How does Zillow impact the way property is bought and sold in the Twin Cities?
Zillow Inc. is a large conglomerate that collects data about individual homes for sale or rent in the US. It is the largest and most popular of various companies that take the information about properties for sale as a result of listing contracts between property owners and real estate agents, in a proprietary database, owned by the Boards of realtors across the country, known as the multiple listing service or MLS and repackages the content on their widely advertised site.
As a result of a 2008 lawsuit brought by the Department of Justice against the National Association of Realtors, anyone can have access to the information in the MLS. Zillow, and others (Trulia, hot pads, pad mapper, etc. etc.), take that data and create a consumer friendly search platform which allows a consumer to know about the current inventory of homes for sale which had previously been information proprietary to real estate agents.
Zillow and its competitors allow consumers to do parallel searches with their Realtor as they look for a home. This is generally seen to be a good thing as consumers can bring houses to their agent’s attention as well as vice versa. Real estate agents see it as a way to advertise directly to potential buyers in addition to advertising to other real estate agent.
Zillow Inc, in particular, has become well known for other options on their search platform. Their Zestimate purports to give an estimate on the value of houses based on nearby sales, county tax records, GIS mapping surveys and neighborhood data. Zillow’s CEO was recently in the news when his house sold for 40% less than Zillow’s Zestimate said it was worth. They also, along with Craigslist, are a primary choice for owners to place information about rentals, which are not covered by some MLS systems.
As with all corporations, following the money is an important activity. Zillow makes money from advertising, so a consumer would do well to understand that links to agents or other services like other online advertising means that someone is paying to be there. It doesn’t mean anything about connection, quality, experience, etc. Keep that in mind as you begin your home search! As nice as it is to have housing information at your fingertips, nothing can beat the expertise of a knowledgeable real estate agent if you are truly serious about buying or selling.