Zillow redux: A post-diluvian retrospective . . .

Drew Meyers is doing an excellent job of cataloging the Zillow coverage. My plan is to ponder issues arising in posts and comments, here and everywhere. No guarantee that I’m not missing something, so it would be a great favor if you would point out my lapses.

Zillow understands PR. They’ve had company bigfeet out doing media drop-ins for a while, and, for the weblogging community, David Gibbons separately briefed Ardell DellaLoggia, Cathleen and me, and a third weblogger in San Francisco, identity undisclosed. The point of all this was to spread advance news of the upgrade, but to have it embargoed until 10 PM last night. I’m sure the resulting blog-frenzy suited them just fine, but, even knowing what was going to happen once news broke, there was no way I was going to miss this show.

But: This is why I wanted to go at the thing in the greatest depth I could achieve, right from the beginning. The fact of the matter is, the center of gravity in the real estate world shifted last night — away from Chicago and toward Seattle. It was only a partial shift, and it might turn out to be only temporary, but the professional porcupine that is the National Association of Realtors lost a double-hand-full of quills last night. If it continues to lose more than it manages to grow back, soon enough it will be nothing more than a naked rat. Then what?

The person I was most interested in hearing from last night was Galen Ward, and I said so right away at Rain City Guide. He didn’t disappoint, delivering a trenchant analysis without the advance notice Ardell and I had:

Zillow has the best shot at getting the chicken or the egg (you need one to get the other). Most non-MLS sites (Trulia, Propsmart, ForSaleByOwner, etc.) have had the nasty problem of beginning with no listings and no searchers (no chickens or eggs). Each has tried a novel and somewhat successful way of getting searchers or listings – crawling sites for listings, offering free listings, pay-per click ads to lure searchers, etc. None of them seem to have hit the point of no return: the point at which searchers start using the site exclusively, causing any remaining listers to clamor for inclusion. Based on the marketing buzz alone, Zillow may be the first to hit this point. Once (if?) they hit some critical number (70%? 80%? 90% of listings?), the tide will turn and nearly all holdouts will list themselves.

More:

Agents and brokers of the future, you’re also kidding yourself if you believe that Zillow is responsible for shrinking commissions (they’re coming) and a changing industry because it’s not: Zillow is just the product of the web’s relentless market and information opening power. We are leaving the time of the agent-leads-consumer model in the real estate industry and we are entering the time of the agent-coaches-consumer model.

Galen comes and goes on whether or not there will be an API to facilitate the bulk uploading of listings. I asked David Gibbons about this, and the answer was, “Not now.” My take was that there would be one, eventually, but that they might want the data format to shake-out through use before committing to an XML format, which would be much more onerous to change.

Here’s the deal: Many if not most listings to aggregator sites like Trulia and PropSmart come to them through third-party vendors: Companies like PostLets or website vendors like Number 1 Agent. I may be the only real estate broker in America who wrote an XML parser to feed his own listings to aggregators, and I did it more as a proof of method than because I thought it would make a difference in sales. But look at this the other way: A Zillow.com listing will be a lot more elaborate than what you can get from Trulia or PropSmart. And unlike an MLS listing, where the lister’s contact information is concealed, every one of those listing is a potential double-dip, a click right back to the listing brokerage. It makes sense to me for major brokerages to list everything, and it makes sense to me for Zillow to make it easy for major brokerages to list everything. There are only a few hundred MLS systems nationwide. The API team might just build and distribute free tools to take the broker’s feed and pump it straight into the Zillowstream.

Kris Berg, Alpha Centauri to my own blonde goddess, offers this:

Revolutionary, yes, but a national MLS system Zillow will never be, at least not without the cooperation of every local MLS in the country. This will ultimately leave Zillow as yet another home search tool that, while clearly beefier in content than its competitors (the 1000 pound GodZillow), will offer only a piece-meal from the homes-for-sale menu. I have written of my own information-overload-hell, and real estate consumers are no doubt feeling my pain. It is a full-time job to keep abreast of all of the places I could possibly gain on-line exposure for my listings. With the exception of the MLS, each opportunity can present the homebuyer with an only an incomplete piece of the pie. The on-line customer (most of the population now) can only be frustrated at best and confused at worst with the information fragmentation.

Other people are hitting similar points.

On the one hand, this is beyond dispute. An MLS system is a fairly comprehensive catalog of available homes containing highly detailed information about those homes, confidential information such as showing instructions — and an offer of cooperation in the form of a co-broke commission.

Zillow isn’t really any of those things right now. It will never offer the kind of detail and searchability of an MLS system. It will never offer a co-broke, although nothing prevents sellers and listers from specifying a co-op commission. It may, in due course, be hugely, even universally comprehensive. Its actual home inventory approaches the universal even now, and, even if an MLS-listed home is not listed on Zillow — this is the World Wide Web. Nothing prevents buyers from researching Zestimates on their own — perhaps with the one-click Zillow API tool your broker so thoughtfully supplied. This is why I think Cathy’s objection from last night is almost an anti-objection: If the list price is higher than the Zestimate, and you make it difficult for me to discover this fact, I already don’t trust you.

But: It doesn’t matter anyway. The MLS is an inventory. It is not universal, and a huge number of homes sold are not MLS-listed. Craigslist has an inventory. Zillow will have an inventory. Having a fairly comprehensive inventory is important to Realtors, but the fact is that buyers buy from the available inventory, whatever that is. I had a great aunt who insisted on shopping every supermarket for the best-priced sale items. Most of us pick up whatever is on the shelf at Safeway.

Moreover, on-line home shoppers are not shopping for homes as much as they are shopping for agents. When they click through on one of Cathy’s listings, they are forging a relationship with Cathy — who does have access to most of the available homes in the Phoenix area.

The bottom line is, if ordinary people take their on-line home searches to Zillow as a matter of overwhelming preference, Zillow will have become the de facto national MLS system. What it cannot do will be much less important than what it does do.

Joel Burslem wonders about Intellectual Property issues with the Make Me Move feature, and his wondering elicits a comment from Redfin CEO Glenn Kelman.

Just in passing, Trulia announced yesterday that it has a million listings on line. Sic semper tyrannosaurus.

Ardell cautions agents to get their seller’s consent before posting a listing to Zillow.

Ardell was teasing Jon Ernest of The Property Monger all last night, to get him to come out and play this Zillow game. She had a post of links going, and now Jon responds in kind:

You’d think that being on the East coast you’d have an advantage on being informed of late released hot topics. I recently learned that west coast bloggers don’t actually get any sleep.

Well Zillow actually got something right, finally, and in hindsight they’ve been getting it right all along. I’m not talking about their Make Me Move, wiki, listings for sale, or the fact that it all sums up to a move for market domination.

How can you not be blown away by what is staring you right in the face as we speak. The amount of publicity they’ve managed to receive is staggering. And they did it by embracing bloggers, keeping them informed, and rolling with the many punches they have received.

Realty Thoughts has a thoughtful post, with none of the acrimony they have every right to exhibit under the circumstances. Not to rain on their parade, but my thinking is that, of the recent AVM entrants, the one that is potentially the most interesting is CyberHomes from Fidelity. I say this because a national title plant is a valuable resource — maybe as valuable as access to every MLS feed. Even so, I think all of the old line companies in real estate will sprout as many feet as necessary, so that they never lack for a foot to shoot themselves in. In other words, a Fidelity just might be able to squash Zillow and all the Realty.bots like bugs — if only they could master the art of hitting their ass with both hands.

Sellsius wonders if Zillow will allow sellers to opt-out of the Zestimate on their listed home. Two words: Like fun. Zillow’s stock in trade is its transparency: “We may be wrong, but we’re boundlessly forthcoming.” They would be fools to hide anything.

The Pine Needle Lawn has more on the possibility that this is a death blow to Trulia.com:

So what does this mean? It does not mean much for LakePlace.com (the majority of our listings are not in the Zillow database) – but it is probably scaring the pants off of Trulia.com – a real estate website that raised about $8M earlier this year. You see, Zillow has a much larger war chest, a much more experienced management team, a much more robust website, a much larger database of real estate info, a much larger user base…and now they will be competing on Trulia’s home turf.

…and also some scary thoughts about fees for listings on Zillow.com…

I asked Zillow a question – will they guarantee that listings will always be free on their website – I received a politicians answer – “We have no plans to charge a fee” – so I asked again – Please either guarantee it…or say that you cannot guarantee it – again, “We have no plans.”

In my mind – the answer is clear – Zillow will be charging for listings in the future. They are asking realtors and brokers to build up their content, and once they have a large inventory, they will turn a switch and introduce a fee. Basically, they (like trulia) are/will be asking you to pay them to provide them content. Not a bad deal if you can pull it off.

General impressions: More agents seem to hate Realtor.com than fear Zillow.com. I’ve seen spots of interest in the real estate wiki as a way of building credibility, weblog traffic, etc. A lot of blogging Realtors have posted listings to Zillow, including my own best beloved.

Finally, The Phoenix Real Estate Guy says, “Enough Zillow already!” — but he doesn’t really mean it…

BloodhoundBlog’s team coverage of the Zillow.com upgrades:

• Greg Swann: 2006 is the Year of Zillow: The 900 pound AVM has been upgraded to be a free listing platform and the presumptive national MLS system…
• Greg Swann: Early morning Zillow news round-up…
• Greg Swann: Zillow redux: A post-diluvian retrospective…
• Kris Berg: Louis Vuitton and the French Revolution
• Greg Swann: You were saying…?
• Cathleen Collins: In the trenches with Zillow.com: A working Realtor’s first-hand experience listing a home…
• Greg Swann: Zillow.com versus Realtor.com: Nothing grows in the shade of great tree…
• Russell Shaw: Thank You, Mr. Barton, May I Have Another?

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