A Real Estate Discussion Blog

In a few hours I am heading to Seattle to visit the Motherland, the Zillow headquarters.  It can get a little lonely working from my home in Chicago all the time, so it is great to get reconnected with all my Zillowite co-workers whenever I can.  Also, while I am out there, I try to drink a month's worth (time since my last home office visit) of the free soda the home office employees get to enjoy every day.  So I don't know how much mingling I actually do, since a lot of my time is spent in the bathroom....  

Actually, the purpose of this trip has more to do with getting the national sales team together to meet the new VP of Advertising Sales, Greg Schwartz.  Greg has a strong advertising background having previous worked at Doubleclick, Yahoo, and most recently CNNMoney.com.  

While we are excited to meet him and hear his strategy for hitting our revenue goals, I think it is important to note what this hiring says to the real estate community. 

One of the first questions I always get from people is, how do you make money?  Fair enough.  And this question has an easy answer, by selling advertising on the site.  But many times I sense (and read about) skepticism when I give this response.  In the back of the Realtor's mind I can see the questions forming- how soon until you start charging for leads or when are you going to get involved with the transaction.  And I can appreciate how these thoughts are started.  One minute you are paying RealEstate.com for leads, and the next minute they announce that they are opening a brick-and-mortar brokerage and will be competing against you. 

Zillow has also been very forthright about saying that we have no desire to get involved with the transaction or in the lead generation for real estate agents.  That we are a media site.  Hopefully the hiring of this high-ranking position solidifies this position for the skeptics out there.  We are fully committed to continuing to offer free marketing tools to agents, and how we are able to do this is through the advertising you see on the site. 

So, I look forward to meeting Greg this week and I wish him all the best.  Because the more successful he and his team are, the more money we will have to continue paying brilliant programmers that are creating innovative and free tools for the real estate professional to use to market themselves and their listings. 

So with my 1 quart clear plastic bag holding all my less-than-3 oz liquids in one hand and the latest issue of USWeekly in the other (it can't always be all about real estate) I start the trek to the Motherland. 

As a Zillow employee, I am not going to comment on this.  But it would be interesting to hear other's reactions. 

http://www.inman.com/hstory.aspx?ID=62591

Trulia, Zillow shown the door at Prudential Real Estate convention

Internet leaders turned away after showing up to exhibit in San Diego

Thursday, March 22, 2007

By Matt Carter
Inman News

To the dismay of some of the company's brokers, Prudential Real Estate apparently barred two of the biggest names in online real estate -- Trulia and Zillow -- from exhibiting at the company's annual convention in San Diego this week.

Both companies had booked booths at the show and flew executives to Southern California to rub elbows with Prudential brokers, only to be told at the last minute they were not welcome.

Trulia co-founder Sami Inkinen said that 20 minutes before the company's exhibit booth was scheduled to open, Russell Capper -- president of Prudential's e-commerce subsidiary, Prudential Real Estate Services Co. -- told the company to "pack up and leave immediately."

Writing on his company's blog, Inkinen said Trulia was told the company's business model is in direct competition with a partnership between Prudential Real Estate Affiliates and Yahoo! Inc.

Yahoo! and Prudential in 2004 reached an exclusive agreement through which Prudential brokers supply property listings for display at the Yahoo! Real Estate site.

Prudential brokers familiar with the agreement said they pay a referral fee when leads generated through the agreement with Yahoo! lead to a sale. Trulia and Zillow invite brokers to feed listings to their sites and do not charge referral fees.

Capper, the founder of eRealty Inc., a real estate technology company that Prudential acquired for its technology in 2004, did not respond to requests for comment from Inman News. Sheila Bridgeforth, vice president of global communications for Prudential Financial Inc., did not return a phone call, but provided a one-sentence statement via e-mail.

"Prudential Real Estate is committed to the needs of its affiliates and to providing them with the highest level of service and support," the statement said.

Prudential brokers who spoke to Inman News, however, said the company seemed to be acting in its own best interests, not those of its franchisees.

Ed Krafchow, president of Prudential California/Nevada/Texas Realty, said Trulia and Zillow are "good business partners, and I'm not going to stop using them."

Krafchow's company sends listings to Trulia under a partnership made in 2006. Trulia also indexes listings supplied by a number of prominent Prudential brokers from around the country, including Prudential Florida WCI Realty, Devon, Penn.-based Prudential Fox & Roach, Prudential New Jersey Properties, Prudential Preferred Properties in Chicago, Prudential Arizona Properties, and Prudential Gary Greene Realtors of Houston. Each of those companies has provided testimonials lauding their partnerships on Trulia's Web site.

Krafchow said he took Zillow executive Ben Clark out to dinner in San Diego because "I'm always uncomfortable when someone is invited to a party, and then they are turned away."

Krafchow said he'd also recently met with Michael Yang and his team at Yahoo! Real Estate.

"My job as the owner of a company is to develop as many resources for my agents as I can get," he said. "That's my job, and I don't want a franchiser interfering with that job."

Krafchow questioned the wisdom of the decision to bar Trulia and Zillow from the convention "because these are things that should be tools for brokers; they help develop knowledge in the broker community" on how to make the best use of the Internet.

Rory Siems, a Prudential California Realtor in Orange County, said he sees Yahoo! as a better resource for sellers, while Trulia offers more tools to buyers.

"The worst thing would be for Prudential to say we don't want brokers to have a relationship with Trulia," Siems said. "I like having both."

Siems said Prudential Real Estate may view Yahoo as an affiliate. "Prudential guards their affiliates because it's the only way they can make money," he said. "There's nothing wrong with it ... but I think choice just makes the whole thing better."

In his blog post, Trulia's Inkinen said that despite being barred from exhibiting at the convention, the company was still able to meet with dozens of Prudential brokers in San Diego.

There were "no hard feelings" over being shown the door at the conference, Inkinen said. "Russ wasn't aware we were coming. Business is business."

Kelly Roark, Trulia's vice president of industry development, confirmed that Inkinen authored the account of events in San Diego on the company's blog, but would not comment further.

Roark said Trulia refers 2 million visitors to external listing sites each month, and does not charge referral fees or redirect listing traffic to anyone other than listing brokers or agents. A basic service that directs traffic to listing agents and brokers is free, although optional paid advertising is available.

Zillow spokeswoman Amy Bohutinsky portrayed the company's absence at the Prudential convention as the result of a mutual decision made after consultation with the event's organizers.

"We did have plans to exhibit at the Prudential show," Bohutinsky said in an e-mail. "However, after a conversation with conference management, we both decided the time was not right for us to participate. Perhaps next year."

Bohutinsky said Zillow draws 4 million visitors a month, and that agents can place an unlimited number of listings on the site for free. They also have the option of purchasing advertising.

First of all, what is a Zestimate?  

A Zestimate is an estimated market value of a home on Zillow.com.  We have calculated Zestimates on every house back in history as far as we could get data.  Additionally, we let people refine their Zestimate via a tool called My Estimator, where they can factor things not reflected in our data, like a recent kitchen remodel or deck addition.  Homeowners can keep this information private, or publish it on the site for others to see.

How is this Zestimate number determined?

Our team of statisticians developed a proprietary algorithm designed to estimate the current value of a home. In short, it starts with data about the physical characteristics - number of bedrooms, baths, sq. footage, lot size- of all the homes in an area, obtained from public records.  We then look at the relationship between these physical characteristics and the sale prices of home in that area over time and right now.  We use these relationships to estimate the current value of an individual home.  

Zillow is constantly working feverishly to fill in data holes and add more information.  In the areas where we have data, all of it comes directly from county records.  We work with a number of third-party data providers nationwide to help us obtain all the relevant current and historic public data from various government agencies around the country.  We then combine that data into our master database, from which we use our proprietary process to derive a home's Zestimate. 

How accurate is Zillow?

Zillow is designed as a research tool - a first step to determine a home's value or a starting point when researching a particular home.  Ultimately, a home's sale price is determined by the buyer and seller. 

Nationwide, our median margin of error when compared against actual sales is 7.2%.  Not bad - but even better when you use our My Estimator tool.  Also, if you want to see how accurate we are in your local area, you can click on the See our accuracy and coverage in your area link on the home page.  For example in the St. Paul, MN area, our median margin of error is 6.5% and 68% of the homes in the area are within 10% of the asking price. 

This local chart is a good tool to have in your back pocket when explaining to buyers/sellers why there is a discrepancy between your price and Zillow's.  Again, updating the home's facts and letting us know about any improvements with the My Estimator tool can also help bring the two numbers closer together.  

For the last couple of months, we at Zillow have been encouraging agents and home owners to post their listings online for free on our site.  Obliviously this is great, free marketing for your home.  But how can you make the most of this free marketing vehicle - how do you get buyers from surfing your home online to physically make the trip to your house?  Photos, Photos, Photos is one important element.  Pricing your home right is also very important.  And finally, write an effective property description.  But what does "effective" mean?  Below is a great article written by Ann Brenoff for the LA Times.  Definitely a good read before writing your next home description. 

House that is `beautiful' sounds better to buyers

By Ann Brenoff
Tribune Newspapers: Los Angeles Times
Published December 17, 2006

Words matter. Wars have started over them. Civilizations have collapsed because of them. And it would appear that the speed with which a house sells might be determined by them.

As listings grow old on the vine in this flush-with-inventory market and frustrated sellers grapple for the slightest edge, the findings of several academics might offer some guidance.

For example, a Canadian professor, as part of a broader study on real estate sales patterns, found that homes where the seller was "motivated" actually took 15 percent longer to sell, while houses listed as "handyman specials" flew off the market in half the average time.

"It surprised even me," said researcher Paul Anglin, who teaches real estate and housing trends at the University of Guelph in Ontario, Canada.

The study dissected the wording of more than 20,000 Canadian home listings from 1997 to 2000. What surprised him most was how the buying public put style over substance. Words that denoted "curb appeal" or general attractiveness helped a property sell faster than those that spoke of "value" and "price."

Homes described as "beautiful" moved 15 percent faster and for 5 percent more in price than the benchmark. "Good-value" homes sold for 5 percent less than average.

Listings where the word "landscaping" was heralded sold 20 percent faster, and homes in "move-in condition" took 12 percent less time to sell than the benchmark, although the study showed "move-in condition" had an insignificant impact on the sales price.

Listings in which the seller said he was "moving" sold for 1 percent less in price compared with 8 percent less when the seller was "motivated."

Last year, the impact of listing language was covered in a National Bureau of Economic Research study. Descriptions of houses that indicated an obvious problem--such as "foreclosure," "as-is" and "handyman special"--drew substantially lower sales prices. Words that suggested desirable attributes--"granite," "maple," "gourmet"--translated into a higher sale price, the study found.

One problem discovered was that "superficially positive" words that, in effect, damn with faint praise--such as "clean" or "quiet"--had zero or even a negative correlation with prices.

The findings echo those made in a 2000 paper called "Real Estate Agent Remarks: Help or Hype?" researched by University of Texas professor Ronald C. Rutherford.

Quick Stats

• 4 million unique users in February; one of the most-visited real estate Web sites in the country
• 3^rd-5^th most visited real estate website
• Half of all 70 million homes on Zillow have been viewed at least once (more than 80% of all homes in some areas of California, Washington and Mass)
• 86% of Zillow's audience are homeowners and more than half of those are actively buying or selling a home
• Half a million homes on Zillow have been claimed by their owner and had their facts updated since the feature launched last fall

Zillow Overview

Zillow has created 70+ million Web pages - one for most every home in America. These pages include Zestimates, satellite and overhead photos, valuation information, and details about the home's sale history. In addition, listing agents and homeowners can further contribute to these pages by uploading their own pictures, planting virtual ‘for sale' signs in their virtual front yards, posting their ‘Make Me Move' price, adding in home improvement information and writing what they love about their home.

Zillow is a media site.  This means revenue is generated by selling advertising around site content.  We do not charge to post listings to the site, nor do we sell leads or get involved in the transaction. 

Zillow Functionality For Real Estate Professionals

Post For Sale- Real estate professionals can post their listings online for free, and upload an unlimited number of photos of the home.  The posting can include a photo of the agent, contact information, and a link to the agent's Web site or MLS listing. 

Real Estate Wiki- This is a place to find up-to-date and relevant information on all things real estate, including home buying, selling and financing, written for and by Zillow's community of users.   Any registered Zillow user can add or edit the content in the wiki.  New pages can also be created about topics that aren't covered yet. 

Application Programming Interface (API)-  Now anyone can add Zillow data and functionality to personal and professional Web sites through Zillow's open API.  All information and code on how to do this can be found on Zillow.com (click the API Network link at the bottom of any page).

Why Real Estate Professionals Should Use Zillow

• Free exposure on a top-trafficked Web site for the agent and their listings.
• According to NAR, 80% of buyers are doing vast amounts of research online.  With 4 million unique users last month, and nearly one half of all homes on Zillow having been viewed, it's clear the public is using the site to research the real estate market.   
• Right now there is a first movers advantage to real estate professionals who are posting for sale.  Just by updating a homes status to ‘for sale', traffic to that specific home increases an average of 200%. In addition, we have just released page counters on nearly every page on Zillow, which allows agents to track how often their listings are being viewed.
• While a private home owner can post their own home for sale, there is value in an agent doing it for them and maintaining the copy, photos, and public inquiries.
• Agents can spend time on the site to learn about the "for sale by owner" market that is available to them, whether their intentions are to prospect or expand the pool of homes a client could consider for sale.  Additionally, we've heard from agents in competitive markets like the San Francisco Bay Area who are looking into Make Me Move homes for their clients as an alternative stream of available homes.    

How To Post

• Simply go to Zillow and click on the Post For Sale tab. 
• It will ask if you are an Agent or an Owner.  Once you click Agent, you just walk through the steps.
• The first time you post a home, it will ask you for a Credit Card number.  This is only to verify who you are and to prevent fraud.  Once you get through the verification process, your Credit Card information is destroyed and no charges are made.    
• Once your identity is verified, you can begin entering information about your listings and upload as many photos as you would like.
• You are also able to set up a profile which will enable your photo, contact information and a link to your website to be displayed on all of your listings. 
• When a listing sells, you can remove it from the site.  Also, Zillow will periodically email you asking you the current status of your postings, to ensure that the information is still current.