Debunking 8 Common Myths About Zillow

Most people know not to trust everything they read or hear. Despite that, a number of misconceptions continue to surface about Zillow and its future plans for growth. Jay Thompson, Zillow director of industry outreach, and Ryley Watson, account manager, set out to debunk some of these ideas in a special “myth busters” webinar on Zillow Academy. Here are the highlights.

1. Zillow wants to be a brokerage or an MLS

Zillow is great at building websites, apps, interfaces and other technology. We’re a media company that sells ads, not homes. We don’t know the intricacies of running a brokerage or an MLS — and that’s ok with us. There is an immense amount of infrastructure and bandwidth required to run a brokerage or MLS. Zillow has been in business since 2005. It doesn’t make sense to take everything we’ve built over the years, throw it out the window and change our business model.

https://youtu.be/yCFxzACCFGI

2. Zestimate® home values are always inaccurate

The Zestimate is an estimate, not an exact home value. It’s not designed to replace the opinion and expertise of a local real estate professional. Zillow doesn’t actually visit every home in the nation to account for renovations or custom features. The Zestimate is calculated using an algorithm based on public data. Nationwide, the Zestimate’s median accuracy rate is 8 percent. In some areas, the Zestimate is amazingly close to the actual sold price. In other areas, it isn’t. Errors are just as likely to be above the sale price as below the sale price.

https://youtu.be/QthN7azGdm0

3. Zestimates make agents’ jobs more difficult

The Zestimate actually benefits many agents’ businesses. Top agents know how it’s calculated and know how to use it to win business. Familiarize yourself with how to explain the Zestimate. Use that knowledge to prove your value and local knowledge in conversations with consumers.

http://youtu.be/kaNxLGB0ePE

4. Zillow allows FSBO listings to undermine agents

Love them or hate them, FSBOs are a part of the nation’s available real estate inventory. FSBOs get sold to buyers with agents every day. On the sell side, many agents are successful with prospecting FSBOs for new listings. The reality is that more and more consumers are turning to real estate agents. According to a recent survey, 90 percent of home buyers used an agent to help them buy their home. In 2001, that number was only 70 percent.¹

https://youtu.be/1AdQAdm-_Gw

5. The Premier Agent® program has a poor ROI

Every day we hear success stories from top Premier Agents across the country, raving about the ROI success they are seeing. In April 2015, more than 140 million unique users visited Zillow Group’s consumer brands,² which creates a wealth of opportunities for savvy agents. Zillow Group now has more than 100,000 agents currently advertising — 60 percent of Premier Agent revenue comes from current advertisers buying additional exposure. If the program isn’t working, why are so many agents buying more?

6. Zillow arbitrarily rejects reviews

Zillow has a vetting process for reviews. An actual human being reads every review before it gets published, so it’s true: Reviews can get rejected. The most common reason for a rejected review is because the consumer didn’t include enough detail with the review. Zillow’s moderation team only approves reviews that contain enough information to be beneficial for buyers and sellers. They also make sure reviews don’t contain anything inappropriate, irrelevant or confrontational. Zillow’s consumer-focused review process helps to ensure only authentic information is posted.

https://youtu.be/RD0DnlTTA0A

7. Zillow intentionally keeps stale listings to increase traffic

The last thing Zillow wants is inaccurate listing data. We want to be a reliable source of housing inventory for buyers and sellers. All listings that appear on Zillow are added or sent to Zillow directly from agents or brokers, or submitted via direct MLS, brokerage, or third-party feeds. Agents or consumers who find stale listings on Zillow can flag the home for our listings team to remove. Rest assured, we have a large team of employees devoted to listing accuracy.

https://youtu.be/Oehu5m0j4Rk

8. Zillow wants to eliminate agents

Zillow makes money by charging real estate agents for advertising. Why would we want to eliminate our customer base? Zillow needs revenue from advertising real estate agents to pay the bills. You can’t compare real estate agents with travel agents either. Buying or selling a home has nowhere near the same implications as booking a plane ticket. Consumers need real estate agents to help them with the most important financial decision of their lives. For most consumers, there will always be a real estate agent in the transaction. The decision to buy or sell is just too important, expensive, infrequent and complex to screw up.

https://youtu.be/teDkxnCYNt8

There you have it — eight Zillow myths debunked with facts straight from the source. The next time you get into a discussion about the future of the industry or why Zillow is messing everything up, share these truths and help set the story straight.

To view and register for upcoming webinars, visit Zillow Academy.

¹ “Zillow Talk: The New Rules of Real Estate,” Spencer Rascoff and Stan Humphries
² Internal tracking via Google Analytics and Omniture Unique Visitors data, unduplicated