Zest for Zillow: Competition for real estate listings enters Digital Age
March 23-29, 2020
By Melody Turner
NAR, local realtors say most homebuyers now find home online
As more prospective homebuyers take their search into the digital world, competition is ramping up as the new generation of consumers use virtual tours, online listings and mobile devices to enter the real estate marketplace.
Recent data from the National Association of Realtors shows that half of home buyers find their homes online, whereas only 28% find a house through a real estate agent. Zillow Group, a publicly traded online database founded by former Microsoft executives, now promotes that it is the leading online real estate marketer with over 110 million listings across the U.S.
The Seattle-based company forecasted it had over $8 billion visits and 196 million unique users in 2019. Furthermore, real estate agents spent over $8 billion in advertising for referral leads for 2019, the company said.
Besides Zillow, Realtor.com is the online consumer website for NAR, which represents 1.4 million members across the U.S. In Arkansas, NAR members include the statewide Arkansas Realtors Association, along with local associations such as the Little Rock Realtors Association, North Pulaski Board of Realtors, Faulkner County Board of Realtors.
Lisa Leggett, co-owner of Aspire Realty Group of Little Rock, said she uses social media for advertising and has never paid for ads on Zillow.
“There might be a buyer who is only looking on Zillow who will never see your listing, so we have to push it out there and Zillow gets [the listing] for free,” said Leggett. “We try to push our buyers to our website or realtors.com which is fairly correct, but Zillow is not.”
She explained Zillow can be inaccurate because it lists preforeclosures. These are properties that are unlikely to be listed because the banks would rather the current homeowners pay off their mortgages than to foreclose it.
“I have to tell people preforeclosure is not a thing. We don’t really like Zillow, [and it’s a sentiment shared] industry wide,” said Leggett. “I have never met [an agent] who says, ‘Oh, I love Zillow.’ But the [agents] who do advertise on it say they get good buyer leads from them.”
Vilonia homeowner Emily Clements and her husband, Triston, said they did most of their house hunting on Zillow and their real estate agent scheduled viewings.
“We started looking for homes in May, and we didn’t find and close until September [of 2019],” said Clements. “I would recommend Zillow because it is convenient, there’s an app and it will send you alerts. But I feel like there are downsides to any app because sometimes it isn’t updating quickly, the information isn’t right and people are really good at taking photos, but they can be misleading.”
Leggett added that pictures have become more important because people are searching online for real estate properties. Along with Zillow’s nationwide real estate database, Redfin, Trulia and Homesnap also offer similar online map-based listings with photos.
“Pictures are everything and real estate agents are hiring professional photographers. In the past, the agent would see pictures the realtors took on their phone and it wouldn’t matter because the realtor would look past bad pictures,” she said. “But now, if your pictures are not good [your property] won’t be shown.”
Shayla Bowman, administrative assistant for Mark Russell Williams at Keller Williams Realty of Conway, said Zillow and other online real estate firms have sped up the process of buying and selling houses.
“Zillow has made the industry go by faster because consumers have an app they love and can check all hours of the day,” said Bowman. “If a listing goes on the market, you can get into the house quicker because of the 24/7 access.”
However, she concluded Zillow can cause buyers and sellers to be misled if they are not working with an agent.
“It can be confusing for buyers who don’t know they can have houses that aren’t for sale in their for-sale feed, or the person Zillow has for contact at the bottom of a listing won’t be the person who listed the house,” said Bowman. “It can be good for some agents if they are the ones purchasing the leads, but it can also lead to confusion because those estimates are not always accurate either so it can pose a problem for buyers and sellers when negotiating prices.”
Keller Williams has launched its own app, KW, to compete against tools like Zillow, and Bowman said it is her new favorite real estate app.
“You can map out your commute to work or search by school district and it is similar to Zillow in a lot of ways, but you’re not going to run into false information like on Zillow,” said Bowman. “It simplifies the process, it’s free to use and once it’s fully rolled out, it will be awesome [because] it can get more specific.”
For John Meriweather, a real estate investor in Conway, Zillow is a tool to market his properties.
“I have used Zillow to sell by owner because it is a money saver for everyone involved,” said Meriweather. “I feel like Zillow is more of a buy owner [market] and has more name recognition and it is easy to use. Zillow gives you direct access to home values so you can do your own rough market assessment to make sure you understand the market dynamics and to stay in the reasonable range.”
But, Meriweather also said Zillow can expend a lot of time and an agent can help make the process faster.
“You are going to spend more time as a buyer on Zillow without an agent because they can prescreen things for you,” said Meriweather. “As a buyer, you have to be diligent and committed to know it’s hard to understand what you are potentially looking at buying.”
He also said agents can be beneficial if a person wants to sell their property more quickly.
“I [recently] sold a high value house in Centennial Valley [in Conway], and I had it on the market on Zillow and an offer fell through,” said Meriweather. “Then, I connected it with an agent, and I had an offer before the pictures were taken. It was sold for $30,000 more than what it was listed for on Zillow.”
Meriweather said Zillow allows him to focus on what he is interested in buying because he can be specific when setting up notifications, like specs or price per square foot.
“I know people who love the alerts [on Zillow] because they like to know what the market is doing and to understand it over time, even if they are not looking to buy in the moment,” said Meriweather. “Zillow has transferred more power to the individual [because] they have the information at their fingertips.”
A Faulkner County appraiser also said he agrees information is more accessible in the industry now than what it was 40 years ago, which will have a positive effect on the market.
“I know for a fact there is more and more information out there on the internet through places like Zillow or Homesnap,” said the appraiser, who wished to remain anonymous. “There is getting to be more ways for the general public to research online and search for sales and what stuff is selling for and to do their own comparisons before they buy or sell.”
PHOTO CAPTION: (Photos provided)
DIGITAL homebuyers Realtors wrestle with fast-growing online real estate hawkers.