By Yinka Adegoke
When 32-year-old lawyer Elaine Lippmann and her husband were planning
to buy a new home, they used the Web to find a wealth of information
that would have been almost inaccessible just a few years ago.
The Silver Spring, Maryland, couple is part of the fast-growing ranks
of U.S. home buyers who are turning to the Internet.
Online research tools helped them find key information about the area
and the best ways to commute to Washington. Through the Internet,
Lippmann also chose a real estate agent with a helpful Web site of its
own.
But consumers like her might soon be using an even more comprehensive
Web site called Zillow, whose founder hopes to revolutionize the way
people research their home buying and selling.
According to Nielsen/NetRatings, about 15 percent of the active
Internet population visited a real estate or apartment site last
April, up 26 percent from a year earlier.
This helped convinced Rich Barton, who founded travel site Expedia and
sold it to IAC/InterActiveCorp in 2003, to return to the dot-com fray
this month with Zillow http://www.zillow.com , backed by $32 million
of venture capital.
The free service, which is funded through advertisements from local
suppliers, is completely independent from real estate agents.
It doesn't feature any property listings. But in the same way that
Expedia took the mystery out of ticket pricing, Zillow allows
consumers to find out key data on neighborhoods and calculate the
value of their homes.
And unlike Web sites like Housevalues.com http://www.housevalues.com ,
which require users to fill in contact information so that a real estate
agent or mortgage broker can call with a detailed estimate, Zillow allows
them to do it all online.
"We're opening this thing up, allowing anyone to come in and use it to
get smarter," Barton said.
To put its valuations in context, Zillow provides aerial photos of
neighborhoods, showing prices of other homes along with charts and
graphs with historical data and price movements of the property in
question.
A quick search in a wealthy neighborhood in Marlborough, Connecticut,
for example, showed home values, or "Zestimates," that start at
$451,000. But that was only the beginning.
Besides the usual details such as number of bedrooms and baths, square
footage, etc., Zillow tells you when the property was built, what kind
of heating and cooling system it has, the type of roofing and even the
construction quality.
For instance, the site says the most expensive home in the Marlborough
neighborhood was built in 1984 on 1.15 acres (0.46 hectares), with
three bedrooms and 2 1/2 baths. Property taxes were $6,310 in
2004. This one-story house, which sold for $470,000 in June 2004,
ranks in the top 10 percentile for its zip code.
Exactly how much is the home worth now? Zillow lists it at nearly
$630,000, but acknowledges the value could range from $553,000 to
$754,500.
The accuracy of the Zestimates depend on historical data such as tax
records and sales history -- and access to that data can vary from
county to county.
The site is also still in its test stages, said Barton, who said the
estimates currently have a 7.2 percent margin of error. He expects
accuracy to improve as more up-to-date information becomes readily
available.
Meanwhile, homeowners who feel some the details about their house are
out of date can simply update the information and see how that affects
the Zestimate.
With Zillow, Barton is now competing with IAC/InterActiveCorp, which owns
such leading real estate sites as RealEstate.com
http://www.realestate.com , LendingTree http://www.lendingtree.com and
Domania http://www.domania.com .
Kim Gorsuch-Bradbury, senior vice president of networks at
RealEstate.com, said research showed that as many as 80 percent of
consumers begin their search for property online.
"It's a logical place for consumers to search and educate themselves,"
she said.
Does this mean the traditional Realtor role is becoming redundant or
just evolving?
"The premium has shifted to agents being an expert on the area," said
Gorsuch-Bradbury, whose site has partnerships with hundreds of real
estate companies across the country.
Corus Home Realty Chief Executive Michael Gorman said trends at his
own company, which covers Washington and its suburbs, illustrate how
the business is changing.
"More than half of our business comes in through the Internet with
partners including RealEstate.com and RealtyNow.com," he said. Corus
also buys search engine advertising links on Google and Yahoo to lead
to its own site http://www.corushome.com .
Still, Gorman doesn't think that traditional real estate agents are
headed for extinction.
"These sites have great exciting information as a starting point," he
said, "but there are too many other factors such as improvements to
the house that might not be recorded or general expertise on a local
area."
Despite the growing popularity of do-it-yourself Web sites such as
forsalebyowner.com http://www.forsalebyowner.com , most listings --
even on the Internet -- are through real estate agents. Most people
need a dedicated professional to help them through the buying and
selling process.
Even Internet-savvy Elaine Lippmann relied on Corus to close the deals
for her home and for her parents' new house six months later.
The National Association of Realtors says sites like Zillow and its
own Realtor.com http://www.realtor.com add value by offering more
than just property listings such as interactive maps and integrated
mortgage calculators.
"Listing sites are a dime a dozen now because they don't differentiate
your site anymore," said Mark Lesswing, the association's vice
president for Realtor technology. "You need to supplement property
listings with local information, mapping, blogs to educate the
consumer."
Copyright 2006 Reuters Limited.
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Yinka Adegoke (reuters@telecom-digest.org)