Zillow (RE agent, agent, price, attorney)

[HDL]

Zillow is great for all kinds of reasons. Sometimes the 'zeestimates' are good and other times not, but that is not the main reason I use it.

1) COMPS - recent solds and past sales
Where else can you easily get this info without dealing with a lot of nonsense???

2) Overhead aerials and BirdEye views
Sure there are other places for this, but combine it with #1 and !!!

3) Homes for sale by map view
Again my friends, all at the same site with no nonsense .

4) Move Me Move
Okay, there are times when I see a house and I wish it was for sale. I like the idea of this feature and told my dad that we should put his home on the site at $2M and see if he gets any offers and if he does, take the money and run!

For those that don't like Zillow, oh well . Don't use it . There are plenty of us that find it helpful.

p.s.
I don't work for Zillow, but if they want to hire me for BIG BUCKS, I am ready and willing!!!!

[ntfeldman]

Zillow. It's a wonderful tool and really cool to play with and free.

But it's only been out a short period of time and friends colleagues I hope I'm wrong but personally I feel like it's the hand writing on the wall for our industry.

Welcome to my prognostication about our industry...

People have been buying and selling their own homes by owner for as long as there's been real estate, heck, Realtors are a relatively new concept. We provide other values to a transaction that zillow can't offer - pricing is just one lowly component of the services albeit a rather important one. I just fear it's presence will change our industry eventually. Here's why...

And as far as their capability in that area: pricing/valuations - Zillow takes tax assessors values which thank god are low because at any given time only 4% of the market is moving/selling so they data is and will remain late and wrong)

But let's say we offer in our bundle of services:

Pricing
Marketing/Advertising
A specialized intellectual property like MLS
Showing services
Staging/Consulting
Contract Paperwork
Buyer qualification
Upsell
Negotiations
Therapy (don't underestimate this one!)
Transaction Processing/Management
Centralized Vendor Communication

Am I missing anything else??? Jump in here.

Here's my prognostication - our industry is going to die slowing, our services are going to aggregate at the higher end and lower end of the market (2x median home value in your area and up and the bottom 10% of the market) and we may become by the hour fee based professionals (oh how I would love to charge for my time that's wasted!!!)

Why?

It's about "Make Me Move". That little flag a property gets on Zillow set by the seller... let me explain my thoughts...

Let's go back to the list above and pick apart our value add. For a home sold at median home price in FL where I am - we'll use $200K and some number say 5.5% for Realtor fees. That's $11,000 a homeowner would gladly get out of if they could. Fortunately for us, many don't see the point of trying to do it all themselves in the end. That's why greater than 80% of homes are sold through our professional services. And I for one am grateful and feel I provide very good service to my clients, they do keep coming back. But let's go over what alternatives a seller has to using us and paying this fee vs. EASILY and that's the operative word here-EASILY replacing what we offer for a lower fee and yet accomplishing the SAME result.

Consider our value add and the seller's/buyer's new alternatives:

Pricing - Pricing can be acquired today for free by a seller who interviews three agents and they can get within 5% of pretty darn close by looking to the values of what's selling. If you charged separately on an hourly basis, what would you charge to produce a CMA? Start thinking about it, it's a question you may soon have to answer (p.s.: less than a certified appraiser would charge a buyer to get an appraisal for a loan - let's say $450 on an ordinary house -the buyer can purchase this from the seller at the time of loan arrangements too (of course it has to be updated but the costs can be passed on - value now $0)

Marketing/Advertising - Cost of color flyer's? Cost of a couple of marketing ads? Post it for 6 mos on BuyOwner? Yeah, they'll spend $1500 to do that. But "Make Me Move" puts any seller in front of the large group of people that is growing every day as they go to Zillow and look around - and it's free. If Zillow merges with a larger web group (like Yahoo Real Estate, Lending Tree or MSN) then it will either make things better or worse for us. But Make Me Move is the great FSBO ebay in the sky with blind emails direct to sellers - who will now control the direct buyer dialog. Ok, they always controlled the direct buyer dialog - Who was to prevent a buyer from knocking on the front door of a seller and asking, how much for the house? No one. The difference is, buyer's can now knock on dozens of homes from the comfort of their desk top in their Jammie's and take very little comparative time to do it... Could they do this on BuyOwner and Craig's List... yes, yes, yes. Let's hope there are dozens of other sites that pop up just like Zillow. It's the inefficiencies in the market that give us strength. Zillow is efficient. It's not heavily used yet but it's efficient and it's free. We are not free.

A specialized intellectual property like MLS - This is our most powerful business tool and remains so. You should gladly welcome every imaginable do-it-yourself-copy-cat on the market because their introduction into the pool of search options for consumers makes the market exceptionally inefficient for everyone else and keeps the MLS highly efficient for us - Realtors. For as long as NAR controls this, we're gold - pay your dues, contribute to PAC and personally so you know I have a love/hate relationship with NAR. Our Value add on this one is high.

Showing services - poor FSBO that sits in their home every weekend trying to find a buyer that's non-agent driven to their property. Oh you know they are out there. But they have to spend to advertise and wait and home without us. Not any more... Make Me Move now frees this seller up to schedule appointments with buyers on their time, request qualifying information and security issues cleared upfront. Direct. No agent necessary. It's not working now because there's not enough traffic. Eventually it could be a problem. Our value now, high, eventually Low.

Staging/Consulting - Beautiful homes sell. Dogs sell too. Dogs just take longer to sell and at lower prices. It's a nice service we offer, it can make a seller more money in a stable or good market. It doesn't do too much to suggest putting in $40K in renovations when there's a ton of property on the market and the client is over leveraged in their home. You can't really learn this on HDTV but I also don't think it keeps a home from selling - it does affect price and time. I'll give us moderate value here but they could hire a consultant to do this for $1000 for a $200K home for 6 mos of staging and there you have it, if you need it.

Upsell - understanding the buyer's needs and speaking to the buyer's needs is believe it or not a service that most sellers don't understand. They love their home and they extol the virtues of their home to every buyer without regard to the buyer's interests. They can't help it. It's "pride of ownership". It's also in some cases a death sentence. They don't know how to speak to their buyers because they have house-myopia They only see their house and they only see their love. Everyone loves their children too... WE actually do have a leg up here but we all know we're not going to sell someone a house they don't want. We can perhaps help them see something they didn't see but we can't turn a sows ear into a silk purse... unless it's going to be the hard corner of a major intersection and then they're good. This is another area where we ad considerable value but it's hard to put a dollar value on.

Contract Paperwork - any attorney can do this and offer legal advise for hundreds or low thousands of dollars. They won't show your home and market it for you but they're good with contracts.

Buyer qualification - Lender's gladly qualify buyers. Most sellers for some gosh darn reason don't do this to all buyers before they negotiate their own deals but it's free and easy to do. Our value is easily replaced here

Negotiations - This is a high value add area for us as Realtors. Those of us experienced in the industry know based on the market how to advise our side of the transaction to keep things from blowing up but still get a reasonable deal to the closing table. An attorney can do this too but they are naturally programmed to see the things that can go wrong and they focus on those too much. I'm not talking about disclosure issues here I'm talking about a lawyer's general propensity to take minor but real risks and make them into negatives rather than the reasonable scenario we deal with every day.

Therapist (don't underestimate this one!) - no else one wants this part of the job, we gladly take and don't charge by the hour. This is our skill that may actually save our industry. High value here and hard to replace. Even a therapist can't help a homeowner with real estate advice and lawyers charge by the hour for this. It may be the fundamental reason some buyers/seller's won't go it alone.

Transaction Processing/Management - This is all being automated. The attorney's can edit a legal doc and push "send" just as well as we can. So can title companies for a nominal fee of a couple hundred dollars. Our value add here is very low.

Centralized Vendor Communication - Right now there's not anyone that handles this for a fee other than us. But the value for the service is low. A transaction processing service could offer this much like the group in the NW that's a $3,000 fixed fee service. They basically offer negotiations, contracts, vendor communications and pricing assistance for their fee.


So recap:

Pricing - Low value
Marketing/Advertising - Moderate Value but largely reimbursed
A specialized intellectual property like MLS - High value for now
Showing services - Low value
Staging/Consulting - Low value
Contract Paperwork - Low value
Buyer qualification - Low Value
Upsell - Moderate Value
Negotiations - High Value
Therapy (don't underestimate this one!) - High Value
Transaction Processing/Management - Low Value
Centralized Vendor Communication - Low Value

Buyer's can now find a seller direct without us and pre-qualify and establish value... do you see where I'm going with this.

Now I'm not a self hating Realtor, I love what I do and I don't think we're over paid and I feel like there are a lot of incompetent people in our industry bringing down the trade with botched transactions. But at the end of the day, if people can do for themselves for less what we can do... why do they need us?

Well the high end of the market doesn't want to be bothered with what we do. Their time is too valuable and they don't want to recreate the wheel. They know how to leverage their time and we're their solution and they will hire attorney's too.

The low end of the market is there for a reason and usually lacks direction and resources.

But has anyone ever looked at a bell curve before? The business is all in the middle.

We survive by adding value. Create value or expect to starve.

[Happee]

Originally Posted by SouthFloridaNative

Do any of you use or like Zillow - Real Estate Valuations, Homes for Sale, Free Real Estate Information I noticed only 1 of the local realtors here had been using zillow to advertise. When we put our house FSBO zillow was one of the sites we used. We emailed it to the local realtors to let them know (like they care) our house was on it for sale and now I see they are ALL using zillow! Ha ha! I couldn't believe it. We should at least get a "thank you" for that.

We posted our house for sale on Zillow too, I've had a couple of inquiries coming from there one from a Realtor looking to list the home for me and one from an investor wanting to buy the home at a huge "discount". The zestimate was way off for us though... but I like the tools they have for FSBO.

[Gretchen B]

Originally Posted by HDL

Zillow is great for all kinds of reasons. Sometimes the 'zeestimates' are good and other times not, but that is not the main reason I use it.

1) COMPS - recent solds and past sales
Where else can you easily get this info without dealing with a lot of nonsense???

2) Overhead aerials and BirdEye views
Sure there are other places for this, but combine it with #1 and !!!

3) Homes for sale by map view
Again my friends, all at the same site with no nonsense .

4) Move Me Move
Okay, there are times when I see a house and I wish it was for sale. I like the idea of this feature and told my dad that we should put his home on the site at $2M and see if he gets any offers and if he does, take the money and run!
For those that don't like Zillow, oh well . Don't use it . There are plenty of us that find it helpful.

p.s.
I don't work for Zillow, but if they want to hire me for BIG BUCKS, I am ready and willing!!!!

So, how does a potential homebuyer looking on Zillow know whether he's looking at somebody's fishing expedition or a reasonably priced home? Especially since it's been noted that the zestimates on Zillow are not very accurate most of the time.

I've got an open mind, though. Anybody actually BUY or SELL a home off Zillow? I know it's fun, and can be a useful tool depending on what you're wanting to do, but does it really WORK to sell a home. If so, how did everybody do? Did the seller feel he got top dollar? Did the buyer feel he got a steal of a deal?

I hate to jump on the bandwagon, or throw eggs at it for that matter, until there's been some real life experiences that prove it's worth. Right now it's garnering lots of advertising dollars, I'm sure. But I'm reserving judgment on its practical value for a while. As my mama always used to say, "The proof is in the pudding."

[birdrgal]

Well the high end of the market doesn't want to be bothered with what we do. Their time is too valuable and they don't want to recreate the wheel. They know how to leverage their time and we're their solution and they will hire attorney's too.

I agree with you and there's also another reason why the high end of the market will always use a realtor.

High-end sellers aren't going to want their home FSBO or on Zillow's Make Me Move because they don't want any Tom, Dick or Harry WhoKnowsWho off the street ringing their doorbell or calling their cellphone or cluttering up their Inbox. Many times there won't even be a realtor's sign in front of the house, for just that reason. They want serious potential buyers, not just looky-loo's. They want a paper trail of who is brought (by licensed realtors) to see their house. They know that "Prequalified" is useless. "Preapproved" is what's required. Around here, people don't even get taken through the door for a showing of a high-end home without being pre-APPROVED for the price range they're looking at.

[Northwoods Voyager]

ntfeldman...I'm not sure that I want to say it, but thank you. You have really more than 'hit the nail on the head' with your commentary. For 20 years I have had my broker/sales license. However due to certain conditions I had to 'work' only part-time for a couple of years. Sadly, It appears that during this time so many changes had occurred. All of the web sites that did not exist when I first became a realtor has certainly had a drastic effect on the way we do our job.

I have only recently became aware of this web site and forum and should not have been surprised at the negative connotation that the selling and buying public has for this profession. Why do they need us? Mostly because of what you have so finely stated: Negotiations and Therapy (therapy for us, also )

But I will continue to do this as I do enjoy and like what we do. Thanks again for what you have written here. Should be an eye-opener for not only us that have been in this business for a few years but esp. for the newbies.

[HDL]

Are you asking about buying a home from the MAKE ME MOVE or just the regular MLS listings we can also see (not all MLS, but only whatever homes agents have decided to list on Zillow)?

Of course, any intelligent potential Buyer would see the MAKE ME MOVE home and realize that the owner MIGHT be interested in selling and proceed from there. I won't bore you with all the ways I 'value' a home for sale, but let's just say I seldom need an agent and realize the MAKE ME MOVE price is only for fun and not necessarily a starting point for negotiations .

I haven't bought a home this way yet because unfortunately I listened to the agents in my area who said homes might not appreciate as much as 2005/2006, but that they wouldn't go down and that buyers would keep on coming . Needless to say, all their predictions have been wrong thus far....

Originally Posted by Gretchen B

So, how does a potential homebuyer looking on Zillow know whether he's looking at somebody's fishing expedition or a reasonably priced home? Especially since it's been noted that the zestimates on Zillow are not very accurate most of the time.

I've got an open mind, though. Anybody actually BUY or SELL a home off Zillow? I know it's fun, and can be a useful tool depending on what you're wanting to do, but does it really WORK to sell a home. If so, how did everybody do? Did the seller feel he got top dollar? Did the buyer feel he got a steal of a deal?

I hate to jump on the bandwagon, or throw eggs at it for that matter, until there's been some real life experiences that prove it's worth. Right now it's garnering lots of advertising dollars, I'm sure. But I'm reserving judgment on its practical value for a while. As my mama always used to say, "The proof is in the pudding."

[Gretchen B]

Originally Posted by HDL

Are you asking about buying a home from the MAKE ME MOVE or just the regular MLS listings we can also see (not all MLS, but only whatever homes agents have decided to list on Zillow)?

Of course, any intelligent potential Buyer would see the MAKE ME MOVE home and realize that the owner MIGHT be interested in selling and proceed from there. I won't bore you with all the ways I 'value' a home for sale, but let's just say I seldom need an agent and realize the MAKE ME MOVE price is only for fun and not necessarily a starting point for negotiations .

I haven't bought a home this way yet because unfortunately I listened to the agents in my area who said homes might not appreciate as much as 2005/2006, but that they wouldn't go down and that buyers would keep on coming . Needless to say, all their predictions have been wrong thus far....

HDL, you sound like a very saavy homebuyer, who studies the market and knows the market. Sorry the gut feelings of the real estate agents didn't pan out. I do think this downturn has shocked a lot of people, even the experts (I'm talking economists, not realtors). If only we could know for sure what the housing market or stock market or any other investment would be 2 years from now, we'd all be very wealthy. A lot of realtors got burned on their own investments during this past couple of years, too.

To answer your question, I guess I was wondering about a homebuyer relocating from another area. Even the MLS has a wide variety of home prices, everything from "steal of a deal" (those still sell rather quickly) to "what was the agent/seller thinking when they priced this listing". There's an even wider price range with FSBO's. Some of it is "testing the waters" and some of it is lack of expertise. A home is always going to be more valuable in the eyes of a seller than it is in the eyes of a buyer. So I was wondering how Ordinary Homebuyer, relocating with only a few weeks to find a house in a new area, can know that the home he's found on any website, be it Zillow or Realtor.com or any other site, is really priced competitively. With time and research, a person such as yourself can come close, but sometimes there are certain other factors, such as a proposed commercial development next door or certain issues with utilities in that neighborhood, etc. The buyer, especially an out-of-town buyer, isn't always aware of such things.

As with many things, it sounds like Zillow is filling a niche for certain buyers and sellers. I'm not anti-Zillow - I really don't know enough about the new features to form an opinion. I personally don't buy into the "one size fits all" mentality that some realtors have (i.e. everybody should use a full service realtor). Choice is good for consumers. And consumers like to have a choice when buying or selling real estate. I like to use the example of preparing a tax return. Some people are comfortable doing it themselves. Some people are content with the "discount" tax preparers. Still others see real value in using a CPA, and feel it's money well spent and actually saves them money. How much the others save depends on their level of expertise. If they know what they're doing, they've saved a bundle. If they only think they know what they're doing but really don't, they could be giving away $$$ and not even know it.

I'm not familiar with some of the newer features on Zillow. I tried the price estimator a few times and found it so far off so as to be useless, (plus I have other reliable sources for that type of info), but it sounds like there's a lot of new and exciting features now. I was just wondering if they really deliver. I was hoping maybe somebody had actually found practical benefit when buying or selling a home and could pass along their personal experience.

[ntfeldman]

Gretchen B. Zillows values are way off for now. But it's also a new service. It won't be forever. As it evolves and begins working with the taxing authorities to improve the data collected county by county - and owners go in and correct their records, it will radically improve - fast forward 5 years. It's going to get more accurate.

Birdrgrl and Northwoods Voyager, I concur with both of you. I personally handle luxury and commercial real estate - I am a founding guild member of the Luxury Institute in Dallas. My luxury clients are never going to go it alone. They understand the value of expertise and want to be protected from "the public". But as the market thins a couple of things will happen.

Those agents who don't feel comfortable handling these clients or can't gain their confidence will eventually have less business to "feed" off of and may leave the business. Those who are comfortable with this clientèle will move into this niche with a vengeance - supply and demand will kick in - and these are the savviest of clients - they will negotiate price down to get the services they need.

The one thing that I feel strongly won't ever change - is the fact that very very very very few people will consider buying a home sight unseen. Especially if it's going to be their primary home. And unlike so many other products sold on the internet - each of our products is genuinely unique. Even two homes side by side, same builder, same floor plan have different characteristics to them. People want to see that. Not just pull it up on line and "buy it" Anyone moving in from outside of the area or across the country isn't going to buy "by owner" there's just too much risk.

So we have that going for us. Our products are unique, our services are regional and they do have value. And we have some time. These are critical components to our survival. The one aspect that is a challenge but the computer and the internet have the ability to address is that once built, improvements don't change that radically. Homes of 40, 50, 60 years of age are not that uncommon in most cities in America. In areas where incorporated cities are older, there's much older housing stock. Sure, it might have an updated kitchen, it may be painted a new color, get an added wing or second floor... ever drive by the house you grew up in? It's probably pretty different now - if it's still even there! But computers can store and record immense information and it just doesn't change that radically. Most of the photos on Google Earth are a few years old. In some areas that matters a lot - if it was previously pasture and now it's 300 homes. But if it's Manhattan, well, block for block, not much changes there decade to decade. Sure the tenant mix, but not too much to the outside of the building.

The internet can chronicle all properties at some point. Eventually a one time photo log of the property - video even - is possible for all properties.

It's going to be a different world in a few years. I think we can react or pro-act. I'm not sure I have the solutions... but I'm certainly trying to push the concepts to their extreme situations to see how it might affect the way we work and deliver service and get paid for what we do... I don't think the changes will be bad... I don't think empowering the consumer is negative for us... I just think we really have to think through what we have to offer, how we charge for it and what the business model will be in the future.

Personally I'd be ok with a per-hour fee arrangement with a not to exceed clause to cap the fees. Consumers might be game for this too as they can only win a lower fee if their property sells faster and never pay more than some percentage cap they today would already agree to... Co-brokerage fees could also be offered similarly but then how do you charge buyers for the homes you show them but they don't buy?

Maybe a showing fee that the seller pays to buyer agents who show homes ... ? How much per showing??? I don't know, have no idea actually. If you show a home - travel time, trip planning, appointment setting, buyer interviews - actual time in the home and info about the neighborhood - let's say our time is worth between $125 and $225/hour... I would think we can reasonably show 1-2 homes per hour so I would think between $100 and $185/ showing. This would certainly incentives agents to show more homes and to register their showings with the listing agents and give feed back. It might also instill a Buyer's qualification step that many new agents don't put their buyers through - even though it's a critical step! It would certainly provide sellers with more feedback if their homes are getting shown and a shown home is (eventually) a sold home (assuming the buyer's are legitimately qualified)

Include these showing fees in the not to exceed percentage of the co-brokerage and the balance in the transaction processing fee... Buyer's agents would earn less per transaction on a percentage basis for the specific transaction (showings would wear down the available co-op percentage) but we'd be paid for every showing we go out on... I like that.

Seller's might get a little antsy paying as they go - they might demand more immediate results but it's kind of like using an attorney I guess - you can call them any time you want and they will take your call - but the meter's running! In the end if they know they don't pay more than they would on a percentage basis and they only pay for qualified showings what should the matter be? We're working, they're paying...

If a seller decides they don't like their agent, at least the agent's been paid something for their time to show the property and market. It's no where near the amount the agent would earn if they had been successful but at least it's not a total wash for the agent. The seller might even be able to deduct from a second (new) listing what they had paid the prior agent from the over all fees.

Just thinking out-loud... The more I think about this the more I kind of like it...

Any thoughts from the gallery?

[KMCopeland]

Originally Posted by SouthFloridaNative

Do any of you use or like Zillow - Real Estate Valuations, Homes for Sale, Free Real Estate Information I noticed only 1 of the local realtors here had been using zillow to advertise. When we put our house FSBO zillow was one of the sites we used. We emailed it to the local realtors to let them know (like they care) our house was on it for sale and now I see they are ALL using zillow! Ha ha! I couldn't believe it. We should at least get a "thank you" for that.

Zillow is notorious for having outdated deed information. I've looked at it. I liked the Google Earth feature. It's one of many sites that are capitalizing on people's mistrust of realtors, and a pretty normal need to feel in control. I think it's a woefully inadequate way to sell property, although it's a good tool for finding it.