All Forum Posts by: Jay Thompson

Real estate agent advertising makes up the bulk of our (Zillow's) revenue. We have zero intention of cutting out agents or brokering real estate. Agents are the ones writing checks to Zillow.

Zillow and Trulia combined capture about 4% of what agents spend on advertising. There is still PLENTY of room for growth in the advertising arena.

While it's not true for investors, the simple fact is that buying and selling real estate is an infrequent, expensive and emotional process for most home buyers and sellers. It's difficult to imagine an app or a website replacing agents for the vast majority of buyers and sellers.

No doubt that technology is changing the role of real estate agents. The good ones are moving from providers of the data to interpreters of the data. The buying process is tricky and convoluted for most people -- who buy a home every 6 - 8 years on average. There will be a need for agents / consultants to guide folks through that process for quite some time.

Jay T. from Zillow here. The Zestimate isn't designed nor intended to be a substitute for a professional property valuation, as is stated numerous times on the site. It's a starting point, and is good for noticing trends. But it shouldn't be used in place of an appraiser or real estate professional.

@Barbara E. - are you affiliated with AppraisalPro? They are located in Kernersville, NC -- where you are also from. Just curious if you are with them. 

Correct. "Non-disclosure state" refers to those states that don't publicly disclose past sales data. The MLS is, in effect, a "private" database, where such info can be (and is) posted.

Jay T from Zillow here. The Zestimate is quite accurate in some places, and not terribly accurate in others. It's really more a function of available public data rather than size of the market.

Since Texas is a "non-disclosure state" the accuracy of the Zestimate suffers somewhat.

We publish accuracy data down to the county level here:

http://www.zillow.com/zestimate/#acc

Just click on "states/counties" in the accuracy table, then click on a state to get the county-level data.

Jay T from Zillow here. Zestimate accuracy varies depending on many factors. Instead of wondering and speculating, why not just use Zillow's own accuracy data, which we publish down to the county level: http://www.zillow.com/zestimate/#acc

JayT from Zillow here. 

It's a Zestimate, not a Zappraisal or Zprice. ;)

In all seriousness, the Zestimate isn't intended to, and can't, replace the opinion of a real estate professional. Here's an article I wrote on Zillow's blog on dealing with "Zestimate objections" 

http://www.zillow.com/blog/pro/but-zillow-says-my-...

No, you are not searching the MLS when you use realtor.com, Zillow, Redfin or any publicly accessible website with listings on it. Even if a local MLS operates a public-facing website, that is not the same as searching the MLS. The only way to truly search an MLS is to become a member of the MLS, and to do that, you'd need to get your real estate license or become an affiliate member by being, for example, an appraiser.

No third-party listing site has every home in the MLS, and the MLS doesn't have every home for sale in the market (they exclude FSBOs, for the most part, and are often missing new construction homes. Some agents are also starting to "pre-market" homes outside of the MLS.)

Disclosure: former real estate broker now working at Zillow

Jay T. from Zillow again. For what it's worth, listing agents can post their listings to Zillow (on both desktop and mobile as well as on partner sites), be identified as the listing agent, fixed in the top slot, with links back to their listing site -- for free.

Thanks for the civil response Dave (not that you wouldn't be civil, but you've seen how conversations like this can spiral rapidly into ugliness).

I completely get where you're coming from with Diverse Solutions. I beta tested the product in the Phoenix market and was their first user, long before I started working at Zillow. I still use it and it still generates a lot of contacts -- it is a great IDX solution. If I'm being completely honest though, your use of it does seem a bit hypocritical given repeated statements you've made about how spending money with Zillow is funding our success, and helping ensure real estate's demise.

You're a smart guy Dave, and a savvy business person. I'm sure you can see how when you suggest you will consider offering offer lead gen/conversion training to any agent that stops advertising with Zillow, while at the same time writing us a check for another one of our products, this might come across to some as an apparent conflict in logic.

But hey, you need to do what you need to do for your site visitors and your business. Those should be priorities.

Many agents feel the same way about spending money on Zillow advertising as you do about spending money on our IDX solution -- it works, and works very well for them. I guess that's where I struggle with all you've written about Zillow lately. It's OK for you to spend money on our IDX product, but for those agents that buy advertising, it's feeding the beast and ending real estate as we know it. I simply don't get that, at all.

Yes, Zillow is a publicly traded company, and yes, we need to please shareholders (and customers too). This is not a revelation to anyone.

You're also correct when you say there is only so much agent advertising dollars being spent. The amount is about $6 billion annually, of which we have about 1% of the market share. So there is still PLENTY of room to grow there.

Agent advertising isn't the only way Zillow generates revenue (though it is the primary way). We also generate revenue through display ads, and our Mortgage Marketplace. We've just barely begun to monetize rentals. None of this is secret or being hidden, it's all in public SEC documents.

I still don't grasp your thought process that we will limit the number of options real estate agents have when choosing where to work. I guess I'm just dense on that aspect and we'll have to just agree to disagree on that matter. Entering into real estate brokerage is the only way that thought remotely makes sense to me, and I can assure you there are zero plans or discussions to do so. There is absolutely no need to do that from a financial or business perspective. Why we would do an about face and completely alter our business model and revenue stream -- one that is growing rapidly and is largely untapped -- is beyond me.

Will Zillow continue to make improvements, introduce new products, features and enhancements and consider new revenue streams? Of course we will. This also shouldn't be a surprise to anyone -- it's how any good business is run.

Thanks again for the reply Dave, and hope you enjoyed the strawberry festival! Dip a few in chocolate and send them my way...

Jay T. from Zillow here. Apologies in advance for a ridiculously lengthy reply.

Clearly as a Zillow employee, I have some bias in this matter. I'll do my best to set that aside.

I'm not going to pick apart David Dion's post. It's his opinion, and he's certainly entitled to have one and distribute it however he deems fit. I have read the linked article, several times, and to be perfectly honest, I can't understand the point. I guess it's that one of Zillow's co-founders is a 'known disrupter' and Zillow may end up disrupting real estate. There's something in there about Zillow needing to continue to grow. Then there is this curious statement, "It is my opinion that they plan on limiting the number of options real estate agents have when choosing where to work."

I don't even know what that means. We're going to somehow reduce the number of brokerages that exist?

Apparently the author just found out that Zillow co-founder Rich Barton also helped start up Expedia, which certainly played a part in disintermediating the travel agent.

This is certainly not news, it's been discussed ad nauseum since approximately February 9, 2006 -- the day after Zillow.com launched. Ditto with discussions about Zillow becoming a real estate brokerage, a national MLS and various and sundry other speculations. None of which have come to fruition in the 8+ years Zillow has been in operation.

The post is whatever it is. Anyone is free to read the article and try to interpret its meaning and intent.

What I would like to specifically reply to is a few things that @Mark Archer brought up here on BiggerPockets.

On Zillow stealing from real estate agents

"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!!" (my emphasis)

and this statement from @Bryan L.

"Other concerns with these companies are that they take our information (listings) which are then used to obtain leads. . ." (my emphasis)

Despite several requests to Mark to clarify his "stealing from us" statement, he refuses to clarify anything.

Let me make this perfectly clear -- Zillow does not "steal" or "take" information from agents or brokers. Agents and brokers GIVE us listing data via a variety of methods. Most listings on Zillow are obtained from syndication services like ListHub and Point2 -- services that the listing broker subscribes to in order to facilitate distribution to various real estate sites scattered across the Internet. Many listings come from direct data feeds sent by -- real estate brokerages and real estate franchises. Some agents enter listings directly into Zillow. Some services like e-flyer and virtual tour sites also send us listings -- listings that agents and brokers input into those sites and agree to have their listing data re-distributed to us.

Brokers are in control of where they enter their listings, and where they go -- as they should be.

Again, Zillow doesn't "steal" or "take" listing data. We use the data sent to us by agents and brokers.

Mr. Archer himself has two listings on Zillow -- sent to us by Remax.com (as can be seen on his Zillow profile). The author of the post has a listing on Zillow, sent to us by Diverse Solutions (as can be seen on his Zillow profile). Diverse Solutions a real estate IDX provider that Mr. Dion uses to enable a home search on several of his websites. Ironically, Diverse Solutions is owned by Zillow, so the post author himself is financially supporting Zillow by using the Diverse Solutions product. (One of many examples is here.)

Did we "steal" these listings from Mr. Dion and Mr. Archer? No, they sent them to us, or they authorized a service / website to send them to us.

How can this even remotely be considered "stealing"?

Mr. Archer refuses to support his claim that Zillow is "stealing from us right in front of us!!"

I believe I have shown that Zillow is in no way stealing or taking listing data from real estate agents and brokers.

On Mark's reference to the Ripoff Report

"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."

He is correct. There have been 24 Zillow related entries on the RipOff Report site since September 25, 2010.

Twenty-four.

In that same time period, there have been 1,655,290,000 unique visitor to Zillow. Let's round down and call it 1.6 billion visitors. (source)

24 complaints on the RipOff report vs. 1.6 billion visits. If my math is correct, that would be 0.0000015% of visitors that have filed a report on RipOff report.com

Yes, there have been some complaints left on other sites.

We are not perfect. We know the data isn't perfect. There are many reasons for that, some technical, some is certainly on our side -- and we are addressing that. A significant portion of the listing quality issue is the age-old "GIGO" -- garbage in, garbage out. Right now, in the Arizona Regional MLS (ARMLS - the only MLS I have access to as I am a licensed broker in Arizona) there are 576 listings showing a property tax of < $10. Having lived in the Phoenix area for over 13 years, I can assure you that a backyard pup tent has a higher tax rate than $10.

There is a listing in ARMLS that is a lovely 3 bedroom, 212 bathroom home. Maybe it really does have 212 bathrooms, though how they squeeze them all into 1,571 square feet is beyond me.

Having sold real estate and having run a brokerage in Phoenix, I can assure you the MLS is chocked full of homes with bad information. Sure, 212 bathrooms is an obvious mistake. But how many homes are listed with 3 bedrooms instead of 4? I've seen homes in the MLS with bad addresses and listing prices and incorrect listing statuses and a myriad of other data issues.

Data accuracy is a real issue, with Zillow, with MLS's, with IDX feeds, you name it. I'm not trying to make excuses or point fingers, but if one if going to complain about data accuracy issues, one might want to clean up their own home too. We're certainly pouring time and resources into it.

On Zestimates

It's a Zestimate, not a Zapprasial or a Zprice. Zillow fully discloses what the Zestimate is, and the Zestimate accuracy. My experience as an agent and broker showed me that if you understand the Zestimate, any objections clients may have about it can be resolved in a 60 second conversation. It's called handling a fundamental sales objection, and we give agents the information they need to handle it. Consumers are smart, it's really not a difficult conversation.

On usefulness

"The 3rd Party Real Estate Sites are of no Value to the real estate professional nor to the general public."

I respectfully disagree. On March 31, 2014, there were 52,968 Zillow Premier Agents (what we call agents that advertise with Zillow). Nearly 60% of new Premier Agent sales in the quarter came from existing Premier Agents buying more advertising.

Sounds like at least some real estate professionals find value in advertising on Zillow.

As for consumers finding value, in April 2014 Zillow hit another record of nearly 79 million monthly unique users on mobile and Web, up 50% Y-O-Y. Also in April 2014, more than 460 million homes were viewed on Zillow via a mobile device, which equates to 178 homes per second.

Sounds like there are a few in the general public that find value in Zillow.

(source: Q1 2014 Quarterly Report)

Just as with Mr. Dion's posting his opinion, Mr. Archer is free to post his opinion as well. Unfortunately, all I'm hearing here, and elsewhere, is "read the article" and "I am done discussing this with you" despite no discussion having taken place other than baseless accusations that we are "stealing" and "not providing value".

Zillow is a media and advertising company, We sell impressions, not houses. If one disagrees with Zillow, its management, its business model, or whatever, the solutions seems staggeringly simple -- don't buy our advertising or ancillary products.

Again, my apologies for the long reply. If you've read this far, I commend you!