Even before the digital paint has dried on Zillow.com, a real estate valuation site that launched in beta form in February, an alternative site has sprung up at RealEstateABC.com. Both sites offer home-price estimates to consumers at no charge and without requiring any form of registration.
The new valuation tool, ABC Values, draws from a database of public property records for about 60 million U.S. homes and 20 million home-sale transactions. Acquired in 2005 by Internet Brands, RealEstateABC also features a national directory of real estate agents and an archive of real estate articles for consumers. Zillow.com, the brainchild of Expedia.com founder Richard Barton, also taps into public records for its data on a comparable number of properties.
Internet Brands was founded in 1998 as CarsDirect.com, and that site remains the company’s preeminent Web brand. Among the company’s other Web enterprises: Autos.com, LoanApp.com, LoanStore.com, BestRate.com and VacationHomes.com.
Zillow’s pre-launch silence generated a range of anticipation, speculation, consternation and agitation within the real estate industry, as some real estate professionals expressed worries that the new company would focus on tearing down the traditional business model while others expressed hope that the company would help the industry become more efficient. Zillow’s launch quieted many rumors and eased tensions, as the business model is both consumer-centric and agent-friendly.
RealEstateABC.com takes a similar approach, and seeks to generate ad revenue from agents who are featured in its directories and to steer consumers toward other Internet Brands sites. Both Zillow and RealEstateABC integrate property search results with interactive maps. There are several other sites that offer home-price estimates, though typically these tools require consumers to enter some personal data and do not offer such up-front access to nationwide property data.
While ABC Values has been in the works for several months, the company did not formally announce the tool until today.
“The mission of RealEstateABC is to inform consumers about the whole home buying and home selling process. We believe strongly that having an informed point of view about value is a big part of that equation,” said Robert M. Brisco, CEO at Internet Brands. Brisco, who joined Internet Brands in 1999, formerly served as president for Universal Studios Hollywood and CityWalk, and as senior vice president of advertising, marketing and new business development for The Los Angeles Times.
“Our primary revenue stream for the site will continue to be Realtor advertising. We have one of the strongest Realtor directories already on the Internet and we will be increasing the exposure of the brokers and agents on the site around the valuation tool to bring them more traffic to their own Web sites,” he said.
The agent directory has various tiers, from a free directory listing to a paid listing. After searching for the value of a specific property, site users can choose to search for a real estate agent in that area.
Chuck Hoover, senior vice president of marketing and business development at Internet Brands and a former consumer marketing executive at Homestore.com, which operates several property-search sites including Realtor.com, said that any resemblance to the Zillow business model is coincidental.
“This was developed in a vacuum from Zillow. We had no idea what they were doing. There were rumors about (Zillow representing) some big evolutionary change to real estate that would reinvent the way real estate was bought and sold. They came out with something similar to what we were already working on,” Hoover said. “They were developed on independent paths.”
Amy Bohutinsky, a Zillow spokeswoman, said the launch of another valuation tool is more proof that consumers are hungry for real estate information. “I think what you’re seeing is evidence that there’s a great consumer search for more information on the Web, and consumers want data that’s traditionally been very hard to find online for free. Valuations and data on 60-plus million homes is a first step on what we see as a marathon of opportunity to give consumers tools and processes. This is our first step. Seeing other sites out there develop consumer tools and information is a great thing.”
Zillow officials were not aware that RealEstateABC was developing the valuation tool, she said.
In designing its valuation tool, RealEstateABC sought feedback from real estate professionals, Brisco said. The interface with the ABC Values tool allows users to tweak the comparable properties in arriving at a value estimate, and to estimate the local real estate market conditions and change the physical attributes of a home such as the square footage. These changes can be saved for that user’s session at the Web site but will not be changed for other site users.
“Our emphasis with this site is to empower the user to inform themselves and come to their own conclusions. We decidedly stepped away from taking any approach that implied omniscience on the site’s part of knowing everything,” Brisco said.
“Each home at some level truly is a snowflake with its unique characteristics. It just varies so much property to property that we wanted to create a user-friendly interface for people to fine-tune all the things they know about their home or the one they’re considering buying. Customizable factors obviously make a very large difference in home appraisal. We took great care to build the tool as a starting point for valuation.”
A statement at the Web site notes that the ABC Values tool uses “methodologies similar to those used by Realtors, brokers and appraisers — although we highly recommend that you consult local professionals to obtain an expert opinion. There is no substitute for deep local market expertise.”
The site typically generates 30 comparable sales for each subject property, and users can edit this list of comparable properties by selecting and deselecting other comparable properties. The ABC Values tool features a Google-based mapping platform that identifies a subject property with a distinct icon that resembles a blue house. Comparable properties are listed on the map with reddish house-shaped icons, and other properties in the area that sold within the past five years are posted on the map as beige house-shaped icons.
In addition to single-family detached homes, the site also provides data on co-ops, condos and rural properties, Brisco said.
“One of our primary areas of focus moving forward will be in developing tighter, more expansive advertising opportunities for Realtors, more tightly integrating with their Web sites and their needs … giving them more space on the site to present their unique services,” he said.
RealEstateABC offered a preview of its valuation tool to the public Wednesday, and Web traffic to the site doubled from its norm. Zillow saw very robust Web traffic in its first month of operation. ComScore Media Metrix, a company that measures Internet traffic statistics, reported that Zillow.com collected about 2.77 million unique users in February. This total ranked fifth in the real estate category that month, comScore reported, besting sites such as AOL Real Estate, Yahoo! Real Estate, RE/MAX International Inc. and Century21.com.
Deborah Fallows, a senior research fellow for the Pew Internet & American Life Project, which produces reports that explore the impacts of the Internet, said real estate valuation tools such as Zillow are “a no-brainer” for the Web.
“It is representative of people looking for similar kinds of applications in other kinds of industries — this works for music, this works with cars, so why doesn’t it work with homes?” she said. “People in all these industries are looking for opportunities like this. People are becoming a lot more comfortable with doing things on the Web. I think it’s perfectly natural timing for things like this to pop up.”
The travel industry provides a good example of an industry that has opened up to consumes online, she said. “At the beginning not that many people were brave enough or comfortable enough to go to places like Travelocity and Expedia. Now there are lots of them,” she said.
A home purchase is obviously a very big investment, though, she noted, so there is more at stake in this regard and consumers may want additional help in using or interpreting the information. Just as in health care, a medical professional can provide some context and assistance to information that consumers are finding online, Fallows said. “This is a great tool for people but you have to use it wisely, especially for such a large-ticket item.”
Change is here, Fallows said, and real estate professionals will no doubt “figure out that they should embrace (the change) because it’s going to be here to stay…and adapt their practice to incorporate it.”