Technology

The Zillow Effect

Author
Joel Burslem
No.
930
Date
04/22/15

In 2007, Rich Barton sat on stage at Inman Connect and described his vision for Zillow to be at the center of a bustling real estate marketplace. I met and interviewed him shortly thereafter. His vision was bold, and it provoked a lot of industry ire at the time.

In the years since then, the company has sought to play down this boldness using its jazz hands and repeated reassuring sound bites from its telegenic executives. Zillow wants to partner with the industry. It’s “just a media company.”

And while Zillow representatives talk about how they “don’t want to get into the MLS business,” I think that’s rather like Uber saying it “doesn’t want to get into taxi cab business.”

Both may be true statements of intent, but perhaps not of effect.

As someone who works every day with brokers to define their future, I think the effects are what really matter.

I believe Zillow has built that marketplace Barton described from the stage in San Francisco nearly a decade ago.

A true story

My wife’s aunt sold her condo in Portland last week.That, in and of itself, isn’t remarkable.

How she did it however, is.

She sold it on Zillow.

She posted the property on a Tuesday and by Friday had an over-asking-price offer. A real one.

All of the listing photos and details were still in Zillow’s database from the last time it was on the market. It took her just a couple minutes to update the description, change the list price (which Zillow suggested through its Zestimate on the property) and flip the status switch to “Active.”

Three days later, she changed the status to “Pending.”

The normal caveats apply here: hot market, low inventory, FSBOs have been around forever, etc. And we all know she probably would have gotten more for her property – and incurred less risk – had she listed with an agent.

These things are all true.

But the basic facts of her story are also true. This busy professional, who just wanted to sell her property as quickly as possible, listed it on Zillow, got an offer, and is under contract. She said it was shockingly easy to do.

You think the next time she sells another one of her properties she’ll think about using a Realtor? What does she tell her friends? You see where I’m going here…

Tea leaves

While some in the industry have tried to cocoon themselves from the reality that they can be disrupted, I believe it’s consumer behavior – and not industry insistence – that will define what the future of the real estate transaction will look like.

I suspect Zillow knows this and is, at the very least, still complicit in helping make this disruption a reality.

I just saw a glimpse of it.