2 Web Sites Push Further Into Services Real Estate Agents Offer

NYT ^ | Feb. 8, 2006 | DAMON DARLIN

[summer]

Two real estate Web sites are starting to offer services that could change the way real estate is bought and sold online.

One site, Zillow.com, which will be introduced today, will help consumers obtain more accurate real estate sales information — to the consternation of some real estate agents.

A smaller site, Redfin.com, introduced an unusual new service last week that might be even more disruptive to the real estate industry: the feature automates the process of bidding on a house online.

Zillow is attracting a lot of attention because it obtained $32 million in venture capital financing and its chief executive, Rich Barton, was a creator of Expedia, the online travel agency.

The new site [Zillon] provides data like previous sales prices and the prices of similar properties on 60 million residential properties, information that real estate agents do not display in the public multiple listing service. The site also includes price appreciation (or depreciation) data in a form that resembles stock charts...

Many real estate agents worry that Zillow could be a first step in an online evolution that could threaten their $60 billion commission-based business, just as Expedia, Travelocity and other online sites disrupted the business of travel agents...

All of these real estate sites are chipping away at the agent's business of matching clients with a property and then negotiating a deal. The Web is already displacing the initial contact that agents have with customers. A recent National Association of Realtors survey found that 77 percent of home buyers use the Internet to search for a home. About 24 percent said they first learned of a home from the Internet, up from 15 percent in a 2004 survey...

[summer]

Many real estate agents worry that Zillow could be a first step in an online evolution that could threaten their $60 billion commission-based business, just as Expedia, Travelocity and other online sites disrupted the business of travel agents...

It's just fascinating to see how the internet keeps changing business models. Consumers have more and more power, but to use that power, they have to be online, and be willing to learn more.

[saveliberty]

Zillow requires flash which isn't great for pcs. It's probably fine for Macs

[summer]

I just tried to go on the Zillon site and got a screen that says they are not yet supporting the Safari browser! I thought that was weird.

[summer]

BTW, Redfin.com seems to be located in Seattle, WA.

[saveliberty]

That is weird.

Flash carries a lot of risk of viruses to pc. Perhaps Safari has better security than IE and thus is not compatible?

[saveliberty]

Seattle -- blue skies and good coffee. ;-)

[FreePaul]

I've only had to deal directly with four real estate agents. Two were completely dishonest and cost me unnecessary time and money. The other two were top notch straightforward in all respects. So, I guess that averages out to OK in the real estate field. For good reason there are changes coming about in real estate selling as well as changes in other businesses.

[hc87]

There is a scary amount of information available on Zillow. I would be curious as to whether others think their home valuation numbers are valid. The number that they had for my house was about 10-12% over the number that a local real estate broker gave me last summer.

[Drango]

Travel agents have taken a major hit. Real estate agents need to evolve too.

[Vision]

I did a comp on Zillow and it was off $50,000. Those good for nothing real estate agents just don't do anything /rolling eyes

[Drango]

The info I see on zillow is 15% bellow what the house next door sold for 6 months ago.

[Ramcat]

The numbers they have for my area (rural SW PA) are way off. My property is in the wrong location as are the streets on their maps.
I consider this a good thing for now.

[Quick Shot]

My feeling was that it was overpricing my house. Then I went to the comparative houses in the area, and it was right on based on the sales price. Interesting living in an area that is having a 50% per year increase the numbers are 4 times what I paid for it 15 years ago.

[Prince Charles]

Use Firefox to view the site until Safari support is added.

[Shannon]

I think a better site is www.domania.com
The values seem too high on zillow.

[montag813]

The problem with Zillow is accuracy. A condo in my (NYC) building sold last week for $123,000 more than its "zEstimate" on Zillow. So clearly they are understimating the market by a large degree. If so it does a disservice to sellers.

[tubebender]

Bump

[babyface00]

I'm in the industry, although not a realtor.

One of the problems I see with taking brokers and agents out of the equation is that the likely replacement is going to be lawyers.

Buying a house is a huge investment. Sure, if the buyer and seller are both honest, its a relatively simple transaction and everyone comes out happy in the end. However, anyone who's been on ebay knows that this isn't always the case.

Inserting brokers and agents into the transaction doesn't necessarily fix all the potential problems, but it does address a lot of them. Where agents and brokers are "overpaid" is when the home being sold is very desirable, and the buyer is knowledgeable and either prequalified or has cash. The reality, however, is that just about every home for sale has problems and quirks and most buyers either don't understand financing, or have problems getting it, or have never gone through a transaction of this magnitude before. Could be, also, that the buyer is moving into an unfamiliar area and needs the expertise of someone who knows the neighborhoods to guide their purchase.

In those cases, the brokers and agents work very hard and when you consider the probable alternative - getting lawyers involved instead (which I understand is already part of the process in many states), their commission doesn't sound all that extravagant.

I'm no fan of realtors, and they certainly shouldn't be mandated, but I'm not sure that this alternative is better for buyers and sellers. I guess a lot would depend on the way the site is structured.

Beyond that, I'm not sure how legal this site would be in all states. I'm not a lawyer either, but if this is just another FSBO site, those haven't been very effective yet, largely because of the problems above.

[TXBSAFH]

Zillow is dead off prices on my street. A house 4 doors down from me is appraised a t 112K, it sold last month for 126K.