Change in Real World Affect Online Real Estate Sites
October 22, 2008
By: Jeremy Rivera
Author's Website: http://www.theriversidehomesource.com
Real World Impact on the Digital World
The internet doesn’t always reflect the reality of day to day life, especially when it comes to online businesses. For example, Google has posted increased earnings despite the economic woes that we hear about on a daily basis. However, online real estate is being hit a little bit harder by the changes in traditional real estate. We can see this problem hitting not just small agent websites that populate the web, but also large aggregators. One of these companies, Zillow, has posted strong gains in traffic, but also has reduced it’s workforce by 25%.
Escaping the Real World
There is an upside in this situation, for agents and for consumers. For agents, it is a reality check, and a call to move forward further into the digital world. This means getting a web presence, making sure your business is listed in Google Local, Yahoo Local, and Live Local. As well as creating a persona online, participating in Social Media. This means far more opportunities for exposure to buyers who weren’t available to them before now.
The advantage for consumers is unprecedented access to Real Estate agents allows them to make smarter decisions, and have more communication through different mediums, as well as access online tools to facilitate everything from a home valuation to scheduling a mover, painter or staging expert. Do you think that the long term impact of the real estate market change will be overly positive for agents and consumers or do you perhaps see doom and gloom?
- Stumble it!
- Categories: Google, Zillow
Enjoy this post? Subscribe to the Geek Estate Blog feed or get updates via e-mail
Comments
5 Comments so far
the dude on October 22, 2008 9:24 am
So basically zillow is doing even better because they are making MORE revenue from increased traffic an LESS cost from techies to develop their datawarehouses.
Zillow, is just biding their time until the California MLS integrates their databases in 2009 and the RETS feed gets stable and then they will suck in all the CA MLS data and OWN online real estate viewing. Of course in order to do so they will have to provide legitimate services to real estate buyers or sellers so that is when they will acquire Redfin since they should have hammered out the best practices for online real estate sales. Then the realtors of this country will finally be consolidated and every realtor will kick themselves for having created a profile on zillow, contributed to zillow forumns, and basically enabled zillow to take them out.
David G from Zillow.com on October 22, 2008 11:36 am
dude -
That’s quite an imagination you have there but I can confirm that Zillow has no plans to broker real estate transactions. Don’t get me wrong, I have immense respect for what the Redfin guys have achieved but we plan to remain a media company.
Jeremy Rivera on October 22, 2008 12:01 pm
I think that sites like Zillow actually are forcing the evolution of the real estate sphere. Having worked for many years building websites for Realtors, I have found that unfortunately, a large number of Realtors are not tech savvy, and many are not even tech-literate outside of the occasional email. The vast audience that is drawn through Zillow is an audience that Realtors previously couldn’t harness because of their low tech levels. Zillow has raised the bar, pushed realtors to be more savvy, while at the same time giving free exposure to listings, much like Google gave free exposure to websites. I think that property “Aggregators” like Zillow will continue in a beneficial role. Certainly, some realtors are taking more advantage than others, and they deserve the success they acheive.
Seth Siegler on October 22, 2008 1:36 pm
Really interesting post.
I’d say that this change and trend towards transparency and consumer skepticism is undoubtibly great news for home buyers and sellers.
Any agent is free to state the facts and carve out an online presence. At that point it’s up to the consumers to choose the right fit for them. The added benefits of new real estate websites like Trulia, Zillow, and even the better brokerage or agents sites, is that consumers have the info that they need. They don’t need to rely on agents personal preferences or be hindered by the extent of an agents potentially limited knowledge.
Overall, great news for consumers and potentially great news for agents as well. Agents can now deal with clients who already understand the process and know TONS of info about houses and the market. We can spend our time negotiating and making new deals and not be bogged down by huge numbers of showings or hand holding.
I can however see a potential industry shift however. Now that buyers can take some of the process into their own hands and agents will be free and able to handle more sales then before. I can foresee a future with much fewer real estate agents. Maybe even lower brokerage fees. The agents that make the transition could enjoy much more volume with easier, more educated clients…
Really interesting stuff!
the dude on October 22, 2008 2:01 pm
I still think zillow is a trojan horse like I asserted above. So of course a zillow employee will say they have no plans to be an online brokerage. But businesses are in business to maximize shareholder value and the money that could be made by changing this grossly inefficient industry is way more than a few ads around public record info.
Further more, zillow’s entire current business model is threatened because of two things. 1. The CA MLS is currently building a website that will have real time stats, graphs, charts, and trend lines based off of MLS Pending and Sold data. -So there is one less reason to check zillow which will have more out-dated info from public record. 2. The new VOW legislation that completed in August 2008 now enables brokerages to provide online access to MLS Pending and Sold info as long as the client creates an account on the broker’s website. -When brokerages start putting out online tools for their clients to create their own CMAs based off of real pending, sold, and active listings, which have PHOTOS, remarks, and full data, then why would anyone go to zillow to look at a zestimate or use a silly zillow CMA tool which does not even have photos of the solds and does not have very much info on the properties.
In sum, zillow will have to change their business model if/when online IDX/VOW websites gain inertia and make zillow’s value proposition lower. At the same time this threat is an opportunity for zillow because they have core-competecies in datawharehousing and building online CMA tools so they could erect an IDX/VOW website that would be excellent and guide people to actually learning how to do their own CMA. -This would be the most valuable outcome for society and would be incredibly profitable for zillow. Otherwise zillow will just limp along from meager ad dollars and eventually declining traffic as VOW websites and the CA MLS evolve.