Zillow Announces Upgrades To Site As First Birthday Approaches
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Clarification
About The Zillow Website
Zillow.com the website that enables homeowners and real estate
voyeurs to check out their homes' values and those of their neighbors and friends
has added a couple of new wrinkles. And, because they heralded these "upgrades"
with a press release, we decided it was time to take another look at the site.
Zillow was founded earlier this year with the stated mission of providing cutting-edge
tools and information to help consumers make smarter real estate decisions.
At the time of its creation it was a phenomenon. It was featured on most networks
and so many people flocked to the site - and stayed to process multiple searches
- that the web site crashed. At its most basic it allowed visitors to check
out the value of their homes and those of neighbors and friends but it had some
fun features. Its instant valuations, called "Zestimates" were
largely drawn from public records, i.e. assessors' data and updated with actual
sales data. Where adequate information exists it is plugged into a formula to
refine a market value for individual homes. Therefore, the Zestimates are a
melange of facts and speculation and while Zillow originally provided guidance
in the form of stars to indicate their own confidence in their information,
these have disappeared. The reader would be well advised to seek additional
data rather than making important decisions based solely on Zillow.
In early February we reviewed
Zillow in several articles and were basically under whelmed. We tried to
cut a lot of slack for the site due to its Beta status, but found some wildly
out of whack values, huge parts of the country that were not covered, (supposedly
around 49 million homes were in the database at that point) and small but persistent
inaccuracies. But there were also a lot of fun features like one that allowed
a visitor to add improvements to a house to see what effect a new kitchen or
a pool would have on the Zestimate. This feature is apparently still available
but only to those who have "claimed" their home. As far as we could see comparables
cannot be manipulated to approximate an appraiser's view of the property vis-a-vis
comparables.
Today Zillow claims to have created a web page for almost every home in the
country - some 70 million at present - and we found that the out-of-whack
numbers have been eliminated, at least in areas where we were competent to make
a judgment.
In addition to some of the features that were there and now seem not to be
and in spite of many improvements to the database, the site is just hard to
use. We played around for more than an hour before we could find a house (any
house) that was for sale by owner or one where the owner had challenged one
and all to make him move. Once we figured out how to locate these properties,
and it would not have been that difficult if any instructions were provided,
there was constant slippage of the search criteria (we were selecting only by
city and number of baths) and we were bounced back to macro views.
Homeowners can now "claim" their homes. By proving ownership
- either by entering a credit card with the correct billing address (Zillow
promises to destroy the information upon verification) or faxing or mailing
such documentation as a deed, tax bill, or utility bill - an owner can change
the information that Zillow has created for the property, input improvements
that may not appear in assessor's records or correct inaccuracies that do, list
the home for sale, or set a Make Me Move price. But we are getting ahead of
ourselves.
In a press release earlier this month, the Zillow folks announced a "major
upgrade; homeowners and agents can now post homes for sale, for free."
They also launched a feature called "Make Me Move?" that allows homeowners to
list their dream price - the return on their investment that would indeed make
them pack up and get out.
As of December 18 Zillow claimed to have 9,880 homes listed for sale,
for free, on its site. In the metropolitan areas we visited Zillow did not include
homes from multiple listing services on the site but, as many of the free ads
are supplied by real estate agents, there is bound to be some duplication with
Realtor.com and websites operated by agents in the local area. The Zillow listings
are multiplying exponentially since the press release, but, is this a needed
service, another add-in that agents can use to market their own service to sellers,
or just more noise in the system?
Consolidated listings for FSBOs are hardly revolutionary. In the late 1990s
a major mortgage company in New England managed to alienate every agent in a
tri-state area by placing full page ads in major market newspapers with FSBO
listings. Run an Internet search on "FSBO" and see the number of
sites - some free some not - that pop up nationwide. If a single
nationwide site for FSBOs were to emerge it would be helpful for both buyers
and sellers but as Zillow currently structures its listings, one has to wade
through both listed and FSBO properties and the former are likely to be duplicates
of listings that the buyer has already reviewed. It was basically a time sink.
The "Make Me Move" feature left us scratching our head. Home
owners are invited to list their homes for sale at a dream price. Should anyone
be interested in such a property at such a price, there is a mechanism to contact
the owner and proceed from there.
But why?
This might have been useful when the real estate engine was roaring and buyers
were desperate to buy homes in certain school districts or with unusual features
such as historic value or a water view; back when there were potential buyers
prowling the streets and leaving notes in mailboxes asking to be contacted should
the owner wish to sell. Those days are, at least temporarily behind us. But
the idea that, even then, anyone would be looking for a 3 bedroom 2 bath ranch
on a suburban street in an ordinary town at a price that greatly exceeds the
market value is just ....dumb.
The MMM listings we pulled up pretty much met that profile; in Seattle a house
with a Zestimate of $395,000 and a MMM of $504,000; Waltham, Massachusetts a
house with a Zestimate of $443,762 and an owner's own estimate of value
of $488,876 could be purchased for $512,000. The list goes on. Whether this
is an ego trip for sellers, whether they would even sell at such pie in the
sky prices, 5,431 owners have listed their homes as MMMs. This again is a huge
increase over the number of listings one week ago.
A third new feature is Real
Estate Wiki which the Zillow owners have "seeded" with 100 articles on all
phases of real estate subjects are broken down into categories for buyers and
sellers and further into sub topics such as getting started, the buying/selling
process, and so forth. When we first visited a week ago those articles we reviewed
appeared to have been commissioned by Zillow and were factual and well written.
Today the Wiki had emerged. A real estate company in San Diego was using a one
paragraph article to drive business to its website; a mortgage broker provided
some pretty startling information about his profession and one had to wonder
about the accuracy as well as the motivation. As with all consumer-generated
information the reader needs to be alert to the possibility of misuse or manipulation
and it would be nice to know if Zillow is monitoring the postings for misleading
information or potential mischief.
So will these innovations revolutionize the way real estate is bought and sold?
Clearly the folks at Zillow hope so. Are the changes visionary, maybe a better
question would be, are they useful?
Please share your thoughts below about what impact, if any, Zillow will have on the real estate industry.
Clarification
About The Zillow Website
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