The exploding real estate industry
Cory Bergman November 4th, 2006
Two Seattle websites are at the forefront of dramatic change in the real estate industry. The first is Redfin, and the site’s basic premise is that the internet has reduced the need for realtors to connect buyers with sellers, and as a result, you should only pay a fraction of the commission. And the second is Zillow, which uses historical MLS and tax record data to come with with “zestimates” of a home’s value. And the backlash has begun. For Redfin, some realtors are refusing to sell homes to buyers who are using Redfin. And Zillow has been hit with a complaint filed with the FTC that alleges the site is knowingly deceiving the public by presenting its estimates as accurate (despite the fact that Zillow makes it clear on the site that its estimates are just starting points for professional valuations.) As information becomes democratized through technology, such opposition is a natural by-product of traditionalists protecting their turf. In my humble opinion, the industry is ripe for change.
8 Comments Add your own
1. thedetroitchannel | November 4th, 2006 at 11:23 am
this combined with a $4 million ad campaign soon to be launched by the NAR is just the beginning.
“it’s a great time to buy or sell a home” is the tag line (i think)…the problem for the NAR is that both buyer and seller realize the 6 or 7% take is just too high.
2. Jay Thompson | November 4th, 2006 at 1:27 pm
A lot of Realtors fear Zillow (why is beyond me) and welcome this claim. But the fact is, the complaint filed by the NCRC is just plain ridiculous. Anyone with just a modicum of intelligence should realize that no piece of software is going to provide a 100% accurate home valuation.
3. Safran | November 4th, 2006 at 1:47 pm
Hell, if the official town assessors can’t get it right, why go after a website?
4. No One | November 5th, 2006 at 3:26 am
Zillow is kinda amusing though if inaccurate at times - the studios of one station in Spokane are evidently worth *only* half a mil.
5. MR. Condo | November 5th, 2006 at 10:36 am
We run a website showcasing condos fro 20 cities and 40 countries.
Tools like Zillows are the key to providing fresh, relevant data which will entice buyers to use your page as a resource.
6. Joel Burslem | November 6th, 2006 at 10:36 am
Realtors complain about Redfin because they feel the company shifts too much of the work onto the listing agent. The reality is they are afraid that the company’s aggressive discount business model is slowly dismantling the traditional commission structure.
As for Zillow’s troubles, it’s pretty simple really. The complainant (the NCRC) sees Zillow’s $57 million in VC funding and greedily wants a piece of the pie.
They level the charge that Zillow’s Zestimates put low income and minority home owners at a disadvantage (because they undervalue their homes). Zillow, fearing the negative PR of being called “racist”, settles quietly for a tidy lump sum so the whole thing can go away.
7. Trevor Smith | November 10th, 2006 at 9:19 pm
I’m a Seattle Real Estate Agent who is very supportive of Redfin and Zillow; however you’re right, they have caused alot of controversy. Redfin, who asks their buyers to schedule home showings with the listings agents, has experienced a backlash from traditional brokers. Some listing agents are even cutting the buyers agent commission to agents who aren’t present for showings. This practice is a clear backlash at Redfin’s practices.
As for Zillow, I always take their Zestimates with a grain of salt - although they are definitely good for a ball park figure.
8. lucy | January 19th, 2008 at 5:04 am
Wow, thanks for the excellent information!
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