story by Kim Souza
ksouza@thecitywire.com
Real estate is a local business, but two global marketers Trulia and Zillow have been hard at it transforming aggregated local data into booming businesses and brands of their own. However, the national players aren’t always supported by the local industry.
Harold Crye, president of Memphis-based Crye-Leike Real Estate, recently backed away from providing Trulia and Zillow with listing information in the Memphis market. He said the firm will continue to evaluate its Jan. 28 decision over the next few months in terms of any pushback from its customers.
“I can tell you so far there has been a 99% approval rating in Memphis since we pulled the plug on Zillow and Truila — very little pushback,” Crye said. “Trulia has asked to meet with us on this issue, but it was postponed because of weather. We are supposed to meet later this month.”
He said for now there are no plans to cut the services in other markets while they evaluate the move in Memphis.
LISTING INACCURACIES
Crye said there are plenty of reasons to walk away from third party listing sites, and top of the list are the “glaring” inaccuracies.
“The information they provide is not clean, it’s not accurate and it’s not up-to-date. They have home listings on their sites that sold six months ago, sometimes a year ago. The listing price has been wrong on occasion and the estimated values are low in some cases or occasionally too high,” Crye said.
Trulia told The City Wire that it works with hundreds of brokers and multiple listing services to improve the accuracy of their listings.
“We are continuing to work with Crye-Leike in its other markets, to improve the accuracy of its listings on Trulia,” said Alon Chaver, vice president-industry services at Truila.
Chaver adds that firms like Crye-Leike can leverage the Trulia platform and the 35 million unique monthly visitors who are looking for homes and agents to deliver ever increasing value to their agents and the sellers they represent.
Zillow told The City Wire that accuracy and timeliness of listings are very important to the company.
“We work with MLSs, brokerages, agents and homeowners to get the most complete set of listings possible. We update listings every 15 minutes with new information we receive,” said Amanda Wooley, spokeswoman for Zillow.
Crye also doesn’t like that these platforms allow local real estate experts to be pushed aside by those willing to pay for exposure on third party sites. He said the listing real estate firm that gave them the data is scantly represented on these sites.
Dozens of firms from Minneapolis to Alabama have been walking away from Zillow and Trulia over the past 18 months, citing the inaccuracies and other concerns. One of the more vocal markets on this issue has been Austin, Texas. The Austin Board of Realtors recently announced that as of April 30, it will no longer distribute its members’ listings to third-party portals through the syndicator ListHub.
The Realtor board cited concerns about unethical business practices and inaccurate listing data on third-party sites. Agents who still want to use these sites can do so on their own.
Crye said he gave his Memphis agents that same option.
‘ZESTIMATE’ VALUE
One bone of contention among the agents surveyed for this story is Zilow’s zestimate.
“One of my agents had a client who asked that their listing be supplied to Zillow, the agent showed them the low zestimate value which was $20,000 below the list price of their home and the seller opted not to give Zillow the listing,” Crye said.
Nicky Dou, broker with Keller Williams in Bentonville, said the zestimate is “nonsense” as anyone can post home improvements to these sites, even if they are not made.
Zillow said the zestimate is calculated using an algorithm that looks at facts about the house itself from public records (square footage, beds/baths, tax assessments, last sale price of the home itself, timing of the sale) along with user-submitted data. Zillow encourages home owners to claim their home on Zillow and submit updated home facts, such as home additions or remodels.
Wooley said Zillow has undated information on 25 million homes. It calculates zestimate values three times a week and publishes accuracy statistics down to the county level on the site. Nationally, Zillow said it has a median error of 7%.
ENCROACHMENT
The Northwest Arkansas Board of Realtors (NABOR) is aware of issues with Zillow and has discussed steps it can address regarding accuracy and encroachment concerns from third party sites. NABOR does give local MLS data to Zillow, Truila and other third party sites.
“As a board we have a set of rules that third party aggregators are supposed to sign. Zillow has never signed it. These rules deal with keeping the data we supply up to date. The next step for our board will be to enforce these rules from the third party sites. The ball will be in Zillow’s court,” said Doyle Yates, president elect for the NABOR.
He serves on the National Board of Realtors and said the industry trade group is prepared to fend off further encroachment. Yates said efforts are being made to beef up Realtor.com, which is the industry’s own national listing service.
“The only way we will be able to keep third party aggregators like Zillow at bay is have a more accurate alternative like Realtor.com where we can direct buyers and sellers,” Yates said.
He said the industry is cautious about courting Zillow, after seeing what happened to the travel agency sector with the rise of online sites Hotwire and Expedia. Zillow CEO Spencer Rascoff cofounded Hotwire in 1999, sold it to Expedia in 2003 and helped form Zillow in 2005.
NECESSARY EVIL
Kevin King, broker with Weichert Realtors King Realty Group in Fort Smith, said the local board of Realtors voted to provide the multiple listing data to third party sites.
“We felt like getting the most exposure possible for our clients was the right thing to do. It comes at a cost to the agent, and broker but we felt the clients deserve the exposure,” King said.
Zillow and Trulia garner heavy traffic from around the globe as these companies aggregate local MLS data into a more international database.
“The downside is that we are providing the data free of charge to these sites, who then profit by selling leads and exclusive access to any agent willing to pay the fees,” King said.
King agreed that the data on the site can be in accurate, and said that’s why there is still a need for local real estate professionals.
Jason Smith, broker for Crye-Leike in Fayetteville, uses Zillow and Trulia and pays handsomely to get the leads and exclusive access that Zillow provides to Premier Agents. He admits that data on the sites are often inaccurate, but said Zillow is the No. 1 most visited site for real estate listings and he believes getting the most exposure possible for his sellers.
“Buyers and sellers still need to deal with a local professional, even though they may start their search on a national site. I advertise on Zillow to get the leads and for me it’s well worth the money spent,” Smith said.
He received two leads Wednesday morning (March 12) and one of those came from an interested buyer for his own listing. Smith said if that potential buyer purchases that listing his commission will be $15,000, versus $7,500 if another agent finds the buyer.
King and Smith said using the third-party sites for added exposure is a necessary evil today as so many consumers crave information.
‘NO, THANK YOU’
Dou, a top selling agent at Keller Williams in Bentonville, says “No thank you,” to supplying Zillow or Truila her listing information. She cited issues with the zestimates and other inaccuracies that keep her from using these third-party sites.
“I personally do not like Trulia or Zillow. We try to educate our buyers where to search online and where not to search. Both of these are on my ‘no’ list,” Dou said. “I have had several listings that appear on both of these sites as rentals when they are actually only for sale. Scam artists have hacked in and posted these as rentals.”
Instead of giving away her listings to a third party, Dou and her husband Jerry have set up her own sites that are tied into the local MLS and use other technology applications. She said marketing properties is the name of the game in real estate sales, but that doesn’t mean you have to play ball with inaccurate sites like Zillow and Trulia.
Dou also utilizes YouTube, Facebook, Craigslist, ActiveRain, Pinterest, Real Estate Blogs and many other portals to get her listings in front of as many buyers as possible.
As for national real estate sites, she said Realtor.com is not too bad as it is usually up to date.