Should you Trust Zillow or your Local Real Estate Professional?

Consumer Choice is Important

Zillow announced a new policy to exclude properties from their platforms if any other form of public marketing outside of the MLS is used.

Property owners should have choice in how they market their property. And, threats by Zillow are a desperate attempt to limit consumer choice.

I believe that in the long run, this will only make Zillow less valuable to consumers and their share holders. Let me explain why.

As more brokerages implement alternative marketing strategies based on our clients' choices and best interest, we may find a significant amount of listings available only off of the MLS feed - at least for a period of time. This is what is frightening Zillow.

Zillow uses MLS feeds to get clicks, hide the listing agents information, and sell buyer leads to other agents.

If your neighbor is selling their home and has been listed on the MLS - but they started as an exclusive or coming soon listing with a brokerage off of the MLS - Zillow's site will restrict it from appearing on their sites.

That means that when you open the Zillow app to look at your neighbor's listing, you won't see it. If you're really curious you're probably going to search on the Internet or look at other sites in order to see the listing. This is going to be frustrating for a lot of people.

Over time, consumers won't trust that they can find listings on Zillow's platform. That will mean less clicks, less buyers seeking referrals from Zillow, fewer other agents paying Zillow for leads, and lower profits for Zillow.

As real estate professionals we need to stay focused on providing the best marketing options for our clients based on our clients' choices. As fiduciaries, we act in our clients best interest and maintain the highest professional standards.

Zillow's AVM consistently distorts pricing because their model doesn't understand local markets.

For example, their AVM doesn't know how to calculate the difference between 2 homes built in the same year, in the same Zip Code. House A is updated in like new construction condition. House B looks like it did when it was built 30 years ago with dated finishes and in need of restoration. Zillow's AVM calculates a similar price point for these 2 homes. But, the done-up home sells for $1,000,000. House B is sold off market to my buyer after I speak to the seller and am connected to their agent. I negotiate a fair price on behalf of my buyer.

Zillow thinks that my buyers paid $300,000 less for the property than their AVM predicted. But, in actual fact my buyers paid a fair market price because it will take more than $300,000 to upgrade House B to be similar to House A.

Zillow asserts that off market sales sell below what their AVM would predict. This epitomizes the essence of GIGO (Garbage In Garbage Out) data analysis.

Local real estate professionals can never be matched by computer algorithms on any platform.

Erik Terreri

Compass / DRE# 02169525