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Trulia launches home value estimates

Trulia has jumped into the home value game.

Here’s the deal:

  • The feature is called “Trulia Estimates” (Testimates doesn’t really work, does it?).
  • Estimates are available only in the SF Bay Area for now, but the plan is to expand nationally.
  • Initially, estimates are available only on sold properties, but actives will be included in the near future.
  • The algorithm behind the estimates was created in-house.
  • A key differentiator, as stated by the company, is that Trulia users – both consumers and agents – will be able to provide feedback on individual estimates (see the screen shot below).
  • This feedback will be used for internal purposes only for now. The company would not state if the feedback will be displayed publicly at some point, but would not rule it out either. You be the judge.

Some quick thoughts:

  • This could be viewed as something of a snoozer – a simple parity move – given the Zestimate’s established success with consumers and the fact that both Realtor.com (only on sold properties) and Homes.com have had value estimates for some time.
  • On the other hand, one could look at this as a significant enhancement that places Trulia on a more even footing with Zillow – something that’s very important in the run-up to their anticipated IPO. To date I’ve thought of Trulia as stronger than Zillow as a pure home search application, but Zillow as a more complete consumer offering. One could say that gap is now narrower.
  • The notion of value estimates directly conditioned by user feedback – including Realtors – edges up against the “RVM” concept that is part of RPR. The more that’s available outside the RPR wall, the less unique their value prop becomes.
  • The use of an automated value as a lead-gen lever is executed well here. Note the “get a professional estimate” call to action next to the automated number. I’ve always thought the Zestimate was God’s gift to the Realtor value proposition, so I like how Trulia plays this.
  • This is the latest in a series of UI and feature improvements Trulia has made over the past 6-8 months. The site has become significantly better. They are executing well. I’m looking forward to seeing the S-1.

Here’s the screen cap:

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11 Responses to “Trulia launches home value estimates”

  1. Drew Meyers - Virtual Results says:

    Nothing like a little exciting industry news to spice up the day :)

    There are two things that surprise me about this news.
    1) the fact that they are just now doing this
    2) the fact that they did this in house. Unless they are paying for outside consulting help (and even if they are), or hired someone with significant experience from the b2b AVM space, they have an extremely long fight ahead of them to refine their algorithms to catch Zillow. There’s no replacement for 5 years of experience & learnings crunching property data.

  2. Jim Bilbao says:

    Crowds can be more accurate than professionals at probability estimation, specifically “what will the market bear for home A in the market of kinda similar homes B, C, D, E?” So, bringing crowd sourcing to home pricing is attractive. Thankfully it’s now more technologically possible, too. Some of the crowd’s opinions should be more valuable than others — Realtors see more homes than consumers; their opinions should be more accurate. So, my interests are:
    - How will Trulia foster participation in their valuation game — equal for consumers’ opinions as Realtors or will they foster more participation from the more qualified opinion givers?
    - How will they weight higher qualified (Realtor) different from lower qualified (consumer) participants opinions?
    - How will they get more opinions than the competitors to compete on validity?
    And to Drew’s point, “there’s no replacement for experience”
    - What will they do about the Realtor experience effects? I think there are two Realtor experience effects: a) higher selling price and more equity protection (but a slower sale); b) faster sale (but a lower price).

  3. Justin Britt says:

    Hawaii Life is working on a “Value Score” algorithm that grades the price of a property. We just launched and it’s in beta, so we’re still working out a lot of bugs (including with the detail page itself):

    http://www.hawaiilife.com/mls/1106562/

    The one thing we have going for us is 140+ Realtors with local knowledge providing feedback on our score. As Jim Bilbao comments, “Realtors see more homes than consumers; their opinions should be more accurate.” We believe Realtor knowledge will give us an advantage.

  4. James says:

    No i dont think Testimates would be entirely appropriate!

    Zoopla do this in the UK and it takes time for the data to get to a stage where there is enough ato have some relavancy. Also in tiems where the market moves fast the mathmatical algorithms can get l;eft behind amking their predicted prices look silly and damaging the credibility of a non-human valuation.

    • Jim Bilbao says:

      James makes an excellent point about consumers and professionals providing too few data points to enrich the accuracy of AVMs, a related point to limitations of few data points is bias. Contributors aligned to the buy side of the transaction should be to biased to lower values, those aligned to the sell side the opposite.

  5. steven says:

    To me this is another item in a very long and ever growing list, of why Realtors are losing control of the business. At every corner they are being out smarted by people and companies from outside of the industry.

    It’s really simple, if someone sees a home for sale that they like in their area, they can just ask their friends, and their friends on facebook, twitter etc what they think of the home, and do they think it’s worth the price. And they’ll probably get a faster response that’s unbiased and probably more accurate than they could asking 100 realtors.

    The key for trulia is that the consumers view of realtors is so low that anyone with an easy to understand explanation of their criteria will have a huge plus in their favor. And the delemma for realtors is what happens if trulia’s values come out higher than the realtors. How will they [realtors] explain why they are undervaluing homes. Trulia doesn’t care if a home sells, but realtors do.

    And for you conspiracy theorists, maybe this is what trulia is planning to do for the knockout punch :)

    To me realtors should be more worried about finding more effective ways to market homes, so they sell faster and for their highest price possible, then they won’t have to be concerned with hypotheticals that they can never explain.

    • Jim Bilbao says:

      Realtors on the sell side should be worried about and performing at selling high. Realtors on the buy side should be worried about and performing at buying low. Agent performance in each discipline needs equal differentiation from hypothetical singular values generated by AVMs, whether Trulia or Zillow or any of the others. And what would add clarity for both consumers and brokers alike would be if the AVMs published a comprehensive index of agent performance on the buy and sell side relative to AVM values. It could be more clear what agent create equity selling high and buying low relative to AVM indexed pricing, and what agents sell low and buy high (hi-hi and lo-lo would also be possible agent MOs). Objectify agents’ financial value add, in complement to their customer sat ratings.