Thank you for posting this blog post. It is indeed thought provoking. I have been reading a few other blogs lately expressing the same concerns. Real estate agents and brokers should be considering these issues.
It is an issue that I have been thinking about. I agree with the article, that it will be difficult to replace agents but not impossible. I choose not to fund Zillow as I think it's not in my best interest not to participate. I don't like to argue with buyers and sellers why the Zestimates aren't correct.
@Mark Archer are you an agent or broker? What is your opinion of the blog?
I just now signed up on this Bigger Pockets in an attempt to send this far and wide... I agree with David Dion and I know him personally.. The 3rd Party Real Estate Sites are of no Value to the real estate professional nor to the general public. I would like to get this in front of as many realtors as possible to see if we can at least put a dent in those companies that are stealing from us right in front of us!! I am a realtor that is sick of ALL the pick pockets that have their hands in our pockets!
@Mark Archer - Can you tell me how sites like Zillow or Trulia are stealing from agents? You make comments that vent about these sites, but I'm not sure I understand your argument.
Care to clarify?
Please feel free to READ the post that I posted and I am quite certain once you take the time to read it, I will no longer need to explain my comments.. Thanks.
The article was a jumbled mess in my opinion, and I really have no idea what your comments are based upon, so I'll ask for clarification. How are they stealing from agents?
If you want to raise a discussion about how bad these companies are, you're going to have to explain to those of us who don't funny understand where you're coming from. We'd appreciate your insight.
Knowing Josh, he did in fact read the article before commenting and I think what he's asking is how exactly these sites are ripping off agents, when typically someone looks for listings on these sites, they proceed to contact the listing agent who put them up and/or the list of agents who are being advertised on the site right next to the listing, who then will show them the house, sign contracts, make the commission etc...
This post was not meant to get into some sort of long winded argument with those who want to argue because they enjoy it.. Either read it or don't, I don't care either way! If it makes no sense to you then move on... Have a good weekend..
All of this thinly veiled hostility is not what readers want to see. We are here to network, learn, and expand our business. Comments like "I just now signed up on this Bigger Pockets in an attempt to send this far and wide..." display an agenda that resembles a smear campaign.
Make a solid argument and you'll have my attention. Posting smear ads and refusing to defend it with intelligeble arguments is just a waste of my time.
No smear campaign at all... The fact are in the article and there are many agents where I live that feel the same way as I do about these 3rd party sites. The information is seldom accurate so much so that consumers are starting to post about the accuracy of these sites or the lack thereof. I did not post this to argue with anyone. If you don't feel the same way then good for you. I am seeing consumers posting on sites like the ripoff report and other places about the damages they feel these sites are doing to them. These sites are selling the traffic they get on their sites based on bogus information. This article has been requested by a very well know publisher and I am sure you will be seeing a version of this article in an upcoming issue.
@Mark Archer - If you can demonstrate that these sites are stealing from agents, I'd like to hear it, but I haven't seen a shred of evidence from your arguments or those of the article to prove it.
You made a serious claim -- that these site are stealing. If you are going to make a statement, you need to back it up.
As for some major publisher that is interested in the article, that means nothing to me.
So . . . back up your claim please. Thanks.
As the title states "You Decide"... You have decided and I have decided.. We disagree completely.. So with that being said I am done discussing this with you. It is obvious you are choosing to support these 3rd party companies and I am not. There is further discussion in many forums that discuss the code of ethics. Some will say that a realtor who pays for the traffic from these sites may be in violation of the code of ethics since these sites are knowingly posting information that is not accurate and is deceitful. The code of ethics requires realtors to deal fairly and honestly with the public. Don't shoot the messenger as this is what is being said by some of our industry leaders. Joshua have a great weekend. I am now out for the day to show properties to clients I have without the help from any third party site. Good Day!
If you provided a single shred of evidence of this supposed "stealing", I'd be willing to listen.
Nothing you've said has supported that statement.
Providing data that may not be completely accurate doesn't mean they are stealing . . . that makes no sense.
You would do better to not ask people to read that article. If Zillow works out for the consumer as well as Netflix, life will be great.
I use it all the time. The valuations are not always correct but the trends usually are. Mostly, it gives me an easy way to quickly get some basics on a property or neighborhood. I've even used agents on there.
The MLS system is a mess in many markets. Zillow gives people a great place to start. If you think it is stealing your business, get better at your craft.
@Joshua Dorkin and @Mark Archer - I am affiliated with Crye-Leike Realtors in TN. Crye-Leike is the "number 1" firm in the Mid-South (TN, MS, AR, AL, etc) and number 5 in the nation. The owners of Crye-Leike have recently decided to stop syndication of listings to Zillow, Trulia (and maybe some others) in the Memphis market (our largest market). This is being done for several reasons as I understand it. Among those reasons are Zillow's and Trulia's habit of publishing incorrect information and/or old and out-dated information, as well as the "zestimates" which are often horribly wrong. Other concerns with these companies are that they take our information (listings) which are then used to obtain leads, and they then sell those leads back to us - or worse, they sell those leads to agents at other firms. Personally, I don't participate in Zillow's programs, so I don't fully understand all of the nitty-gritty details. But suffice it to say that there are some very big players in the industry who have become very concerned and very frustrated with the actions of Zillow, Trulia, and others, and are beginning to fight back. I wish that I could better explain the situation, but I don't fully understand it myself as I focus on investing and not on brokerage.
1. Expedia, Netflix, and E-Trade are all extremely empowering to the consumer.
2. Zillow provides information for consumers like Expedia. I believe this is extremely positive for the consumer and the community overall.
3. Zillow never claims that the Zestimate is perfect.
4. Real estate agents have been able to be more productive with Zillow advertising.
5. Perhaps these new technologies at Zillow will improve productivity and reduce the number of agents in the country. But those left will be more productive. Creative destruction is a positive force in the economy.
I'm pretty sure @Joshua Dorkin read the article before responding but I know I did and I have to agree with Joshua and others. The article is a jumbled mess and does not clearly make a point or support it. The best value on this site comes when people can exchange views, discuss and learn from them. Posting some article and refusing to support your point adds no value whatsoever to the site. I'm the first one to tell people that Zestimate's are meaningless and people should not pay attention to them, but as hard as I try, I'm just not seeing how Zillow is "ripping brokers off" but since you won't explain it, I suppose I'm destined to never know.
Upshot: The disruptive technology of the Internet is threatening the Realtor entitlement.
Thanks @Brian L - you are shedding some light on the OPs gripe, it seems. This is a very important discussion, and I wish the OP found a way to articulate his argument rather than just toss something out there.
I do not have any affiliation with Zilla, Trulia, etc, nor do I put much stock in their "Zestimates" (I think it's common and accepted knowledge that they can be, and often ARE, very inaccurate). That said, those sites are an extremely useful "1st pass" search tool for many of us (as @Walter W.
points out). If they are ripping off realtors, then of course, I don't blame them for objecting and discontinuing cooperation. That said, being a consumer/investor, I don't mind if this helps keep brokers/realtors on their toes a bit. Competition is usually a good thing.
I think Zillow is not going away. It will not be helpful to resent it or ignore it. Use it to your advantage the best you can. I am not an agent. I like to buy fixer upper properties and rent them out. I don't need a realtor for many simple tasks. I have determined a market valuation on many properties and had different realtors then perform theirs. We are always very close.
Just like the article mentioned, those other industry changing companies made things a lot more efficient and much better for the consumer. Zillow can do the same thing. It makes it a lot easier for me to research properties. I know the zestiments are flawwed but can determine a margin of error and still come up with extremely relevent data to make investing decisions. Zillow is free and requires my skills and experience to make it valuable. An agent has skills and experience as well. I just need access to the data and zillow provides that. I am not a vig fan of paying 6% to have my listing put on a website and wait for the calls. It is a steep price in my mind.
Unfortunately the article is a jumbled mess, and if there was a concrete point in there it was certainly lost. That aside, yes the realtor industry is threatened by all the major RE sites. For good reason, one way or another it will disrupt the status quo. How far and how quickly remains to be seen. As for errors on the site, that's a human and/or technology issue/limitation where they exist. May be Zillow's issue, may be issues downstream.
Those who fight the Zillow's of the world will be harmed in the fight, just as the record industry and countless other industries have been in the past. Most "regular home buyers" (non realtor and/or investor) I know use these sites as starting places to find homes to buy. They then call their realtor with a list of homes they want to see or go direct to an open house. If your homes aren't on there, you certainly may miss out on potential buyers.
Fighting them may feel good, but they are here to stay. Like the record industry did (well, sort of...), eventually realtors will have to figure out how to work profitably in the new technology age or go the way of the buggy whip. (I know many realtors are forward thinking on this, lest anyone think I'm lumping all realtors in with this poster.)
My company has a rental on the market in Apex, NC. I advertised on postlets.com. The reality is that there are lot and lots of rentals in Apex and surrounding areas. If I go to realtor.com, and I search on rentals in Apex, my search shows Realtor listed property, but not my company's property. Is this a service to the public?
If I google the address, I get a realtor.com "hit' in the top 10 search results. realtor.com says the status is "Not for Sale". It does not mention it is currently for rent. Isn't this misleading? If I click on the hotpads.com search entry, it shows all the rental information. It even has contact information. Ditto with other real estate sites.
So I look at the realtor.com page again. Just under the address, right next to the picture, realtor.com says "Sold for $70,000 on Nov 4, 2004." Wrong again. I am looking at the closing HUD-1. The price is $66,100. Isn't realtor.com misleading? And "baths" says 2... but under "public records" states correctly 1.5.
In the 6 line summary (sold for, status, baths, house size, lot size, year built) realtor.com has 3 incorrect items.
The realtor.com site, based on MLS, is inaccurate and not the best source of information. That's why zillow.com, with it's flaws, has become the better alternative. I'm not a Zillow fan... but it works. It is non-proprietary and open to all property owners, and is free for users like me.
Never been an agent, but here are my thoughts:
The way that the internet has hurt several other industries that you mention (as well as lawyers and a few others) is through disintermediation, or cutting out the middleman. As you point out very few people buy stocks through a full price broker nor do they call a travel agent to book flights. These professionals have been hurt because information they once controlled is now freely available and the consumer can do an adequate job of processing the information and making the right.
But I would disagree with the implication that the industries mentioned were felled by the investment of 1 guy. There were lots of pressures from lots of directions that caused issues. In the case of video rentals Netflix was a relatively late comer to pressuring rental stores. HBO's expansion was an issue as was pay-per-view, RedBox, earlier internet streaming, and several other alternate ways of getting videos.
But the same thing really hasn't happened in real estate. Are more sales going via FSBO's than before the internet (say, 1985)? Maybe, but I'm not seeing it. It still looks like the real estate agents account for a preponderance of the sales in most places. If there were a path to severely reduce the role of agents I would expect that be falling precipitously by now.
That's not saying that the role of the agent hasn't changed in a couple of decades. I remember when I bought my first house in 1984. My wife and I would spend several hours in the office with an agent paging through the MLS book. That would take a couple of hours, then the agent would schedule a couple of showings for later in the week. We repeated this a few times and in the end bought a house. Now about anybody can search the internet to get a few places to look at. The role of the agent is to market a property well; qualify the people involved; give advice on how a deal may happen as well as making sure all of the proverbial i's are dotted and the t's crossed. Those tasks are a lot harder to automate that looking up the price of an airline fare.
My home country market is tiny compared with the USA so it isn;t a fair comparison but we have one site, similar to Ebay, that completely dominates the RE listings.
This happened primarily because the RE sites are alls o busy protecting themselves in stead of making things easy for the buyers and sellers that the door was wide open for a good site which is what happened.
America is so much bigger that you need more than one site but you always want as many listings as possible in any city on the same site. So sites like Zillow and Trulia and others that combine listings will and should outperform MAAR and similar sites. They are far better built, easier to navigate and most importantly you can see all listings regardless of the RE company.
I cant think of any country where the RE companies dominate online.
Create Lasting Wealth Through Real Estate
Join the millions of people achieving financial freedom through the power of real estate investing