Zillow Crows, Redfin Stews?
By now, you surely know that Zillow has added virtual for-sale signs to its home valuation site.
Some great commentary by the blogosphere already on this:
Liz Gannes, GigaOM: Zillow Shows More of Its Cards
Natali Del Conte, Techcrunch: Zillow Knows That Everyone Has A Price
Greg Sterling: Zillow Adds Free Listings, Other Features
Also, you must read Greg’s bang-on analysis and Galen’s take on the new feature set too.
But, the thing that really caught my eye was their new Make Me Move program. I’ll let Zillow President Lloyd Frink describe it:
Here’s the concept: Think about a price that would entice you to hand over the keys to your home and move. We think it’s a unique and creative way for homeowners to test the waters and gauge interest in their home
Great idea! Homeowners are going to go mad for it! But wait a tic. Haven’t I heard this before?
Finnish site Igglo pioneered the model last year, but wasn’t Redfin also pursuing a similar strategy?
Digging back through their archives, I came up with this post from earlier this year, Buying Houses That Aren’t For Sale:
This has been an idea that Redfin has been pursuing over the past nine months, after filing a patent application in summer 2005…
So, is Redfin CEO Glenn Kelman steaming at the preemptive move pulled by his cross-town contemporaries today? Does Zillow’s move sink Redfin’s goal to launch a similar service? My guess is that it does.
More importantly, if Make Me Move takes off in a big way for Zillow, will Redfin’s patent application come back to haunt Zillow?
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17 Comment(s)
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Danilo Bogdanovic | Dec 7, 2006 | Reply
I am all for and support giving consumers more power to advertise their properties along with giving agents and consumers more web/internet based solutions for marketing of properties. But I am concerned that the greatly inaccurate “Zestimates” by Zillow and other AVMs will hurt consumers and agents greatly.
I addressed the accuracy of Zillow and other AVMs in a recent post in my blog with the results being quite alarming. With a false sense of hope and pie-in-the-sky valuations, consumers will be mislead and ultimately, hurt financially.
We need to figure out a way to 1) correctly value homes on-line and 2) create an on-line medium in which consumers and agents can effectively market their properties. We’re still a far ways from achieving either.
Erik | Dec 7, 2006 | Reply
Joel, this is exactly what we’ve been talking about around our office as well. The real first-mover in this was Redfin, however they didn’t have the national scale (or scope) yet.
Zillow had the national scale and scope, and pulled off a big “watch this hand that’s waving around, not my other hand” move.
The question is, will Zillow go the whole way? Will the offer the ability to buy and sell a home completely through their site?
David G from Zillow.com | Dec 7, 2006 | Reply
Hi it’s David G from Zillow.com.
Erik -
To clarify, we have no intentions of being a broker. We’re happy being an advertising-supported website.
REBlogGirl | Dec 7, 2006 | Reply
As a developer that works with their API daily, I was beyond elated to read the new feature set and am now, waiting eagerly for the next API release- hoping we’ll have access to some of these enhanced features. As for Redfin, I’ve never had the same feeling about their offering as I have about Zillow’s. It just isn’t that robust and I feel the model is a bit shaky. So, kudos to Zillow for this first strike.
Glenn Kelman | Dec 7, 2006 | Reply
No, no, we are not stewing. Redfin is a Zillow customer and I like what Zillow is doing on its site, especially with its wiki functionality. Redfin is in the business of brokering deals; Zillow is in the business of selling ads.
The only thing that would bother me if Zillow succeeded would be a. the prospect of having to spend more money on Zillow to draw traffic to Redfin b. the work involved to aggregate Zillow’s FSBO listings onto Redfin’s site, which is something we’d like to do and c. the possibility that Zillow would dump its advertising model for a brokerage model, which seems pretty darn remote.
There has been one point of overlap, with Make Me Move. Our own First-to-Know initiative has not been a huge success, and neither has Reply.com’s effort, but that does not mean that Zillow won’t be more successful.
I do tend to think that broker-bloggers are more comfortable praising Zillow than Redfin, because Redfin is a competing brokerage whereas Zillow is not. Saying we’re not “robust” or that we’re “shaky” seems unfounded : we’re one of the most popular MLS-based search sites in our markets, our site has never failed, and our business is out-performing its plan.
We may yet fail, as any startup could, and we’re anxious to make our site better, but so far so good.
Regards,
Glenn
Anony-mouse | Dec 8, 2006 | Reply
Just a little stewing, Redfin?
Marcus | Dec 9, 2006 | Reply
Zillow’s latest online move was predictable and fully anticipated by many. And yet there are those who continue to believe that Zillow, whose founders shook up and virtually destroyed the traditional travel industry model with Expedia, will never succeed in dismantling the much more powerful real estate industry.
Think Zillow can’t do it? Don’t bet on it.
Zillow.com’s real estate “divide and conquer� strategy couldn’t have been launched at a better time. The real estate industry is hurting, and faced with current market conditions, agents will cling to any advantage that they can get - even if it means hitching a ride with the wolf that’s about to eat them alive.
Of course, it’s not all Zillow’s fault; competing technologies are eroding the MLS on a daily basis — sites that encourage the free-flow of information and force agents to leverage more important skill-sets such as local knowledge, negotiation skills and an understanding of the legal issues that surround successful real estate transactions.
The truth is, the traditional real estate model with the MLS as the mothership is already dead in the water. And if you don’t believe it, you’re probably over 50.
So watch the next chapter of the new world unfold as the real estate industry begins to utilize this new service, and in so doing, unwittingly accelerates the demise of the hand that’s fed them for so long — the MLS.
Marlow | Dec 10, 2006 | Reply
Redfin might be one of the most popular MLS-based search sites in their two markets, but it costs them over $5000.00 a week in advertising and PPC to get there.
jf.sellsius | Dec 10, 2006 | Reply
The death of the zestimate will be the true birth of zillow. Until Z relieves itself of that albatross. Realtor.com will have time to revaluate what it does or fails to do for its members. Marcus’ logic is spot on. It is certainly possible. Z has already obtained licenses in several (unnamed) states. Why?
IMO, Z planned to be a listing site from day 1. Can someone please find that smoking gun memo?
Austin Real Estate | Dec 10, 2006 | Reply
Marcus said:
> …. force agents to leverage more important skill-sets such as local knowledge, negotiation skills and an understanding of the legal issues that surround successful real estate transactions.
Exactly. We are not dispensable as were Travel Agents, but our NAR and Local MLS Leadership people are not properly looking forward as to how the value proposition of Realtors needs to be realigned with current technology and the role Buyers and Sellers want us to play.
jf.sellsius | Dec 14, 2006 | Reply
David G
Sellsius here. Just curious—you said Zillow has no intentions of being a broker— but do you intend to be part of the real estate transaction, possibly as a “consultant”.
BTW, Zillow never intended to be a listing site either—-or did they?
David G from Zillow.com | Dec 14, 2006 | Reply
Hi, it’s David from Zillow,
jf -
Zillow has no plans to represent or advise real estate consumers in their transactions — I don’t know what a “real estate consultant” does (that one is new to me), but I hope that answers your question. Also, For Sale content was always a part of the plan. As Marcus says above … this move should have been predictable.
jf.sellsius | Dec 14, 2006 | Reply
Hi again David.
A “consultant” or any other term you care to use would be a person who stands between the buyer and seller to advise/facilitate a sale for compensation. You answered the question in any case. Thank you.
I was unaware that For Sale content was part of the Zillow plan. Is this public knowledge or have you given FOREM an exclusive?
James Corle | Dec 17, 2006 | Reply
I used the zillow site to get a value on my home. I was given a value that was twice the amount my home was actually worth. Therefore I
think the site is worthless and would not use it again or recommend
it to anyone else.
jf.sellsius | Dec 17, 2006 | Reply
James,
Your comment brings to clarity 2 important zillowistics:
(1) Knowing the statistical median margin of error does NOT help when you examine the guestimate of a particular property. YOU KNEW the house was outside the margin of error, big time. But how would I? If I did not have your knowledge, I would guess that the value may only be off a bit, based on the margin of error. This is the underlying fallacy of statistical medians or averages (amalgamated from a whole range of data)—they cannot predict value of a particular INDIVIDUAL unit, especially one that has not been “seen by the machine”.
(2) Public Data cannot self-validate. Thus, guestimates based on unvalidated data are inherently suspect. Somebody needs to double check. Somebody still has to do some work. This extra work then tells you if Z was helpful–but it’s AFTER the fact of doing the work.
That’s why Z had owners step in–to fix their data. For homes with no owner corrections, what are you to suppose?
Z’s statistical median mind game is great if your playing craps in a casino and you want to know your odds on a throw, but buying or selling real estate is a major investment which should not be determined to any degree by the toss of the Zillow dice. That’s just crap.
Danilo Bogdanovic - real/diaBlog | Dec 17, 2006 | Reply
Joel,
I agree with you 100%! Ny buddy (and fellow blogger) Tony Arko posted a blog on real/diaBlog on how the various AVMs stacked up against each other and how they compared to the true value of his house. They were up to 33% from the true market value of his property!
I think we should all get together and form our own site. All we have to do is write some html and pick a number out of a hat each time We’ll get $53M in funding within 9 months like Zillow did and then we can all retire in a few years. HA!
jf.sellsius | Dec 17, 2006 | Reply
Good one Danilo. MSN Money did a AVM contest back in June that included zillow. The winner? Electronic Appraiser (FL). They’ve been around since 1999. They charge $29.95. I had the opportunity to speak to Greg Sullivan, Pres. of EA at Inman last year and he told me they use title company data among other sources.
http://moneycentral.msn.com/content/Banking/Homefinancing/P150627.asp?GT1=8176