Birth of a National MLS? Meet Zillow . . .
Author: Joshua Dorkin • URL: http://www.biggerpockets.com/December 9th, 2006 •
Tim Maitski of the Atlanta Report predicts that internet powerhouse Zillow might creep into the national scene to become a replacement for the MLS (Multiple Listing Service) operated by the National Association of Realtors (NAR).
According to Maitski:
Zillow has the potential to be the standard national MLS system open and free to anyone and everyone. They just introduced a free listing system as a new feature. If they can entice a critical mass of people to put their listings into their system, then it will be a must for everyone who wants to sell a home.
I have a feeling they might have a hard time convincing all the Realtors to put their listings on there but their system is so easy to use that the sellers could very easily do it themselves. So the challenge to Zillow will be to try to become a household name. They seem to be getting a lot of free press lately so it might not be that difficult. In a few years if your home isn’t listed on Zillow it will be the same as someone without email or a cell phone.
I agree with Tim that the company with the best chance of succeeding with a national online MLS is Zillow. Over a year ago, I proposed creating a national online MLS. Since then, states like Maine have taken steps towards breaking down the NAR monopoly over MLSs, but the Zillow news is a breakthorugh.
I noticed earlier today that Zillow was now allowing realtors or homeowners to list their properties for sale. Since I’m currently selling one of my properties, I decided to give it a try and list on Zillow. It was very easy to do. The site is well planned out and the properties for sale addition will certainly raise the stakes for Zillow, but there are quite a few things which make me somewhat nervous. I’ll discuss the most important one, security.
Security Problems
The only security check to determine if you are the actual owner of the property is a dropdown list of names. You have to pick who the real owner of the property is, which takes 3 seconds to find out using public records. I could very easily just list a few homes for sale in my neighborhood on Zillow, theoretically raise the comparable prices for my property, then list my home and trick users into paying a premium. People believe what they see, which makes this “scam” an easy one. Trouble makers could easily game the system in its current form and harm innocent property owners.
At this point, it is still early in the process. Zillow could fix the security issues and other problems and grow to become a true giant - the National MLS. On the other hand, it might just continue to churn along, and sit amongst the crowd of other MLS coulda-beens. I guess we’ll soon find out!
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Tags: listing, MLS, multiple, NAR, national, Real Estate Websites, realtor, service, zestimate
Joshua Dorkin
Charles Feldman
Ted Karsch.
Troy Schuricht
Anwell Tsai
Richard Warren
Jim Watkins
Is real estate a local business or a national business?
We ask the same question Teresa. We think it may be both. Realtor.com traffic indicates that national may work to attract buyers. But local (MLS) also works as a reference for local agents. Buyers may not be aware of how to access the local MLS so they go to realtor.com.
Another issue with zillow: the really inaccurate zestimate REQUIRED to sit next to an owner’s list price. Bad call. Give owners, or their agents, the option to hide the zestimate. A really bad zestimate is an obstacle to marketing and may cause a buyer to bypass your listing. Shouldn’t an owner or agent have the right to object to inaccurate information on their lisitng or which may affect it?
Other than that issue, zillow has given value by providing a free venue to list.
I agree that it may be both as well. Regardless, Jeff you’re dead on with the Zestimates being a problem as well for Zillow if they remain next to the sales listing price.
Zillow is going to have to make a decision at some point. Are they a MLS or are they a “price estimate” tool. These two are not consistent with one another in their present form. There are many more issues that arise here. Is there a conflict of interest between being a listing platform and “appraisal” (I hate to say that b/c it is not one) tool? I think so.
Wholeheartedly agree with you Joshua. An of opinion of value is not the same as factual information. Yet watch all the people throwing around the transparency buzzword as justification for the zestimate.
Who controls the listing? Seems zillow want to have a say that it’s opinion of value should be on your listing, even if it’s wrong. That’s sure to sit well with everyone.
I’ve been reading all day long for the past few days regarding the ZillowMonster! The Zestimator is off, placed in the wrong location, and uploading property photo’s are next to impossible…at least in my previous attempts to add my listings to Zillow.com. As a few others have stated, the Zillow needs some updating, either way, they are progressing nicely. Listings are being added in my market by the hour and if Zillow could offer agents/realtors some type of benefits (besides “free listing exposure”); I think they could capitalize on their goals of providing consumers with the information they usually have to submit contact info for.
Jeff - You’re dead on. Like I said before, in order for the system to work, the “Zillow MLS” needs to be seperated from their Zestimates.
Why would someone want to list their property on a site for $X if it is going to say right next to it that the property is worth something else? On top of that, there is a very good chance that that “valuation” is completely wrong.
Makes no sense.
There a lot of things that can go wrong with Make Me Move, but for real estate investors, this is definitely a good feature. Let’s say you own 10 different rental properties, why not set Make Me Move prices on all of them and let the right buyer come along. Since you aren’t putting the property formally up for sale, you’re a lot less likely to upset your tenants.
Zillow might have the ability to be a National MLS with respect to public advertising of listings. However, is this really what a National MLS is? MLS’s are created by real estate professionals for real estate professionals. Should their be an national MLS - you bet. I would love for you to take a look and read what I mean. Check out my blog post here at http://point2agent.wordpress.com/2006/12/25/60/
Best,
Brendan