Home sellers, real-estate agents to get free ads on Zillow
Beginning today, Zillow will allow homeowners and real-estate agents to advertise for-sale properties on its Web site at no cost. The Seattle-based company, which...
Seattle Times business reporter
Beginning today, Zillow will allow homeowners and real-estate agents to advertise for-sale properties on its Web site at no cost.
The Seattle-based company, which rocked the real-estate world this year when it began offering free online valuations of almost 70 million U.S. homes, made the announcement Wednesday evening.
It also announced a feature called "Make Me Move" for owners who'd consider selling if the price were right. If it catches on, this could create a shadow "for sale by owner" market with the potential to bypass formally listing homes or paying agent commissions, which are already under pressure.
Homeowners adding "for sale" or "Make Me Move" data can upload photos, neighborhood commentary and enhanced descriptions of the property, potentially justifying a price higher than Zillow's estimate, or "Zestimate."
Real-estate agents can add contact information and link to their own Web sites for free.
For an industry that's long sought to control for-sale information, "it's a pretty radical approach, although it also seems obvious in a way," said Brad Inman, founder of the real-estate news service Inman News.
Historically, Inman says, online real-estate companies have sought permission from multiple-listing services or real-estate companies to display listings.
Now, Inman predicts, "agents will jump at the chance, particularly in this market," to bypass that step. It's already happening on other sites, such as craigslist, which allows posts of for-sale properties, complete with photos.
"Homes are on the market longer and agents' commission dollars aren't as fat," Inman said. "If someone is going to give them a free alternative online, I think agents are going to flock to it."
A 2004 National Association of Realtors (NAR) study found that Realtors' median income was $49,300, and that they spent a median $1,150 annually on promotion and marketing expenses, although almost 20 percent spent $5,000 or more. This was on top of marketing expenses paid by their parent real-estate companies.
With Zillow offering free advertising, pressure may be put on real-estate agents to cut commissions, which are about 6 percent of the sales price, paid by the seller. On a $350,000, house that's $21,000.
Agents argue that the complexity of real-estate transactions justifies that cost.
Still, online real-estate brokerages, including Seattle-based Redfin.com, have made inroads by offering discounts. Redfin advertises that it saves sellers an average $10,000.
Marketing homes directly was Zillow's plan even before it launched in February, but it wasn't a priority, spokeswoman Amanda Hoffman said.
"There are already so many sites that offer homes for sale," she said. "This just makes our site more complete."
Zillow logs more than 3 million visitors a month. Some 80 percent of all Seattle-area homes have been viewed at least once.
Founded by Lloyd Frink and fellow Microsoft alum Rich Barton, Zillow's goal is to make money through online advertising by lenders and real-estate companies.
Zestimates are based on public data, commonly from county assessors, for single-family homes, condominiums and manufactured homes.
A National Association of Realtors survey found that 12 percent of homes are sold directly by their owners. That percentage has fallen, from 18 percent in 1997, because of the increasing complexity of transactions and the amount of time they take, NAR spokesman Walter Molony said.
"The other issue is security," Molony said. "Anyone with any motivation can come see your house without being prescreened," Molony said.
Frink said he anticipates that most people who post homes will be agents, not homeowners.
The new "Make Me Move" feature is "a fun thing, a bit of an experiment," Frink said.
It will allow people who aren't interested in moving soon to test the market — and their price — without having to officially list their home or to provide direct contact information. Zillow is providing an anonymous filter for that.
Redfin.com is considering adding a similar feature soon. It may do so early next year, a company spokeswoman said.
Elizabeth Rhodes: firstname.lastname@example.org