The Dog Woke Me Up

Apr 4, 2007  |  Michael Wurzer

When I wake up in the middle of the night, which is often, I have a bad habit of looking at the tablet PC I keep beside my bed. (My habit used to be my Treo, but now I have this little tablet PC I just love . . . .) Especially now that I’m writing this blog, I’m almost maniacal about checking my feed reader to see what’s going on in the RE.net. Tonight was no different.AJ

We have a new puppy in our household. His name is AJ and he’s been really great so far and usually doesn’t make a peep all night. Yesterday, however, we had a snow storm and the little guy was having trouble staying out long enough to do his business, so he woke up about 2 a.m. and had to go. When I finally got back to bed, out came the tablet and then the second dog in my life kept me awake with their comprehensive coverage of Zillow’s latest announcement. My reaction to Zillow’s news: Yawn.

I was riveted by the coverage provided by the Bloodhound but I think this tidbit on TechCrunch may tell the real story: “Zillow claims 4.1 million unique visitors came to the site in March (Comscore (U.S.) says 1.8 million, down from 2.3 million a year ago, and 33 million monthly page views).” Can these numbers be right? (Heck, we’re doing more page views than that.) Perhaps that’s why Zillow is cranking up the PR machine again.

Zillow’s problem is simple: LISTINGS. They don’t have them and that’s what consumers want to see. Without listings, Zillow isn’t even cute and cuddly. Zillow’s solution to their lack of listings is novel. Instead of getting real listings, they’ve “opened up Zillow’s database of homes” so that “[a]nyone (not just owners and listing agents) can now indicate whether a home is for sale.” My reaction is the same as Tom Hanks’ in the movie Big when he’s listening to the pitch from the super-sophisticated toy executive for his idea of a transforming building: “I don’t get it.” Why would anyone besides the owner or their agent want to post a property for sale? And, even if they did, why would anyone care? How is that a listing? Zillow has been trying to get owners to post listings, but that hasn’t been a runaway success, and my guess is that getting the listings from non-owners isn’t going to work either.

What I really don’t get is why they don’t try to get listings from the big franchises, brokers or the MLS. I know Barton and crew have said agents are overpaid, but isn’t now the time to try to make nice? Trulia and Google Base have been successful in getting the listings, perhaps Zillow could too. What might work is for Zillow and Trulia to merge. Trulia has listings and the better user interface and Zillow has the guesstimates technology. Together, these databases would be very useful for professionals and consumers. Zillow has a great idea (the same as the NAR’s PAG report) of trying to document every property in the country, but the flaw in their execution is that they are ignoring the MLS database, which arguably is the richest source for property information. Without the listings, I don’t think Zillow’s new community tools are going to generate much traction.

I’ve got to get back to sleep now, but, before I do, let me just repeat what I’ve said before: Now is the time for brokers, agents, and MLS organizations to realize and increase the value of the MLS data repository. I’ve got another post or two on this topic, so stay tuned.

9 Responses to “The Dog Woke Me Up”

  1. Joel Burslem says:

    I totally agree with you Michael. Zillow is nothing but a amusing distraction without listings. The question is where do you get those listings from on a national level… MLSes are too regional in nature, there’s too many of them and they’re too bogged down with petty internal politics. Trulia went after the brokers already and has done a pretty good job. Zillow’s just trying another route – heading straight to the agents themselves. I have my doubts whether they can pull it off though.

  2. Will Hutson says:

    You hit the nail on the head.

    While I don’t have a dog this same problem has plagued me with their model and many others in the RE industry.

    I think it comes down to perspective.

    I’m working on a concept I’d like to discuss with you.

    Can you email me and we can chat more?

    Thanks for writing this blog – it’s more than insightful.

    WH

  3. Jessica Swesey says:

    Here’s my two cents as a home shopper, not as a real estate editor:

    I agree that Zillow at this point catches more the mindset of fun than the mindset of “let’s get down to business and buy a house.” But if they do catch on and homeowners across the country log on to claim their homes out of fear that someone else will, then they’ve just successfully added a Web 2.0 layer to the housing market that wasn’t there before.
    I keep imagining this scenario (which i assume is Zillow’s ‘perfect world’): I’m searching my local MLS, a local broker Web site, whatever, for available listings. I come up with four that I really like, but I’ve got some missing key information on each of them that I need to know before I will even do a drive by — hmmm, oh yeah I can check Zillow to see if anyone can answer my question. But right now the odds are pretty low — 100,000 homes claimed is impressive, yet still a very small chunk.
    Either way — they’ve caused all of us to think about and interact with real estate on the Web in a new way.

  4. Will Hutson says:

    Jessica,

    Great points indeed, and much added perspective, but my take would be that – as a rule, web 2.0 companies seek to disrupt and/or reshape the conversation in various industries, mostly by opening up information to a larger audience in an easier to read, search, track, and save format. Zillow does a very good job at this – mainly through their mashups and heatmaps.

    In terms of transforming the site into a transactional platform that web 1.0er’s dreamt of and web 3.0er’s will most likely consist of – they’ll fall short because they aren’t embracing the industry and won’t.

    Even if they tried now – it’s probably too late, Realtors have been overcoming the consumer argument of: “well zillow said my home is worth X so we should list it at that” for long enough to really dislike them forever.

    WH

  5. Joel: I’ve been enjoying FoREM for quite awhile and I’m honored you’ve visited the FBS Blog! I agree MLSs need to present a more unified vision that delivers quality information in a compelling format. The big challenge will be the politics, but I think the timing is right. The next 12-18 months are going to be very interesting!

    Will: I’ll be happy to contact you but you didn’t leave your e-mail.

    Jessica: I’m doubly honored today, with both you and Joel commenting! Your work at Inman is excellent. You’re right, Zillow, et al., are blazing some exciting trails. I know they’ve opened my eyes to new possibilities, and I’m thankful for that. I don’t consider them competitors to us, but they and others certainly are stirring the pot and that makes it exciting. This is a great time to be in web development, especially in real estate!

  6. Kevin Boer says:

    I’ll have to disagree here…

    Zillow is not a listings site, and may never have as many listings as its competitors, and certainly never as many as actual MLS sites. That’s not a problem, however, since Zillow is a media company. We in the industry tend to think of listings as the only really interesting content, and from the transactional point of view of agents making their living representing either the current or future owner of a listing, that makes sense.

    Zillow has shown us that there are many things other than actual listings that will attract eyeballs.

    Why don’t they join each MLS? Simple: There are 900-ish of them, and they all have antiquated rules that would prohibit much of what Zillow wants to do. They’ve made the calculation — and I think the correct one — that they would rather take 10X more time to eventually get a ton of listings but not have to abide by MLS laws than get the data immediately but not be allowed to do anything creative with it.

    Quote: Now is the time for brokers, agents, and MLS organizations to realize and increase the value of the MLS data repository.

    Amen! Unfortunately, I’m skeptical that will happen any time soon. The PTA is a great forum for interacting between parents and teachers, but probably not the best forum for putting together, say, a winning soccer team.

    Likewise, MLS organizations are a good forum for promoting cooperation amongst brokers, but I wouldn’t rely on them to demonstrate too much creativity or foresight about extracting value from their data.

    See this early post of mine about Zillow

  7. Kevin: Thanks for commenting. I feel like I’ve hit the mother-lode with you, Jessica, and Joel all commenting in one day.

    If Zillow isn’t after listings, I don’t understand why they are going to such extremes to get them. As the numbers reported by TechCrunch seem to indicate, the guesstimates don’t bring much repeat traffic.

    I definitely agree that Zillow’s attempt to catalog all properties (not just those for sale) is innovative . I don’t agree that their guesstimates are innovative. I suggest that MLSs haven’t used sold data to produce a guesstimate because they understand guesstimates don’t serve the consumer. As I responded to Jessica, Zillow is moving the ball and the MLSs need to respond. Some already are by publishing sold data and I predict you’ll see a lot more of that in the coming months. Is it so bad that the MLSs are responding cautiously? Innovation is always easier from the outside. I give credit to both Zillow and the MLSs, with each making the right moves for them given the circumstances so far. Time will tell whether Zillow is moving too fast, the MLSs are moving too slow, or something in between, but my gut tells me something is very wrong with Zillow given the doublethink they demonstrated today.

  8. Kevin Boer says:

    Michael:

    Zillow certainly is after listings, but listings are only one part of what I believe they’re after: a complete ad-based ecosystem around the theme of “homes”, with agents providing much of the content, serving to attract consumers, in turn serving to attract agent advertising and more agent content.

  9. […] argument is wrong on many counts.  First, Zillow is not and never will be an MLS.  Second, the MLS is more than technology.  Third, the idea that a monopolistic bureaucracy can […]