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What Zillow doesn't want you to know about its listing gap

251 points| justhw | 10 years ago |buildzoom.com | reply

180 comments

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[+] bcg1|10 years ago|reply
Sold my house this summer. My wife listed the house on Zillow and took nice looking pictures and put a good description. We also paid a real estate agent $300 to list our house in the MLS (and we would handle the rest of the sale). Once our listing was in the MLS Zillow brought in the crapified compressed JPEGs from the MLS feed and overwrote our description etc, and locked us out from further edits. Fail.

Zillow is going about this all wrong... their advantage is that they aren't the MLS system, they are the best positioned to be an alternative to the NAR cartel. If anything THEY should have agents in every town who will put your house into the MLS for you for $300, as well as allow enhanced listing on their site at the same time... they might actually make some money that way, and also it would solve their MLS problem. Instead they seem to want to beg the cartel for a seat at the table. Pretty sad.

[+] rgbrgb|10 years ago|reply
Congrats on the sale!

You could argue that "Zillow is going about this all wrong" if their goal was trying to improve the process of buying and selling homes or if they were trying to make it more affordable to buy a home. What you have to realize is that they have a business that's working very well within the real estate status quo: agents pay them money for ads to get leads, agents who are able to convert leads make a ton from commission, the cycle continues. A public company with an established business model (that prints money!) is not going to pivot and suddenly compete with their well-paying customers.

However, I totally agree that there's a huge opportunity to improve the buying/selling experience and lower transaction costs. My team is working extremely hard on that problem.

Edit: I should note that Zillow has done tremendous work on improving the home shopping process and I'm definitely not trying to knock them on that. They and their competitors have brought the shopping process online and given consumers access to listing info that was previously only available to agents. The actual offer/transaction (the buy button) is the extremely complicated piece we're trying to tackle. It just so happens that in tackling that piece and becoming a brokerage, we get access to a high quality broker-only data feed.

[+] toomuchtodo|10 years ago|reply
You just listed all the reasons Redfin (https://www.redfin.com) is killing it. Their value proposition is that their agents aren't paid on commission, they're paid on your satisfaction. Their website is also very data-intensive compared to MLS sites (which create information asymmetry between buyers, sellers, and brokers due to how they're setup).
[+] rdtsc|10 years ago|reply
NAR is a strong lobby, they will fight tooth and nail to keep their position. Million + realtors are betting their livelihood on having a hold on buying and selling homes, and are not going to let that go easily.

Here is allegedly their letter to the president in 2011 (not related to Zillow but basically how they can throw their weight behind issues):

http://www.ksefocus.com/billdatabase/clientfiles/172/3/1359....

At some point perhaps they might strike a deal work together if they can't' see a way get rid of Zillow.

[+] gdubs|10 years ago|reply
In the end, do you know whether Zillow or the MLS listing led to the sale?
[+] takee|10 years ago|reply
Wait a sec. When you say you paid the realtor $300 to put the listing on MLS, do you mean that you used the realtor only for that service? Or was this in addition to the other services that a typical realtor generally provides?

I am trying to understand how easy it is to go about selling your house on your own using zillow etc, while saving on the sale commission etc that a realtor would have made otherwise.

[+] meritt|10 years ago|reply
Zillow has substantially mitigated the loss of Move.com/Realtor.com by forging direct relationships with numerous MLSs since the cutoff in April.

> Since January, more than 300 MLSs have signed agreements to send listings directly to Zillow and Trulia, providing their members access to the largest audience of home shoppers on mobile and Web 1.

http://investors.zillowgroup.com/releasedetail.cfm?ReleaseID...

The sampling methods used by the author are extremely poor. Miami, FL on Zillow.com and Realtor.com are substantially different areas. Just do a search yourself and look at the map. Realtor appears to be using the metro while Zillow's site defaults to "Miami" only. They need to extract 100% inventory and use exactly the same geofenced boundaries if you want actual 1:1 comparison. Their conclusion may very well be correct but the data sure as hell does not support it.

If you want to criticize Zillow, there are far easier methods than this one. How about that Trulia acquired MarketLeader for $355M (Apr 13), Zillow acquired Trulia for $2.5B (Feb 15), and Zillow just sold MarketLeader for $23M. How much of Trulia's $2.5B pricetag was in recognition of Market Leader's "value"? I'm guessing we'll see at least $200-250M or so drop from Zillow's goodwill ($1.8B as of 6/30/15) on their balance sheet for Q3-15.

[+] Shu_snafu|10 years ago|reply
BuildZoom just updated their numbers to county vs county comparisons that get around the problem of inconsistent geographical boundaries in some cities.

The story remains.

[+] smackfu|10 years ago|reply
The problem is that if the MLS that covers your area didn't make a deal with Zillow, the overall stats don't really matter. Zillow will be useless for house shopping.
[+] gshx|10 years ago|reply
If Zillow can solve the "problem" of putting all the docs (disclosures, inspections, offer docs, title docs later on, etc) up with the listing along with making a network of handymen (to help out with prettifying a house for sale), most buyers and sellers will be happy to pay them 0.5-1% instead of the seller having to pay the agents 4-5%. There's generally not a whole lot of work in buying or selling a house including agents doing events like open houses and helping with "discovery" and the buyer-seller matching problem. The offer process itself is also quite simple and can be done online. That said, the one benefit of an open house/tour hosted by a neutral party, is that it lets potential buyers easily assess a house without having a biased seller in attendance. This can also be managed and does not really require a real estate agent. Zillow and similar services like Trulia have a fantastic market opportunity in front of them.
[+] codingdave|10 years ago|reply
This has been discussed ad nauseum by insiders to the industry for close to 10 years now. Nobody has yet pulled it all together, not for lack of trying, but because of the one major roadblock that you mentioned -- actually going to look at homes. Everything else can be put online, and most of it already is online in one form another, just not always through a single vendor.

I know I'm simply expanding on what you already said, but ... one way or another, you have to go look at a house that you intend to buy. And you don't want the seller there. So you need someone who is trusted by the seller to let you in.

If you can put together a service whereby someone other than real estate agents can do that task, then maybe you could gain traction on everything else.

But I have not talked to anybody who is interested in the work of automating everything else until the problem of physical access to homes is solved, because there isn't money in paperwork. The money in real estate comes from two sources - commissions and mortgages. And most marketing plans depend on reducing commissions, not just redirecting them to a new recipient. So it makes much more business sense to ignore the paperwork that agents normally do, and focus on the mortgage process than the inspection, title, closing process.

After all, that paperwork isn't a pain point for buyers or sellers - they don't do it anyway. The agents do. So the attitude becomes one of, "Who cares if an online service automates the paperwork, when you still needed that agent to open the door? Let the agent go do the paperwork, and at least do some work to earn their stupid commission."

[+] w4|10 years ago|reply
This is all a great idea - but state laws wouldn't permit it (I work in the industry).

Most of the features you described, and the fee structure associated with them, would be in violation of real estate licensing laws. Hence why no one has provided a modern, competitive alternative to real estate brokers: you simply can't under the current regulatory regime. Otherwise, what you've described would almost certainly already exist.

[+] Simulacra|10 years ago|reply
When I was searching for a house I used 5 or so apps to do so. I found that Zillow had many, many listings that were very old, but were placed up top and the dates changed to make it look like it was just listed. However, checking the actual data for that listing shows that it was not pulled from the market and relisted, it was just Zillow constantly boosting really crappy houses that had been on the site for a long time.

In short, trust none of them, use multiple services, and keep looking constnatly. I found my house through my agents MLS system, which was about the time it showed up on the aggregates.

[+] at-fates-hands|10 years ago|reply
I had the same problem this summer.

I was working with an agent and I told him I saw several houses I wanted to look at on Zillow. Sent him the list and all but one was sold. He said the listings were in some cases as much as 6 months old.

After that, he just plugged me into the MLS listings directly and then every time a new house would show up, I'd know about it and could email him if I wanted to see it or not.

I totally agree about not trusting 3rd party apps. MLS, unfortunately is the only reliable source I know of.

[+] jpmattia|10 years ago|reply
> In short, trust none of them

To amplify: I don't think it's any accident that the 2005 housing fiasco happened in this industry. Terrible pricing information (gaps + timeliness), as well as terrible conflicts of interest (buyers brokers are incentivitized to make the buyer pay as much as possible) make me wonder how much longer these dinosaurs are going to continue to operate the same way.

[+] ycitera|10 years ago|reply
Another advice is to go drive around the neighborhood that you are targeting and find by-owner listings and such...
[+] MikeKusold|10 years ago|reply
When I was looking for a condo this past summer, I used RedFin. Since RedFin ties into MSLs (basically a list that all realtors use), I knew about listing before my agent could email me about them.

I highly recommend it, even if you have a non-RedFin agent.

[+] ohitsdom|10 years ago|reply
Zillow used to tie into MLSs but their access was cut in most areas (as described in the article) due to a dispute. Used to be an awesome resource, now it's a ghost town.

Would think it's only a matter of time before realtor.com shuts down similar sites like RedFin.

[+] viral007|10 years ago|reply
MLS --> Multiple Listing Service
[+] imroot|10 years ago|reply
Getting and keeping real estate listings up to date is a big pain in the ass. There's no standardized residential listing data, and while you might get RETS feeds or data dumps from the MLS nightly, it's still on you to ensure that all of the information is parsed correctly and displayed in accordance to the MLS'es standards (or risk being cut off).

Often, MLSes have terms in their contract that say that regardless of the source, that their information must be the canonical source for information in some cities -- which is a huge problem with dealing with REO'ed (Real Estate Owned) properties and the banks that want to sell them.

I know of a startup that eventually just resorted to scraping realtor.com (and I'm sure that they're still doing it to this day) instead of dealing with the various headaches of managing the contracts with the MLSes and RETS providers.

[+] stephengillie|10 years ago|reply
It's a nightmare. I used to work for one of the industry dinosaurs; they have an MLS team that was as large as their development team. They pull data from over 600 MLSes, with different requirements for each. Managing 600 business contacts is a big pain, then there are different data conventions that change without notice. They have had a long-standing arrangement to feed data to Trulia too.

The word is most MLSes use CDNs, so scraping might not be the best way.

[+] jerrysievert|10 years ago|reply
you gave me flashbacks thinking about "RETS", and how many times, it was a XML formatted CSV.

thankfully, someone else was managing the contracts, and we had built a fairly decent feed management system.

i still have nightmares, though.

[+] hoka|10 years ago|reply
yep, and even something as 'simple' as images is difficult. If an image gets removed from the feed, it typically must be removed from the listing page. Tons of little things like this make the data incredibly prickly.
[+] debacle|10 years ago|reply
The MLS system is a disaster. Think Alien 2 levels of mucousy, dark and dank ventilation shafts. Zillow has never not worked really well for all of my uses (shopping, price checking, looking at neighborhoods, etc), and it's done so in a way that no other realty website ever has.

The reality is that realtors have a huge vested interest in making it more difficult to shop for a house and generally rely on information asymmetry in a massive way. Zillow is a massive blow to that barrier and I hope they succeed.

Disclaimer: I've worked for a handful of realtors and with several MLS systems in the past.

[+] rgbrgb|10 years ago|reply
One point that this analysis misses is that there's often a significant delay between the time a property hits the market (lists on MLS) and the time it hits aggregators like Zillow [0]. If you're looking at week old listings in hot markets like LA and SF, then you're looking at a batch of inventory that has already been picked through by savvier buyers.

For this reason, we always recommend that our buyers use a brokerage-quality data feed like ours [1] or Redfin's to monitor for new listings. If you have a reliable data feed and check what's new once a day, then you never miss out on the best properties -- much less stressful than clicking and re-clicking tiny icons on a map.

[0]: http://www.inman.com/2014/02/14/los-angeles-claw-is-first-ml... [1]: https://www.openlistings.com/setup

[+] jasode|10 years ago|reply
FYI: To add some color to the article, here's more information about the different relationships of MLS with Zillow and Redfin from a former Redfin intern (posted July 28, 2014):

https://news.ycombinator.com/item?id=8096912

[+] ohitsdom|10 years ago|reply
> So as not to violate Zillow.com’s terms of service we have done so manually (hence the limited number of cities).

Can sites have a legally enforceable terms of service that ban automated access? I understand if the automated traffic is high and impacts server performance and cost, but they can ban it even if it's limited? I understand sites need to protect their servers, but if it's publicly accessible and the traffic is reasonable, I'm surprised it's legally enforceable to ban it. And as shown by this blog post, it still can be done manually so the ban isn't very effective.

[+] rconti|10 years ago|reply
A better question: Can they back up a Cease and Desist on a blog post based on data you've already gathered, through automated access that may have broken the TOU?
[+] tyre|10 years ago|reply
Yes. Sites can ban traffic for any reason they choose. You're using their servers and they have the right to determine how those servers are accessed.

They don't need a specific "right" to control their servers. Likewise, users on the internet have no "right" to access anything.

[+] cwilkes|10 years ago|reply
What annoys me about Zillow is that their "number of days on Zillow" is totally bogus. A house down the street was on the market for 2 months (at a highly inflated value). Time on Zillow? 2 weeks.

Maybe the time on Zillow is based on repricing or taking it off the market and putting it back on? Either way if you were looking for homes unless you kept track of an individual house you wouldn't be any wiser.

Also amusingly the house was a tear down, so the Zestimate was based on the old crappy house. Which I'm sure the builders loved -- it was half the price of the newly built home.

[+] Simulacra|10 years ago|reply
I had this problem a lot. I really wish Zillow allowed you to block houses from your search, regardless of price changes, relistings, etc. I came across the same lot of sad, crappy, and overpriced homes over and over, because Zillow kept erroneously marking them as "just listed!"
[+] jonathankoren|10 years ago|reply
Well you're not buying the house to be built. You're buying the land and the crappy house. By your logic, you'd be paying for the new house twice. Once you when you pay the builders, and again when you just throw money at the seller of the tear down.
[+] jonknee|10 years ago|reply
It's also possible the Zillow listing didn't happen at the same time the home went on the market. It may have been on Realtor.com for 6 weeks before going onto Zillow.
[+] borkabrak|10 years ago|reply
..aand it's gone.

I just got:

"–This post has been temporarily removed at the request of Zillow. We are collaborating with them to write a more complete version of the story, and will have an updated version posted on October 7th.–"

Nothing creepy about that. Certainly doesn't leave me feeling that whatever it is the article said about Zillow apparently hit them pretty close to home.

[+] patja|10 years ago|reply
Looking at the C&D letter, it seems that Zillow is saying any use of their site for commercial use is prohibited. Wouldn't that cover traditional print journalists doing a similar story, or any story that made use of information gleaned from Zillow?

Why didn't Bloomberg receive a C&D for this story which says "Bloomberg used data from the U.S. Census Bureau, Zillow Group Inc. and Bankrate.com to quantify how much more money millennials would need to earn each year to afford a home in the largest U.S. cities." http://www.bloomberg.com/news/articles/2015-06-08/these-are-...

I guess nobody except the EFF really wants to take on this type of fight.

[+] alyx|10 years ago|reply
Anybody know of any good sources of MLS data for programmatic consumption (even if not free)?
[+] garethsprice|10 years ago|reply
There aren't any. All the regional MLS' are separate entities and make it as annoying/difficult/expensive as possible to access their data programatically. Think having to be a licensed broker, then paying for access to download a daily CSV with all active listings.

Who'd have thought that an industry of middlemen would make it hard to reduce friction in their marketplace...

(Source: building websites with MLS integration for real estate offices)

[+] CodyReichert|10 years ago|reply
Without having direct access to an MLS (ie, being a brokerage), you're pretty much SOL for getting access to decent listing data.

If you DO have access, and you're looking for a solution to use the MLS data via a more simple API - SimplyRETS (https://simplyrets.com) can help with that :) (Disclaimer: I'm a cofounder).

Past that, ListHub, as another user mentioned, is probably the best bet if you're not a member of an MLS - but it's not free.

[+] JustSomeNobody|10 years ago|reply
I bet Zillow would love to know, too!
[+] troisx|10 years ago|reply
You could try Listhub, but they charge. Any other source would most likely not be legally obtained.
[+] nickgrosvenor|10 years ago|reply
Redfin is more accurate than zillow, They list new listings much faster and the interface is better. I'm in LA and redfin is superior.
[+] pbreit|10 years ago|reply
I like how they speculate that where Zillow has more listings that it could be because Zillow has database or data scrubbing problems and not the other way around.
[+] justinzollars|10 years ago|reply
As a recent home buyer, I found Zillow information to be at least one week out of date. In most cities, that probably isn't a big deal; however in the San Francisco Bay area I found the site pretty useless because all of the homes I was interested in, I was unable to see because they were usually off the market, pending or very late in the process where I was unable to visit the home.

I ended up using a Sotheby's owned site, with accurate data.

Additionally, their Zillow Estimate information is at least 20% low in SF, even by admission of their own analysis: http://www.zillow.com/zestimate/#acc

The benefit I should mention is that I met a great Realtor through their ads, which he admitted to spending thousands of dollars on per month on.

[+] xacaxulu|10 years ago|reply
It doesn't seem surprising that Zillow is pump-and-dumping in an already extremely bubbly market.
[+] staunch|10 years ago|reply
I lost all faith in Zillow when I realized their estimate was just a number based on their guess at a price per square foot times the square footage...

A properties historical "Zestimate" changes if you update the current square footage. Whatajoke!

[+] nkozyra|10 years ago|reply
I somehow doubt it's that simplistic, though I imagine price/sqft is a heavy factor. And it should be, really. If you can find sales in the neighborhood and compute their price/sqft, there should be some relationship, modifiable by other features (pool, central air, etc.)

Case in point, my house's Zestimate comes out to $105/sqft, and my neighbor's comes in at $100/sqft. A neighbor without a pool's house comes in at $96/sqft. That would indicate that their "guess" is where the magic is - a price per square foot is computed based on factors that are not readily apparent.

[+] encoderer|10 years ago|reply
It's most certainly not that simple. Valuation models have been around a long time and none are that simple. Perhaps it considers updates to be corrections to incorrect data. In which case recalculating the history seems reasonable to me