The Craigslist-ing of Zillow
Zillow announced today that it will allow users and agents to post homes for sale for free. Zillow has gained a great deal of traction and has become the poster child of vertical search in the 10 months since its launch. The property values it estimates have become a useful function for lots of home buyers as well as the voyeuristic and narcissistic set of Internet users; to “Zillow” oneself has joined “Googling” in Internet parlance.
Adding actual for-sale information should greatly enhance this utility, and it will come at a good time, when the novel effects of its home estimates (or “Zestimates”) wear off to some degree. Spencer Rascoff, who spoke at ILM:06 last week, claimed that more than 60 percent of Zestimates are within 10 percent of real home values (determined by sale prices). Zestimates in combination with actual indication of homes that are for sale will provide a novel and useful feature set.
The home sale info will take the form of virtual “for sale” signs that are indicated on front yards in Zillow overhead maps. More information can be found in the preview pages of each home data that are generated by users or real estate agents. To cater to buyers who casually browse Zillow in search of properties, the site will also now offer what it calls “Make Me Move.” This will allow any owner to list a price on his home whether or not it is actively on the market that represents the price floor that would make them consider handing over the keys. Essentially it facilitates deals where they might not have otherwise been. Some users will no doubt have fun with this and post astronomical offer limits, but it could also prove useful.
Most of all for Zillow, these tools are hoped to help the site continue to grow its traffic, which it will monetize with advertising. The site doesn’t post paid listings, but this is as close as it has come to doing so, and it appears it will continue to monetize through advertising. Rascoff explained at ILM:06 that vertical search sites are poised to benefit from the growth of targeted online advertising and that the company will continue to go down this path. Peter Krasilovsky expanded on this point earlier in the week.
This, along with the democratization of real estate listings, has caused interesting companies to sprout up that serve listings, maps and real estate information in new ways. As part of this new feature set, for example, Zillow will launch a section of its site called a “Real Estate Wiki” that has hundreds of articles about home owning, buying and selling. Users can contribute and edit to grow this library. Zillow in the past has also integrated Windows Live Local bird’s-eye view imagery, and it has a tool that allows mobile users to send any address to a server, which returns a Zestimate and specs.
Keep watching this company and read more about Rascoff’s keynote address at ILM:06 in the current issue of Local Media Journal, which publishes today.
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My take: a certain segment of the FSBO market is going to really jump on this to the considerable exposure of newspaper real estate sections, which rely heavily on FSBO advertising. But Realtors will have mixed feelings. In my wife's Real Estate office, for instance, Realtors vigorously debate whether Zillow is a good thing that helps them hone in on neighborhoods for their clients (her view), or just another dis-intermediating step that cuts them out.
More analysis at http://www.localonliner.com and especially, http://www.brontemedia.com.
Zillow “Guess-Idiots” appear to rely on public tax records that in some cases haven’t been updated in twenty-five years. The zestimator is a sketchy tool to rely on. I believe it’s best to use a Professional Appraiser when valuing real estate.