Posted by Chris in Uncategorized
In between the regularly scheduled “the world is coming to an end” and “Big Business or the Newest Robber Baron” is coming to take over real estate” there is the same-old doing the same-old. Fortunately, the FORECASTERS are not the same guys – that could get tricky. Both are fatalists: the world is ending guys tend to answer to a higher calling, the real estate guys are usually trying to sell a product or a system they think is the future and the future is now type thing. Press hard, 5 copies, cheap carbon. (:::yawn::::)
Here comes ZILLOW.
No, wait – Zillow has been here for a long time!
That’s the OLD Zillow and everything up to now has been foreplay – there’s a NEW ZILLOW and their REAL plan is to run this like a National Plantation as Broker-In-Chief and “us guys” (meaning agents) are destined to be their minions in the trenches picking cotton for fixed commission chump change. And now that their plan is revealed this is really the OLD Zillow being the REAL Zillow which was their plan from the get go.
Or so it goes.
On the OLD Zillow: tossed you the lead and you were free to do with it as you would and let the numbers carry their relevance. Zillow delivers leads and that is pure, straight up RELEVANCE. Period.
The OLD Zillow is Really the NEW Zillow and its all really the same Zillow. There is a difference now, no question but its really not World Wide Domination -it’s the Big Brokers capitalizing on ZILLOW Mania and Zillow finding its place in the sun.
ZILLOW is in the advertising and Lead Generation business. Period. They have managed to put their name on 140 Million residential properties in the US as if they have something to do with each and every one. Type in any address and BOOM Zillow has the story – yep, on every single one of the 140 Million properties in the US.
Zillow’s second product is the Z-estimate because it doesn’t take long before all the bedrooms, baths and garage bays are counted and verified and its all very interesting but, honestly, that just answers the way the house comes together. Its not like this isn’t important stuff because stuff is important but what really kicks the ball down the field is “what is it worth?” All the bedroom counts in the world are not going to get in front of a REAL-TIME EVALUATION that really LOOKS like the REAL THING.
Better yet, Zillow is so familiar with the house the value was done well before the visitor came a’calling. Since they have their name on every single property out there, they might as well throw a value at it even if it is a guess. (And it is more like a 20,000 foot view) Zillow rises to the occasion and jazzes it all up and it looks like they took real care in figuring it out AND AS IMPORTANTLY they did all this well before the visitor came ‘a calling.
TYPE IN YOUR ADDRESS or any address and Zillow has the facts and pictures, previous MLS data and whether it is currently for sale OR NOT. AND, they have a Z ESTIMATE! Right there in front of God and EVERYONE.
They put their name all over it and next thing you know visitors start to ask the harder questions and they refer those to their trusted partners in that area and in side of 5 nanoseconds there is a double BOOM – the lead goes to Zillow’s real client – real estate agents who buy rent on that zip code in their portal.
So what’s up with the NEW ZILLOW? In fact, who said there is a NEW ZILLOW anyway?
We there is a NEW ZILLOW and it’s the same as the OLD ZILLOW except more of the same and BETTER.
(a little back story matters here)
ZILLOW competed with REALTOR.COM for market share, visitors and action in general and beat them and not by a little bit. Not only did they beat them, they crushed them in front of the whole planet. They did it and bragged about it and there was no hiding the facts: Zillow had a market cap of $5B and Realtor.com sold to Murdock at a garage sale price of $900M.
Naturally there is no just one thing, but Zillow had a major advantage: ZILLOW was permitted to display LISTED properties and NON LISTED properties in the same search. Zillow is not a member of the National Association of Realtors and, therefore, they are not held to the same standards as Members.
You might say “the FSBO market” has never been more than 10% of the overall market so what’s the big deal? In fact, it is estimated that 6-7% is the norm. But that is enough to give Zillow a better result for the typical Visitor. (It’s a big deal).
WORSE, the LISTED data came from ListHUB, the NAR’s primary MLS data product. Think of ListHUD as the spigot in the tree of MLS data: all the MLS’s run their feeds through ListHUB as part of their association with the NAR.
That is worth repeating: Zillow was buying their data from ListHUB and then in turn combined it with NON LISTED FSBO’s and crushed Realtor.com as America’s go-to source for real estate information.
The story is that when Murdock was negotiating the sale (he likes to buy high profile distress products) he said.
“So let me get this straight. You (the NAR) are selling ZILLOW the data they are coming back and whooping you with?”
There was that “ah huh response” as the headlights of common sense reasoning had just body checked them into the wall.
“Tell you what? This sale is contingent upon Zillow being cut off from ListHUB.”
And, that is exactly what happened.
Zillow’s CEO was all cocky and nonchalant about being cut off but they were scrambling for data anywhere they could get it. No data and they were screwed, and they knew it.
ZILLOW reached out to every MLS they could find and bought MLS data direct from the local source. In the cases where the data was iffy or not available they convinced big Brokers to sell them data. The MLS’s were happy because they were being compensated by one of LISTHUBs big customer and they needed the money and still do. It was a little complicated because every MLS service is different, and the terms varied. Zillow didn’t really care about that: Zillow breaks the rules constantly and all they get is a call from the MLS rep to “fix it” and they do. (This happened a lot and now it won’t because the local MLS is their source)
But there is a real problem for ZILLOW here. Their business model is dependent on a patchwork of data sources any or all of which can and might go bad at any time. The dynamic has changed and not a little bit.
So there is a NEW ZILLOW and it’s the same as the OLD ZILLOW except they are really having to move toward the big Brokers in way that is mutually beneficial. This is the subject of another entry; for the time being it seems that ZILLOW is less likely to be the BG BAD WOLF as the conspiracy minded suggest and rather they are becoming the connoisseur service for the Big Brokers to control leads and transactions in a way that a nationally recognized HOUSE-SAVVY BRAND is perfectly positioned to do.