Zillow Makes Serious Challenge to Realtor.com and MLS Online

December 17, 2009

Residential

Zillow to Compete with MLS and Realtor.com

Zillow-Chicago-sqZillow is trying to compete with the Big Boys. The Big Boys in this case are the Multiple Listing Service and Realtor.com. In order to access the MLS in Illinois, a person has to be a licensed Realtor/Broker while Realtor.com is used by consumers looking to purchase homes. The MLS feeds Realtor.com the homes that are currently on the market.

Realtor.com Delays Frustrate Agents, Sellers, and Buyers

There are quite a few problems with Realtor.com. First and foremost, updated information on the website lags behind by up to 72-hours. For example, a house that is posted to the MLS could take up to 72-hours before being posted on Realtor.com. Realtor.com also charges the real estate agent membership fees to post a listing to their site. The site adds additional charges if the agent would like to display interior photos.

Are “Zestimates” Ze Truth?

These charges led many agents to turn to Zillow.  Zillow was a free web site that offered what they termed a “Zestimate” or a desk top appraisal. They pulled data from several sites that included Realtor.com and county assessor offices. Zillow also relied on the seller’s agent to be honest with the closed sales prices of the homes. In slight contrast, the MLS requires all agents to input the true closed sale amount. Illinois state license law requires that agents post the true sale amount. Zillow, however, does not. Oftentimes one would find a “Zestimate” to be off the market value by thirty to forty percent. These “zestimates” lead the seller into having false expectations of their property value.

I for one was not a fan of Zillow.com but did in fact post listings on their web site. The misleading estimates disturbed me, especially since I am a Certified Appraiser. I then had to explain over and over again to my clients as to why it was so misleading.

Zillow to Charge Featured Listing Fees

Yesterday, I received an email from Zillow that asks for a Featured Listing fee but does little to address the misleading estimates on their site. The e-mail read in part:

Beginning today, in order to post a home for sale on Zillow, you can either buy a Featured Listing for $9.95 per listing for a 180-day period, or, if you have 50 or more listings, you can send us a listings feed, for free. Since you currently have a home posted for sale, your listing will expire on January 13, 2010 unless you extend it by purchasing a Featured Listing. We feel this change will help improve the quality of listings on our site, which will provide a better customer experience for the millions of buyers who visit Zillow each month.

Will Changes to Zillow Affect Quality of Listings?

I truly look forward to watching what will happen next. I predict that by this time next year, Zillow will offer to list properties for free again. What do yo think?

We would like to thank BlueFairlane for sharing today?s photo via the Creative Commons License.
Email This Post To a Friend. Email This Post To a Friend.

About Katie Anderson

Katie Anderson is a respected and successful broker at Sudler Sotheby’s Realty as well as a certified appraiser. She specializes in representing clients who purchase and sell condominiums, town homes, single-family homes and income property in the Chicago land area. In her small amount time in the real estate game (she became an agent in 2003) she has assisted in excess of 400 deals and over $200 million in sales and continues to use her skills as a certified appraiser. Katie resides in Chicago’s Bucktown neighborhood with her loving husband and 4-year-old-daughter, where she spends much of her spare time with her family and friends. You can contact her at katie@thechicago77.com or at andersonbraack.com

View all posts by Katie Anderson

5 Responses to “Zillow Makes Serious Challenge to Realtor.com and MLS Online”

  1. Mitch Says:

    I agree with you on the misleading estimates by Zillow, which sometimes leaves me questioning some of their surveys as well. Still, it’s a service that might benefit some people, so why not go for it, right?

  2. Sara Bonert Says:

    Hey Katie – I wanted to add some more information to your section about Zillow charging.

    This charge ONLY applies to people who MANUALLY post their listings to Zillow. About 97% of the listings that comes to us today, come from some sort of feed. In your case, Sotheby’s International sends us an automated listing feed. This will remain totally free – so this change does not personally affect you in any way.

    The charge of $9.95 for 180 days of advertising (basically $1.67 a month over 6 months) is for those that manually enter listing in the system (the remaining 3%). Further – if they pay this fee, the listing will be Featured, meaning it will show up at the top of search results. Featured listings typically get 6 times more traffic.

    Prior to this change happening yesterday, it cost $10/listing/month to be featured. Today it is basically $10 for 6 months – so we actually implemented a huge price cut.

    One of the big reasons we did this was because often when people manually entered data, they forgot to update or remove it. So by charging a nominal fee, this should help the accuracies of the data and curb abuse.

    Hope that helps clear up the message you got. Please let me know if you have any more questions about it, happy to answer!

  3. Randy Whiting Says:

    While it is clear that Zillow.com has become a highly trafficked site there is no chance that it will ever pose a threat to a real-time and regulated search engine such as the MLS. For proof of this one need go no further than Zillow.com/advice and read the countless user complaints that clog up an otherwise very user-friendly blog site. While sifting through the user complaints for viable blog topics to participate in, I am amazed how user after user, time and time again, can have the same complaints without being addressed by the powers that be at Zillow. I have no desire to make this a Zillow roast, and hope that I have not come across that way. Any attempt to bring more users to the internet is a job well done and for that Zillow has my kudos. Other sites such as Trulia and their blog site “voices” also do an excellent job. However Trulia has it’s bugs as well. Also while it is true that Realtor.com offers slightly out of date listings the fact that they pull their data directly from the MLS gives them a leg up on sights with data that that is largely unregulated. I highly recommend using sights such as Zillow and Trulia as a reference only for people dipping their toe in the market. When it is time to get serious there is no better course of action for a buyer or seller to take than to engage an agent that is experienced in the type of transaction they are seeking. It also helps greatly if that agent works with a broker that understands the power of web marketing and the tools to use that understanding to effectively exceed their expectations.

  4. Jon Kolsky Says:

    Today zillow still fools the public, zillow lacks transparency, and lets their top contributors do unethical things inside zillow..Stay away from zillow.

Trackbacks/Pingbacks

  1. Home Valuation – Who, What, and How | The Chicago 77 - June 29, 2010

    […] before the crash. During the conversation, the banker did a “valuation” of the home using a very popular consumer-friendly website, and determined that the home had lost $250,000, or roughly 43% of the 2004 purchase price. While […]