Editor’s note: A new wave of online real estate innovators is gathering force, offering consumers more interactive and comprehensive online home searches and more transparency in property data and transactions. In this three-part report, we explore how newcomers like Zillow, Trulia, HomeThinking, PropertyShark, Redfin and others are bringing a new focus to the online consumer. (See Part 1 and Part 3.)
A new wave of online real estate innovators is gathering force, offering consumers more interactive and comprehensive online home searches and more transparency in property data and transactions.
The first Web generation of real estate companies – Homestore, LendingTree and others – served consumers as well, supplying such things as house values, information about what homes are for sale, and the opportunity to shop around for a lender and real estate agent.
Now, a panoply of newcomers – Zillow, Trulia, HomeThinking, PropertyShark, Redfin and others – brings a new focus to the online consumer. Though both generations disseminate real estate information, the differences between them are critical.
“There is more transparency,” said Lockhart Steele, publisher of Curbed.com, a real estate blog that launched in New York in 2004. “There is more of an invitation to use one of their services. The first generation of services had a very specific idea of what they wanted you to do. You were going to go to their Web site and they were going to turn you into a lead. You had to register, you had to be dedicated about what you wanted to accomplish on their site.
“The second generation is wide open,” Steele said.
At Zillow, the latest of the newcomers to arrive, “Our fundamental bias is toward the consumer. As we talk about product, features, messaging, we think about the consumer first and what would they want,” said Jorrit Van der Meulen, vice president of Zillow, which offers free home-value estimates and data on more than 60 million houses in the United States.
“We make a big point of it on our homepage. The information is free to you and nobody is going to contact you if you don’t want them to contact you,” said Van der Meulen.
Zillow’s beta version allows consumers to anonymously look up home value estimates without registering their name and contact information.
This stands in marked contrast to first-wave online companies such as HouseValues, as Rick Aristotle Munarriz, a longtime writer for consumer investment site The Motley Fool, discovered recently.
Munarriz checked out Zillow, then HouseValues and wrote about his experiences in a March 1 Motley Fool column, “HouseValues Losing Shingles.” He said his assigned HouseValues Realtor “was quick with his assessment, and it was pretty much what Zillow had claimed my home was worth six months ago. Yet Zillow didn’t nag me after that initial estimate — it didn’t even know who I was.”
“My assigned HouseValues Realtor, on the other hand, e-mailed me a few more times and then sent over a folder with a waxy photo of my home and snazzy copywriting, as if it were already on the market. … once my wife pointed out how you could see my car parked in the driveway, I started to feel violated. It’s hard to explain the feeling that you were being watched without your knowledge or permission,” Munarriz wrote.
HouseValues could not be reached for comment on Munarriz’s article.
The column pointed out a huge difference between old-line innovators such as HouseValues and the new generation – often, by giving their personal information on such sites, consumers are sharing it with agents looking for clients, and may not realize this until they have done so.
HouseValues in October launched consumer real estate portal HomePages.com,
a Web site designed to drum up more business for agents while supplying consumers with new house-hunting tools.
Another difference: the latest generation of innovators claims to be more technologically advanced.
“Sites like Realtor.com and HomeGain have been essentially the same for the last five years and the Web has moved on and consumers’ expectations have grown significantly over that period,” said Pete Flint, the CEO of Trulia.com, an online home-search site for consumers.
“Part of the rationale of building our service was that we didn’t feel we were being served well by the incumbent players,” said Flint. “Their user interfaces were not as good as you could find in other industries. Information wasn’t available.”
Consumers who go to HouseValues can request estimates of their home’s value, but can’t do the calculation on the site. Rather, a real estate agent who provides the estimate later contacts them. On Zillow, the consumer enters the information and gets an estimate on the spot.
“Alexis de Tocqueville, a political thinker, said that once you begin giving a group of people rights, that process goes toward its natural conclusion,” said Redfin’s Kelman. “They get more rights. I think that’s what’s happening in the industry. People talk about what’s efficient or inefficient and focus on the transactions, but I think what is frustrating is the information.
“If the Internet has taught us one thing, it’s that people want to directly exchange information without wanting to talk to anyone,” Kelman said.
“Amazon has reviews, TripAdvisor lets people write blogs, eBay has dialogues and you can ask sellers questions. The idea that a person can post a question to a seller about his house is beautiful and harmless and yet it’s unthinkable in our industry today, and there’s no good reason,” Kelman said. “I think it’s going to happen this year. Well, Redfin wants to do that (allow potential buyers to question sellers), and I’m sure more parties want to do that.”
Curbed’s Steele seemed to agree with the idea and even took it further.
“I’d be more interested to see the Zillows of the world interact more with the users,” Steele said. “Once you found your house, you could add more information. You could tell us what you paid for your house or what you got for your house. Zillow could be like a Wikipedia for real estate.
“They have a map of the entire country beautifully done. Why don’t you turn those users of yours into writers and editors and commentators?” Steele said.
“That’s where you get real transparency, when you let your users comment about things, mar things up. The more transparent you can be, the better a business you can run. By adding another layer of transparency, you add user trust. And that’s a good thing for a business,” Steele said.
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