-smarted any attempts to block listings, because they have gone to the brokers directly and cut their own deals. The Zillow Team realtors are going to stick with Zillow, not go to some broker upstart portal.
But here’s the catch:
The Broker Public Portal promises to send leads back to the listing broker.
It is all they have to offer the brokerages, and it sounds tempting, because no listing agent wants the three-headed monster (Zillow’s three outside agents) advertising on their listings.
But such a system would encourage more in-house, dual-agency transactions.
It is where the industry is heading, whether it is ethical or not. Zillow is already way ahead with their ‘Coming Soon’ ads, and every real estate trainer is prodding agents to ramp up advertising of hot new listings prior to MLS input. Unfortunately, NOBODY talks about the listing agent’s fiduciary duty to the seller to expose the home to the entire marketplace via the MLS.
I see 2-3 listings per day being inputted as ‘Sold Before Processing’, the realtor marketing sessions tout that ‘deals are being made’ at their private meetings, and most brokerages offer their agents a better commission split if their listing is sold in-house. The ethics of exposing a listing to the entire marketplace via the MLS is being ignored.
Dual agency is tricky for most, and it can be messy too if something goes sideways – the agent is squarely in the sights of every lawyer.
With the tight inventory, agents don’t feel the need to share their commission with an outside agent – especially one who might make repair requests or screw up the closing somehow. It will be better to hog the listing, make higher commissions, and have easier closings.
We are screaming towards single-agency, where the buyer will get no representation. If they want advice, they can pay for a buyer’s agent themselves, or just get dragged to the finish line by the listing agent’s clerks.
Hope you like the price and condition, because if you don’t, the next guy will.
It’s that time again – experts making predictions for next year!
We might as well start with the big kahuna, whose predictions are a tad vague:
Here is Zillow’s look ahead at the 2017 housing market:
Zillow’s 2017 Predictions
Cities will focus on denser development of smaller homes close to public transit and urban centers.
More millennials will become homeowners, driving up the homeownership rate. Millennials are also more racially diverse, so more homeowners will be people of color, reflecting the changing demographics of the United States.
Rental affordability will improve as incomes rise and growth in rents slows.
Buyers of new homes will have to spend more as builders cover the cost of rising construction wages, driven even higher in 2017 by continued labor shortages, which could be worsened by tougher immigration policies under President-elect Trump.
The percentage of people who drive to work will rise for the first time in a decade as homeowners move further into the suburbs seeking affordable housing – putting them further from adequate public transit options.
Home values will grow 3.6 percent in 2017, according to more than 100 economic and housing experts surveyed in the latest Zillow Home Price Expectations Survey. National home values have risen 4.8 percent so far in 2016.
Statement from Zillow Chief Economist Dr. Svenja Gudell:
“There are pros and cons to both existing homes and new construction, and the choice for home buyers can often be difficult. For those considering new construction in 2017, it’s worth considering the added cost that may come amidst ongoing construction labor shortages that could get worse if President-elect Trump follows through on his hard-line stances on immigration and immigrant labor. A shortage of construction workers as a result may force builders to pay higher wages, costs which are likely to get passed on to buyers in the form of higher new home prices.
“Those looking for more affordable housing options will be pushed to areas farther away from good transit options, in turn leading more Americans to drive to work.
“Renters should have an easier time in 2017. Income growth and slowing rent appreciation will combine to make renting more affordable than it has been for the past two years.”
The reason the talks broke down between Zillow and our local Sandicor MLS is because Zillow wants to keep and own the data we provide. The board members turned them down, but Zillow has made deals with most brokerages independently, which probably include them keeping the data.
You can see where they are going – they want to use their algorithms to predict everything. Eventually, won’t they be telling you how much to pay?
Data scientists at Zillow Group are developing complex computer programs that detect specific attributes in photographs of homes, which could aid in estimating their value.
Advances in deep learning, big data and cloud computing have converged to allow the online real estate database firm and others to develop technology that mimics how the human brain processes visual images–a concept still in its early stages and once limited to only the largest technology companies.
It’s a daunting task, but one that could have wide-ranging impacts as enterprises look to extract meaning from giant databases of photographs.
Digital photographs from sources like real estate listings and online photos are invaluable in accurately estimating a home’s value, Zillow Group executives say. Humans are far better than computers at recognizing the features within a photo that could boost price, but the challenge is sifting through those photos at scale.
Data scientists at the company are developing convolutional neural networks, computer systems designed to mimic the human brain, trained to correlate specific collections of image pixels with valuation signals. For example, if granite countertops and stainless steel are identified in a photograph, that will automatically signal an increase in price.
“It’s essentially trying to code, in the pattern of a neural network, what we as humans can infer just by looking at the image,” said Stan Humphries, chief analytics officer, who heads the firm’s 100-person analytics division.
Neural networks require heavy computing power and in order to develop the technology, Zillow Group uses graphical processing units and cloud-based services from Amazon Web Services. The affordability of cloud-based services for enterprises has made it possible to develop technologies like neural networks that were previously unattainable.
A brief 10-hour Zillow conference kicked off yesterday. In his opening remarks, Spencer was his usual effervescent self, and assured the crowd that the Zillow dominance is bigger and better than ever:
Unique users of Zillow and Trulia were up to 171 million in May.
Twice as many realtors are at this year’s event, compared to 2015.
The number of Premier Agents has dropped from 110,000 to 80,000.
The Premier Agents are the realtors paying to advertise on Zillow, and those being lauded at this event. He spun the PA decline as Zillow’s desire to only work with the best realtors, but the only qualification to be a Premier Agent is to be willing to pay for their advertising.
He talked about real estate teams and how they are taking over the marketplace. It is more than a subtle change, and it is great for Zillow.
The most successful Zillow realtors are those that have 10-30 people on their teams, and are closing 100-400 sales per year. They spend five-figures per month on Zillow advertising, and dominate their region.
In the beginning, the MLS was created to enable cooperation between realtors, where I sell your listings, and you sell mine. It is an amazing marketplace where competing agents contribute their listings to the overall supply of homes for sale and encourage every agent to bring a buyer – which has always been in the best interest of consumers.
But the team approach is eroding the cooperation between agents. Sure, the teams are happy to share their listings with other realtors; that is, if none of the team’s buyer-agents sell it from incessant ‘coming-soon’ marketing.
This is where a statewide MLS with a voice could make a stand, in the name of doing what’s best for the consumers – share all listings with all agents.
It’s too late though. Zillow and the big Premier Agent teams have too much of a head start, especially in the lower-priced areas of the country where demand is high and scrutiny is low – people just want to buy a house.
Here are some of Spencer’s opening remarks – they are very focused on the mobile experience, and being the biggest provider of American real estate listings to China:
