Zillow, a new online home valuation site for consumers, has a real estate broker’s license in Washington and four other states and is planning to add more, the company confirmed today.
The company, which launched Zillow.com in beta two weeks ago, is exploring options to improve the breadth and accuracy of its data, according to company spokeswoman Amy Bohutinsky.
“Becoming a broker in multiple states is one of the things we are exploring, as regulations and data availability vary by state and we think this could help,” Bohutinsky said in an e-mail.
“We do not plan to be an agent or act as an agent in any real estate transactions,” she said.
Zillow offers consumers free home-value estimates and data on some 60 million houses in the United States. The company gets its data from county records and uses an algorithm to update values daily. The algorithm carries a 7.2 percent margin of error, according to tests performed by company statisticians.
Zillow warns that data in some parts of the country are better than others and offers a ranking of data coverage and accuracy for particular counties nationwide on the site.
Since launching on Feb. 8, many homeowners and real estate agents have complained that Zillow’s estimates, or “Zestimates” of home values are far off the mark, sometimes by as much as $100,000.
Getting a broker’s license in some cases would enable the company access to Realtor-operated multiple listing service data feeds, which could help improve its real-time home valuations.
Seattle-based Zillow, which raised $32 million in funding before launch, currently operates via an advertising model. The company displays Google AdSense ads alongside home data results and is selling banner ads on its site in two different positions. Advertisers can target their ads by ZIP code, with more target options opening up over time, according to Bohutinsky.
Zillow’s CEO Richard Barton created the online travel site Expedia.com in the late ’90s before selling it to InterActiveCorp in 2003. Expedia is credited with transforming the traditional travel industry by using the Internet to offer travel information directly to consumers.
Barton resigned from IAC’s board in February 2005.
Zillow attracted a lot of attention in pre-launch over the last year, with many speculating that the company’s founding team could force drastic change in the real estate industry – which historically has been resistant to new entrants.
Barton in a January interview with Inman News said that Zillow will not operate as a brokerage or agent, though he does expect real estate business models to change over time as consumers become more knowledgeable about the home sale process.
“Consumer behavior has begun to change…people are using the Internet to help them in the (home-buying process),” he said in January. “I’ve found that in other industries behavior change leads the business model change.
“I’m not implying that we have some new commission model figured out, but it feels to us like … Realtor services are going to be unbundled a bit.”
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