Zill oh no!23rd October 2020
Zillow. Dangerous territory for a Realtor to write about and yet the most obvious topic that should be addressed. The Z monster is often hated by Realtors. What realtors like to say is “they are trying to take our job away”. I guess there is some truth in that. They are trying to participate in the real estate process and they are taking away some of the responsibilities that we once had.
It wasn’t too long ago that Realtor’s had the keys to the castle.
There was just no way to get around working with a licensed real estate agent. As a licensed Realtor I think it’s important to have us involved in the process because of what our expertise brings to the table.
Zillow came as an inevitability of technology. Information has become very fluid in almost every industry and there are way more pros than cons out there.
WARNING:For all of you users of Zillow I will tell you this, the website is not for you it’s for me. It’s like they always say with Internet platforms, if you aren’t paying for a product or service then you ARE the product or service. It doesn’t mean that there’s anything shady out there but just keep that in mind as you read this blog.
Zillow provides a user-friendly platform that is intuitive and gives the users useful and necessary information about properties, past sales. And the convenience to speak directly with a representative agent who works in the area. Nothing wrong with that.
Realtors cannot disagree with the fact that a large amount of most agents time and money goes into prospecting. That’s why the main goal of building a real estate business, that’s successful, is based on building out a community that is reciprocal with referral business. What Zillow is positioning themselves to do is take this responsibility of procuring new business off the table of the Realtor.
Sounds pretty great doesn’t it? The only difference is when you get a referral call from your past clients or friends and family typically it doesn’t cost you anything. However, when you work with Zillow to connect with new potential business it costs the agent quite a bit. And users don’t know that.
Depending on what kind of service the agent pays for it can become very expensive. There are realtors and real estate teams in Richmond Virginia to spend over a $250,000 to source leads from Zillow. In fact, most of the money that Zillow sources is from the most successful agents around the country.
The convenience of connecting with a licensed Realtor is twofold. I am currently working with Zillow to connect with new clients and sometimes those connections are fantastic. I meet wonderful people, help them find the home they love or sell the one they’ve outgrown, sometimes after this process we become lifelong friends. AMAZING! This does happen. I also get calls from people who are completely unprepared to purchase, they don’t understand the process, they don’t even know that they are about to speak to a licensed Realtor and often when they do they are perturbed that I’m even calling them. I guess it comes with the territory. (Realtors always have to walk a fine line between responsive and annoying, not easy.)
So back to what this website is used for. Right now it is, like mentioned above, a user-friendly database for all things real estate. It has pulled together tons of information on past transactions and it also utilizes algorithms to predict the future of business, values of homes and other sorts of helpful details.
I won’t go into all of their variables and how accurate they may or may not be. But what I can tell you is this, these estimates are just OK, please do refer to the expertise of a licensed realtor to crunch numbers. I can give you 1 million examples of how or why this estimate can be wrong but here are two.
If you have the exact same home on the same block and one is totally deteriorated and the other has about $50,000 in improvements Zillow will assume that they are both worth the same. They just don’t have the ability to look inside the home and speak with the owner and gauge the condition and return on investments over the course of the ownership. The other example, I witnessed Zillow’s algorithm mistake a hospital for a home. They valued the hospital as a $6 million property which doubled the Zestimate value of all surrounding homes. Owners were very happy and then disappointed.
Since Zillow has collected vast amounts of data it has generated tons of real estate traffic. Basically, they are the first hit when it comes to googling an address or any sort of quick real estate search. They have millions of people pop onto the website to look around and begin, continue or maybe even finish their home-buying search.
Again, I see nothing wrong with that. The challenges for users to understand how to navigate the best ways to engage with this website. Some clients who are already represented and signed with a Realtor may pop onto the website and click on a simple button to ask “someone” a question about a listed property. They may not realize they are speaking with a listing agent, for example, who then will set up a showing and meet them at the property. Then you have someone representing the seller speaking directly with a potential buyer which puts the buyer at risk.
Or, they might meet a different buyers Agent and go through the same motions only for the buyers agent to find out, when it comes time to write the offer, that this client you worked with to show them the property, is going to write the offer with some other Realtor. That’s a disappointment for the agent. And confusing for the Client.
One thing in regards to the real estate world which I always thought was obvious but I’m still surprised to know that many people do not understand, is that realtors are on a 100% commission based income. We get paid, by the SELLERS when the deal is closed. Maybe Zillow can have a user handbook so everyone can be on the same page.
Final take away, USE Zillow! Nothing wrong with that. Check out their Zestimates but take them with a grain of salt. Just make sure when you’re ready to buy or sell you just call us first. 😉