Sellsius real estate marketing blog

No matter how much they tout their sites and how cutting edge they are .. the bottom line is that no one really knows real estate values like a local real estate agent. Even Glen Kelman at Redfin had to finally admit that selling real estate was a lot different then making an airline reservation.

Their use of the buzzword transparency is what I find a bit sleazy. They define transparency to suit their needs, not the consumers.

And yes, only an experienced pro on the ground knows how to value this unique asset.

If you were an advertiser Joe, these numbers would mean something to you. You're not our target customer so you're excused for not getting it ... but really, if you're going to have an opinion on this stuff, please try to understand what's going on here.

Publishing reach metrics is simply good merchandising for a web site. We are not trying to try to impress you, Joe, and this number is not supposed to mean anything to you. We are not trying to make a comment on the state of our business with this metric so please stop misinterpreting these numbers that way. We are simply using the industry standard metric to explain our product to our advertising customers.As you know, our competitors make a lot of wild claims but reach is an indisputable way to communicate to our advertisers the benefit of partnering with an industry-leading service like Zillow.com. This "merchandising" is the equivalent of putting your wares out in the storefront window - and if you think we shouldn't be doing that, you're simply horribly wrong.

I hope you now finally understand that this has nothing to do with bragging about business performance. Please stop misreading these metrics as a comment on the state of our business. Or at least know that when you do, you're being a dumb-azz.

Glad you have admitted that the advertiser is your target customer--- not the real estate broker, agent or CONSUMER or HOMEOWNER. Pity. But at least you're being transparent.

Of course, publishing metrics is good marketing for advertisers but you tout metrics on your blog-- read by consumers and professionals--no? So aren't you trying to impress (market) to these non-customers as well. In any case I'm not concerned about what's good for your advertising customers but what;s good for CONSUMERS & HOMEOWNERS-- so you're excused for not getting that.


"Please stop misreading these metrics as a comment on the state of our business"

You miss the point, my friend. The issue is transparency and Zillow's real disrespect for the concept, using it to suit its needs in getting ad money but not in serving the public, IMO. Zillow is transparent about metrics but not profitability (or dismal failure) and, more importantly from the users' perspective, Zillow is not transparent about MLS coverage-- implying you think the consumer is the dumbazz.

In the name of transparency, please publish your local MLS coverage percentage.

Getting peope to Zillow by issuing press releases about the "zestimate" of the White house draws visitors to the site alright. I am sure realtors and advertisers alike love those types of serious home buyers!

Zillow is like a Monopoly Game, it's fun to play, but not REAL! Consumers are going to figure this out soon, and all these national online companies trying to brush a broad stroke on real estate information and values, are going to be put back in the box and under the bed. Real Estate IS LOCAL and LOCAL it will stay.

This is purely anecdotal but, I think, representative of the reason why Zillow has such reach:

I have an active listing that the Sellers recently agreed to have appraised by a real, live, licensed appraiser who came to the house, in person, and provided an objective value based on the subject property, the comps, general market conditions and the appraiser's experience and education. In other words, a real appraisal vs a "Zestimate".

The real appraisal is $47,500 under the "Zestimate". That's right: the "zestimate" is Forty Seven Thousand Five Hundred Dollars off the true value of the property that a mortgage company or bank would use to provide financing for a purchase.

Now, if I were a home owner, I would certainly like the "Zestimate" price better. I'd probably tell all my neighbors and friends and co-workers and family members (who may go to Zillow to check out their own homes). It's only when the rubber hits the road and you deal with real numbers that consumers finally realize that Zillow's teasers are an illusion and cruel hoax perpetrated on the consumer in order to attract more advertisers.

That about sums it up, Ken. Nothing like real life to put things in perspective.

Now, you would think (& I've told this to the Z-men) that Zillow would offer homeowners the option to connect with an appraiser and local agents to get a discounted appraisal and free CMAs. The owner could then publish the appraisal and CMA values giving buyers are more complete picture based on actual examination of the property. But here's the brand benefit-- Zillow and the homeowner become virtual partners (& homeowners hire agents/brokers). No real estate portal, except the FSBOs, have partnered with homeowners. But this idea goes over their heads.

In this way, the homeowner becomes invested in Zillow bc. currently they are adversaries trying to get Z to remove or correct zestimates, which Z steadfastly refuses to do. Pity the lack of trust of homeowners.

To Louis: I have now seen the same comment you made across probably 5 blogs on my RSS feed (about the Z White House). Is your own company going under (homegain is it?) and you are trying to get a job at Trulia by picking on Zillow? I didn't see that particular campaign, but a quick trip to Z and looking up their White House page shows that the traffic to that page is nothing to write home about so your claims of diluted traffic are easily refuted by using a TRANSPARENT page view metric on Zillow. Granted, they probably got a great press coverage and branding out of it and this was a shrewd business move.

To JFS: How about you ask Mars (makers of Snickers, M&M etc) for their profit and revenue numbers... Both Trulia and Zillow are private businesses and I don't think care about your interest in their finances. Second: why asking for MLS coverage? If you were my agent and didn't help me look outside of MLS (FSBO, forclosure etc) I would FIRE YOU! Last I checked Zillow, Redfin have fsbo + forclosure... trulia only FSBO, realtor doesnt have either. The truth is that in order to find everything for sale today one needs to check many sources!

Advertising is a tough business model, but I am rooting for these companies as a consumer and real estate investor. I hope they make it, because unlike you it seems I like to get access to a free consumer based AVM and a ton of market information, and not just rely on an agent, who in my experience sometimes knows less than I do... perhaps I am ranting, and I mean no disrepsect, but just the fact that someone pays the fees and takes a few classes and becomes "REALTOR" does not mean they are the oracle all of the sudden. I have met some great agents and a great deal of Realtors that probably belonged at a local used car sales lot.
Same goes with assessors. The reality is that the actual value of a house is what someone is willing to pay at any given time and the example house might sell 20K under the Zestimate and 20K over the assessor value mentioned above... should I demand my money back from the assessor? Or scream at Zillow?

I like reading your spunky blog posts JFS but instead of picking on Trulia and Zillow I would go after the dinosaurs of your industry (realtor, lead gen homegains etc). I would love to hear your opinion on them!

Thanks for your comment REJunky. I appreciate your strong opinion-- you have a right to it. No disrespect taken. And heck, you can rant here anytime. God bless America and freedom of speech.

You are right that Trulia and Zillow don't have to show me their P&L statement... or their traffic. But I believe the notion of transparency, which these folks embrace, should extend to disclosure of local MLS coverage-- why not? I think it's better than disclosing median error rates for a city (which in no way helps a buyer evaluate a specific home). But, in the end, you are right-- folks do have to go to different real estate sites to get the most comprehensive coverage-- hopefully they know to do this-- and they ought know to do it if the MLS coverage were disclosed. Heck, I could be wrong but that's the way I see it.

Most of my problems with Zillow stem from my belief it violates certain homeowner/seller rights. http://tinyurl.com/2dvcxf I've advocated from day 1 a homeowner "opt-out"

Here's one of my big problems with Zillow zestimates--- I think it is unfair to homeowners to put a computer guess next to their homes which is grossly inaccurate, especially if the homeowner has the house listed for sale. IMO, such a zestimate is false and misleading and CAN cause buyers to pass over the home. If it was my home for sale, I'm sorry but I'm screaming at Zillow-- "Take your guess price off my lawn where I have my for sale sign". It's interference with my marketing. Again, it's the way I see it as a homeowner. (Any appraisal is private to the homeowner & not on the web, unless he or she choose to put it out there)

I've been to the Z discussion boards and owners are pissed about this. http://tinyurl.com/2dvcxf Now, you can call homeowners wrong for wanting it, but I support an opt out for the zestimate when a home is for sale. As an aside, in the DOJ settlement (section II 5(c)(which did not apply to Z directly), it was recognized that sellers have the right to opt out of AVM (and Q&A). http://tinyurl.com/cra6zb

Re: Realtor.com-- It's from 2 years ago but here's a post on Realtor.com complaints: http://tinyurl.com/cjeze7 (disclosure: I'm not a Realtor).

As a real estate agent, I'd use all the sites but I'd want to know-- where do I get the best ROI-- is it Realtor.com Trulia or Zillow or somewhere else? I'd spend more time where I got the best results.

Re: Lead gen companies. I think they have value to newly licensed real estate agents and those that have relocated to a new market. Even experienced real estate agents I have spoken with have had success with companies like HomeGain. But like any lead generation, the quality of leads is a risk factor (same w/ Trulia & Z) so you need a good system for filtering them. Then, and here's the key element, you need a conversion strategy. If you don;t know how to convert a lead, it matters not who you use to get it.

But stop and think about it for a minute-- isn't everything a real estate agent does to market and advertise, a form of lead generation? Whether you pay for a billboard, a postcard, an ad, or spend time blogging, on T Voices or using social media--- all that is time and money spent for leads. With HG, you pay for the leads and spend the rest of your time cold calling, or on Z Advice or in the bath tub (thinking of new marketing techniques). Even though it's a 4 letter word, I think the word "lead" has gotten a bad rap. It's a stigma as was attached to Used Cars before they became "certified pre-owned vehicles". To me a lead is a person with a need.

I can't speak to every lead gen company but from what I know of HG, its a month to month deal with no fixed contract term-- cancel at any time . I know they have several marketing programs to choose from. No torture is involved.

In any case, I say, give everything a chance (incl. lead gen) and go with what works and abandon what doesn't --- for you.

PS: I agree with you that a few classes and a Realtor designation is no guarantee of quality, trust, honesty, experience or knowledge. But we'd both defer to an experienced pro over a computer AVM any day. Folks just need help finding those pros: http://cli.gs/RRjTus

"I think they have value to newly licensed real estate agents and those that have relocated to a new market. Even experienced real estate agents I have spoken with have had success with companies like HomeGain."

Joe the vast majority of our customers are NOT newly licensed real estate agents but rather seasoned professionals like Erick Pakulla,Mitch Ribak and Zip Realty
http://blog.homegain.com/agentevaluator/2008-to...

From Zip realty's most recent annal report:
HomeGain, Inc. generated approximately 21% of our leads and Google represented approximately 16% of our leads during the year. HomeGain competes with us for online customer acquisition. In addition to paid lead sources, in 2007 we attracted approximately 37% of our leads directly to our website, which involved no direct acquisition costs.

Also "cold calling" is NOT a feature of HomeGain's marketing systems