Zillow.com
Encyclopedia
Zillow is an online real estate database that was founded in 2005 by Rich Barton
and Lloyd Frink, former Microsoft
executives and founders of Microsoft spin-off Expedia
. The website uses a proprietary algorithm called the "Zestimate" to appraise property values based on undisclosed factors. Sellers can use Zillow as a marketing tool by appraising their properties, posting property information such as improvements and access to major roads; and comparing nearby property value appraisals. Buyers can freely access and track such information online. The website currently tracks 100 million valuations throughout the United States.Zillow was ranked in the top 300 U.S. sites in terms of traffic by Alexa
. It has encountered controversy over alleged appraisal licensing violations in some states and the degree of inaccuracy and alleged inconsistencies of its appraisal algorithm. When the results of its appraisal algorithm are challenged and requests for corrections are made, Zillow states that it cannot change the estimate because it pulls in data from other sources and further states that the changes have to be made by the customer by going to the source(s) of the information. Zillow thus absolves itself from inaccurate estimations of a property's value.In addition, Zillow's lack of reliability is primarily because it cannot take into account any form of property renovations, condition of properties, upgrades to the property in the form of landscaping, roofing, kitchen improvements, etc. Therefore, two houses standing side-by-side with similar square footage and number of bedrooms are valued at the same price on Zillow, regardless of condition.
In February 2011, Zillow and Yahoo! Real Estate launched an exclusive partnership creating the largest real-estate advertising network on the web, according to comScore Media Metrix.
On July 6th, 2011, Zillow announced terms for its IPO. They plan to raise $45 million by offering 3.5 million shares at a price range of $12 to $14 with a concurrent private offering of $5.5 million to existing investors.
(API) and developer support network.
In December 2006, Zillow launched three new pieces of functionality: allowing users to post homes for sale and set a "Make Me Move" price (an informal way to pre-market a home), as well as a real estate wiki
. In 2007, Zillow teamed with Microsoft
to offer Bird's Eye View, a feature in Microsoft Virtual Earth, that shows (in certain areas) clearer aerial photographs taken from airplanes rather than conventional satellite imagery. Zillow uses this functionality for entertainment-focused features on famous homes.
In December 2009, Zillow expanded its services to include the rental market. The addition of rental listings enabled users to list a home for rent and search for both rental homes and homes for sale.
According to a summary of Zillow Mortgage Marketplace written by Bernice Ross from Inman News on May 25, 2009, Zillow has improved the online loan application process by doing the following:
On March 18, 2010 Zillow introduced a free Zillow Android App. The app uses GPS technology to find and follow users on an aerial map, and displays home values, home details, historical data, for-sale and for-rent listings, photos and recently-sold data on the homes around them. Home shoppers can filter their home searches by sale price, rental price, number of bedrooms/bathrooms and listing type. Users can also search for homes and neighborhoods utilizing the Android platform's voice search capabilities. The app is available in the Android Market.
On April 2, 2010 Zillow launched the free Zillow on iPad App. The app enables home shoppers and real estate professionals to search and browse cities and neighborhoods on a large touch-screen map with information on all homes, including those for sale or rent. In addition to map-based searching,users can view large images of multiple homes side-by-side; flick through preview photos of home versus another, or pick a home and browse large, nearly full screen images. Favorite homes can be synced with Zillow.com and the Zillow iPhone app for later viewing. Zillow on iPad is available at the Apple App store.
On March 31, 2011 Zillow launched a Zillow Blackberry App. The free location-based app shows users home valuations, for-sale and for-rent listings, recently sold data and allows people to filter searches and see results on a map, satellite and street view. The Zillow Blackberry App can be found at Blackberry App World in the "shopping" category.
Zillow also releases a Homeowner Confidence Survey. The survey is conducted by Harris Interactive and measures homeowners' perceptions about home value changes of their own home and the local market.
In March 2011, Zillow released Rent Zestimates, which provide estimated rent prices for 90 million homes on both the Zillow website and all of its mobile apps.
On June 14, 2011 Zillow changed its algorithm used to calculate Zestimates. In addition to changing the current Zestimate for millions of homes throughout the country, Zillow changed historical Zestimate value information dating back to 2006. This resulted in drastic changes in both past and present Zestimate values for millions of homeowners.
studied the accuracy of Zillow's estimates and found that they are "often are very good, frequently within a few percentage points of the actual price paid. But when Zillow is bad, it can be terrible."
According to Fortune
, "Zillow has Zestimated the value of 57 percent of U.S. housing stock, but only 65 percent of that could be considered 'accurate'—by its definition, within 10 percent of the actual selling price. And even that accuracy isn't equally distributed." Fortune
cites the state of Louisiana as an example, where "the site is just about worthless".
In October 2006, the National Community Reinvestment Coalition filed a complaint with the Federal Trade Commission
stating that Zillow was "intentionally misleading consumers and real-estate professionals to rely upon the accuracy of its valuation services despite the full knowledge of the company officials that their valuation Automated Valuation Model (AVM) mechanism is highly inaccurate and misleading." In a letter dated May 4, 2007, the FTC elected not to investigate this complaint, which was later withdrawn by the NCRC.
Real estate broker
s state the site does not give an accurate reflection and that other factors must be taken into consideration in buying or selling a home. Real estate agents with specific market knowledge are more likely to know specific factors affecting the sale of a home such as the overall condition of the home, room flow, landscaping, views, traffic noise, and privacy. These factors have been called unzillowables, a term coined in the real estate blogosphere
.
Zillow may use the last bank, assessment or sales transaction for home value. Some of this data is very 'old' (over twenty years) and so even home descriptions may be inaccurate (i.e., change in size/structure). This may mislead buyers (who may feel asking prices are way out of range when compared to the 'Zillow price') and work against sellers (because Zillow lists homes as worth far less than the current 'value'--based on Bank/tax assessments and recent sales.)
Rich Barton
Richard Barton is a former Microsoft executive and founder of online travel company Expedia, Inc. and real-estate internet company Zillow.-References:...
and Lloyd Frink, former Microsoft
Microsoft
Microsoft Corporation is an American public multinational corporation headquartered in Redmond, Washington, USA that develops, manufactures, licenses, and supports a wide range of products and services predominantly related to computing through its various product divisions...
executives and founders of Microsoft spin-off Expedia
Expedia
Expedia is an Internet-based travel website based in the US with localised sites for 21 countries...
. The website uses a proprietary algorithm called the "Zestimate" to appraise property values based on undisclosed factors. Sellers can use Zillow as a marketing tool by appraising their properties, posting property information such as improvements and access to major roads; and comparing nearby property value appraisals. Buyers can freely access and track such information online. The website currently tracks 100 million valuations throughout the United States.Zillow was ranked in the top 300 U.S. sites in terms of traffic by Alexa
Alexa Internet
Alexa Internet, Inc. is a California-based subsidiary company of Amazon.com that is known for its toolbar and Web site. Once installed, the toolbar collects data on browsing behavior which is transmitted to the Web site where it is stored and analyzed and is the basis for the company's Web traffic...
. It has encountered controversy over alleged appraisal licensing violations in some states and the degree of inaccuracy and alleged inconsistencies of its appraisal algorithm. When the results of its appraisal algorithm are challenged and requests for corrections are made, Zillow states that it cannot change the estimate because it pulls in data from other sources and further states that the changes have to be made by the customer by going to the source(s) of the information. Zillow thus absolves itself from inaccurate estimations of a property's value.In addition, Zillow's lack of reliability is primarily because it cannot take into account any form of property renovations, condition of properties, upgrades to the property in the form of landscaping, roofing, kitchen improvements, etc. Therefore, two houses standing side-by-side with similar square footage and number of bedrooms are valued at the same price on Zillow, regardless of condition.
Business model
Zillow has stated that it is a media company that generates revenue by selling advertising on the Web site. In April 2009, Zillow announced a partnership to lend its real estate search engine to the Web sites of more than 180 United States newspapers as a part of the Zillow Newspaper Consortium. Zillow shares advertising revenue from the co-branded sites with the newspapers and extends its reach into local markets.In February 2011, Zillow and Yahoo! Real Estate launched an exclusive partnership creating the largest real-estate advertising network on the web, according to comScore Media Metrix.
On July 6th, 2011, Zillow announced terms for its IPO. They plan to raise $45 million by offering 3.5 million shares at a price range of $12 to $14 with a concurrent private offering of $5.5 million to existing investors.
Acquisition
In April 2011 Zillow acquired Postlets, an online real estate listing creation and distribution platform. Terms of the deal were not disclosed.Website features
Zillow has data on 100 million homes across the United States, not just those homes currently for sale. In addition to giving value estimates of homes, it offers several features including value changes of each home in a given time frame (such as one, five, or 10 years), aerial views of homes, and prices of comparable homes in the area. Where it can access appropriate public data, it also provides basic information on a given home, such as square footage and the number of bedrooms and bathrooms. Users can also get current estimates of homes if there was a significant change made, such as a recently remodeled kitchen. Zillow provides an application programming interfaceApplication programming interface
An application programming interface is a source code based specification intended to be used as an interface by software components to communicate with each other...
(API) and developer support network.
In December 2006, Zillow launched three new pieces of functionality: allowing users to post homes for sale and set a "Make Me Move" price (an informal way to pre-market a home), as well as a real estate wiki
Wiki
A wiki is a website that allows the creation and editing of any number of interlinked web pages via a web browser using a simplified markup language or a WYSIWYG text editor. Wikis are typically powered by wiki software and are often used collaboratively by multiple users. Examples include...
. In 2007, Zillow teamed with Microsoft
Microsoft
Microsoft Corporation is an American public multinational corporation headquartered in Redmond, Washington, USA that develops, manufactures, licenses, and supports a wide range of products and services predominantly related to computing through its various product divisions...
to offer Bird's Eye View, a feature in Microsoft Virtual Earth, that shows (in certain areas) clearer aerial photographs taken from airplanes rather than conventional satellite imagery. Zillow uses this functionality for entertainment-focused features on famous homes.
In December 2009, Zillow expanded its services to include the rental market. The addition of rental listings enabled users to list a home for rent and search for both rental homes and homes for sale.
Zillow Mortgage Marketplace
On April 3, 2008 Zillow launched a new service called Zillow Mortgage Marketplace. Borrowers can use Zillow Mortgage Marketplace to get custom loan quotes without revealing personally identifying information, such as Social Security numbers and phone numbers. Borrowers reveal their identities only after contacting the lender of their choice. Lenders can browse borrower requests and see competing quotes from other brokers before making a bid. Zillow verifies every lender's identity, employment and broker license. Each lender has a public profile on the site with contact information, an e-mail link and ratings submitted by borrowers who contacted them.According to a summary of Zillow Mortgage Marketplace written by Bernice Ross from Inman News on May 25, 2009, Zillow has improved the online loan application process by doing the following:
- Buyers can remain anonymous: Both traditional and online lenders normally require extensive information before they will give the buyer a rate quote. Since buyers want to avoid being solicited by a number of lenders, many are reluctant to reveal their identity. Furthermore, buyers are justifiably concerned that multiple inquiries will harm their credit report. In contrast, Zillow gathers enough information to create a legitimate loan quote. They do not, however, require the buyer to provide their name, address, phone number, e-mail address or Social Security number. The buyer remains anonymous until he or she is ready to contact the lender. This also eliminates the hassle of unwanted e-mails and phone calls from multiple lenders.
- An average of 18 quotes: The LendingTreeLendingTreeLendingTree is an online lending exchange. LendingTree is a web-based company that operates an online lending marketplace that facilitates matching borrowers and lenders...
model provides the borrower with four quotes. Zillow provides an unlimited number of loan quotes from thousands of competing lenders. In fact, the typical borrower on Zillow receives 18 loan quotes. Each lender sees the other competing bids. This means great savings for the borrower. - Apples-to-apples comparison: One of the most difficult aspects for consumers is choosing which combination of rates and fees is best for their situation. Zillow requires all participating lenders to divulge their rates plus all fees. This allows buyers to do accurate comparisons. Their system also allows borrowers to filter various loans by rate, fees, monthly payment, annual percentage rate (APR), lender rating, and distance to the lender.
Zillow Mobile
On April 29, 2009 Zillow released a free Zillow iPhone application. Utilizing the iPhone's GPS functionality, the app pinpoints a user's location and shows nearby homes on interactive aerial maps. The app also shows estimated home values, historical property records, for-sale listings, and photos. Zillow's app also offers data on 95 percent of the homes in the country which means iPhone users can look up the estimated value of a home or peruse interior photos of their neighbors' for sale home as they walk, drive, or boat around the neighborhood. In some neighborhoods you can find homes where owners have posted Make Me Move prices. These are often sky-high numbers aimed at house coveters who can not wait for it to hit the market. The application is available at the Apple App store.On March 18, 2010 Zillow introduced a free Zillow Android App. The app uses GPS technology to find and follow users on an aerial map, and displays home values, home details, historical data, for-sale and for-rent listings, photos and recently-sold data on the homes around them. Home shoppers can filter their home searches by sale price, rental price, number of bedrooms/bathrooms and listing type. Users can also search for homes and neighborhoods utilizing the Android platform's voice search capabilities. The app is available in the Android Market.
On April 2, 2010 Zillow launched the free Zillow on iPad App. The app enables home shoppers and real estate professionals to search and browse cities and neighborhoods on a large touch-screen map with information on all homes, including those for sale or rent. In addition to map-based searching,users can view large images of multiple homes side-by-side; flick through preview photos of home versus another, or pick a home and browse large, nearly full screen images. Favorite homes can be synced with Zillow.com and the Zillow iPhone app for later viewing. Zillow on iPad is available at the Apple App store.
On March 31, 2011 Zillow launched a Zillow Blackberry App. The free location-based app shows users home valuations, for-sale and for-rent listings, recently sold data and allows people to filter searches and see results on a map, satellite and street view. The Zillow Blackberry App can be found at Blackberry App World in the "shopping" category.
Zillow Advice
On December 16, 2008 Zillow launched Zillow Advice, allowing people to ask real estate questions online and get answers from the Web site's community of experts. Zillow Advice, linked through a tab on Zillow's homepage, lets users tag questions by topic or geographic area. Users can tag questions by state, city or neighborhood; search questions and discussions by key word; and can note the "best answer" they get. Experts whose answers are frequently voted the best earn points towards a "Local Expert" badge. Professionals also can subscribe to specific locations or topics in their area of expertise, getting email or RSS feed notifications of new questions. Answers link to users' free Zillow profile page. Zillow Discussions and Home Q&A already allow broader discussion topics or home-specific questions and answers.Zillow Blog
Maintained by the employees of Zillow, the Zillow Blog reports on everything from real estate industry market trends, home value information, mortgages, and celebrity real estate.Real estate market reports
Zillow produces home value reports for the nation and over 130 metropolitan statistical areas. The reports identify market trends including, but not limited to: five and 10-year annualized change, negative equity, short sales and foreclosure transactions. The reports are free to download at: www.zillow.com/reports/RealEstateMarketReports.htm.Zillow also releases a Homeowner Confidence Survey. The survey is conducted by Harris Interactive and measures homeowners' perceptions about home value changes of their own home and the local market.
Website activity
The company said it had more than 24 million unique visitors in September 2011, representing year over year growth of 103 percent. Of those users, 90% own a home and more than three quarters are looking to buy or sell within the next two years, helping others to buy or sell or looking to rent. Over 50 million U.S. homes have been viewed on Zillow. In some cities more than 90% of all homes that exist have been viewed on Zillow — this includes San Francisco, Los Angeles, Boston and Seattle. Over 10 million users have claimed and edited property information on the site.Zestimate
Zillow determines an estimate for a house, which it refers to as "Zestimate", based on a range of publicly available information, including sales of comparable houses in a neighborhood. Zestimate does not take into consideration home-specific factors like recent remodeling, although there is an option to update the information for a particular home. The accuracy of the Zestimate varies by location depending on how much information is publicly available, but Zillow allows users to check the accuracy of Zestimates in their own region against actual sales. In many U.S. states, information on the transfer prices of real estate is readily available and accessible by the general public and is not exclusively held in realtors' databases.In March 2011, Zillow released Rent Zestimates, which provide estimated rent prices for 90 million homes on both the Zillow website and all of its mobile apps.
On June 14, 2011 Zillow changed its algorithm used to calculate Zestimates. In addition to changing the current Zestimate for millions of homes throughout the country, Zillow changed historical Zestimate value information dating back to 2006. This resulted in drastic changes in both past and present Zestimate values for millions of homeowners.
Critique of Zestimate accuracy
In 2007, The Wall Street JournalThe Wall Street Journal
The Wall Street Journal is an American English-language international daily newspaper. It is published in New York City by Dow Jones & Company, a division of News Corporation, along with the Asian and European editions of the Journal....
studied the accuracy of Zillow's estimates and found that they are "often are very good, frequently within a few percentage points of the actual price paid. But when Zillow is bad, it can be terrible."
According to Fortune
Fortune (magazine)
Fortune is a global business magazine published by Time Inc. Founded by Henry Luce in 1930, the publishing business, consisting of Time, Life, Fortune, and Sports Illustrated, grew to become Time Warner. In turn, AOL grew as it acquired Time Warner in 2000 when Time Warner was the world's largest...
, "Zillow has Zestimated the value of 57 percent of U.S. housing stock, but only 65 percent of that could be considered 'accurate'—by its definition, within 10 percent of the actual selling price. And even that accuracy isn't equally distributed." Fortune
Fortune (magazine)
Fortune is a global business magazine published by Time Inc. Founded by Henry Luce in 1930, the publishing business, consisting of Time, Life, Fortune, and Sports Illustrated, grew to become Time Warner. In turn, AOL grew as it acquired Time Warner in 2000 when Time Warner was the world's largest...
cites the state of Louisiana as an example, where "the site is just about worthless".
In October 2006, the National Community Reinvestment Coalition filed a complaint with the Federal Trade Commission
Federal Trade Commission
The Federal Trade Commission is an independent agency of the United States government, established in 1914 by the Federal Trade Commission Act...
stating that Zillow was "intentionally misleading consumers and real-estate professionals to rely upon the accuracy of its valuation services despite the full knowledge of the company officials that their valuation Automated Valuation Model (AVM) mechanism is highly inaccurate and misleading." In a letter dated May 4, 2007, the FTC elected not to investigate this complaint, which was later withdrawn by the NCRC.
Real estate broker
Real estate broker
A real estate broker, real estate agent or realtor is a party who acts as an intermediary between sellers and buyers of real estate/real property and attempts to find sellers who wish to sell and buyers who wish to buy...
s state the site does not give an accurate reflection and that other factors must be taken into consideration in buying or selling a home. Real estate agents with specific market knowledge are more likely to know specific factors affecting the sale of a home such as the overall condition of the home, room flow, landscaping, views, traffic noise, and privacy. These factors have been called unzillowables, a term coined in the real estate blogosphere
Blogosphere
The blogosphere is made up of all blogs and their interconnections. The term implies that blogs exist together as a connected community or as a social network in which everyday authors can publish their opinions...
.
Zillow may use the last bank, assessment or sales transaction for home value. Some of this data is very 'old' (over twenty years) and so even home descriptions may be inaccurate (i.e., change in size/structure). This may mislead buyers (who may feel asking prices are way out of range when compared to the 'Zillow price') and work against sellers (because Zillow lists homes as worth far less than the current 'value'--based on Bank/tax assessments and recent sales.)
Name
According to the company, "the Zillow name evolved from the desire to make zillions of data points for homes accessible to everyone. And, since a home is about more than just data - it is where you lay your head to rest at night, like a pillow - 'Zillow' was born."See also
- National Association of RealtorsNational Association of RealtorsThe National Association of Realtors , whose members are known as Realtors, is North America's largest trade association. representing over 1.2 million members , including NAR's institutes, societies, and councils, involved in all aspects of the residential and commercial real estate industries...
- Comparison of real estate websitesComparison of real estate websitesComparison of real estate web sitesSources: http://www.crunchbase.com/ http://en.wikipedia.org/wiki/Zillow.com http://www.compete.com http://en.wikipedia.org/wiki/Redfin by Bloodhound Blog...
- CyberhomesCyberhomesCyberhomes is a real estate website owned by Fidelity National Financial and Lender Processing Services . It lists the most current sales of homes in a neighborhood by similar sales.- History :...
- Eppraisal
- RedfinRedfinRedfin is an online real estate brokerage, currently available in the Atlanta, Austin, Boston, Chicago, Dallas, Denver, Las Vegas, Los Angeles, Orange County, Phoenix, Portland, Sacramento, San Diego, San Francisco Bay, Seattle, and Washington, D.C areas. Redfin combines a real estate search site...
- ZipRealtyZipRealtyZipRealty, Inc. is a U.S. real estate company with licensed agents Founded in 1999, the company operates in 35 major markets in 22 states and the District of Columbia. It is incorporated in Delaware and headquartered in Emeryville, California. The company went public in 2004.-See also:*National...