Business model
Zillow has stated that it is a media company that generates revenue by selling advertising on the Web site.[3] 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.[4]
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.[5]
Acquisitions
In April 2011 Zillow acquired Postlets, an online real estate listing creation and distribution platform. Terms of the deal were not disclosed publicly.[6]
In November 2011, Zillow acquired Diverse Solutions for $7.8 million. [7]
In May 2012, Zillow acquired RentJuice, a software-as-a-service company which allows landlords and property managers to market and lease their rental properties through a set of online tools. RentJuice was acquired for $40 million. [8]
On October 31, 2012, Zillow acquired the real estate shopping and collaboration platform, Buyfolio. [9]
Zillow acquired Omaha based mortgage technology company Mortech for $17 million on November 5, 2012. [10]
On November 26, 2012, Zillow acquired HotPads for $16 million. HotPads, founded in 2005, lists real estate and rental listings on a map-based web interface. [11]
On August 19, 2013, Zillow acquired StreetEasy for $50 million.[12]
On July 16th, 2014, Zillow acquired Retsly, a Vancouver, B.C.-based startup that helps developers access real-estate data from multiple listing services (MLS).[13]
Website features
Zillow has data on 110 million homes across the United States, not just those homes currently for sale.[citation needed] 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 interface (API) and developer support network.[14][15][16]
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.[17]
In December 2009, Zillow expanded its services to include the rental market.[18] The addition of rental listings enabled users to list a home for rent and search for both rental homes and homes for sale.
In late 2013, Zillow began powering AOL Real Estate. In July 2014, Zillow also took over the real estate portal for MSN Real Estate.[19]
Zillow Mortgage Marketplace
On April 3, 2008, Zillow launched a 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.[20] 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.[21]
According to a summary of Zillow Mortgage Marketplace[22] written by Bernice Ross from Inman News on May 25, 2009, Zillow 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 LendingTree 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 an iPhone application. Using the iPhone's GPS, the app pinpoints a user's location and shows nearby homes on aerial maps. The app also shows estimated home values, historical property records, for-sale listings, and photos. Zillow's app has data on 95 percent of the homes in the country.[23][24]
On November 27, 2013, Zillow released Windows 8.1 application. You can do everything you would expect, such as search for available places, view details, and see the “Zestimate.” Beyond that they have embraced Windows 8 with some new native features. There is a live tile that will update with availability pricing info.[25]
On July 13, 2012, Zillow released Windows Phone application. Using the WP GPS, the app pinpoints a user's location and shows nearby homes on aerial maps. The app also shows estimated home values, historical property records, for-sale listings, and photos. Zillow's app has data on 95 percent of the homes in the country.[26]
On March 18, 2010, Zillow introduced an Android App. The app uses GPS 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 using the Android's voice search.[27]
On April 2, 2010, Zillow launched the Zillow on iPad App.[28] The app enables one to search and browse cities and neighborhoods on a touch-screen map with rental and purchase information on all homes. Features include map-based searching, viewing large images of multiple homes side-by-side; flick through preview photos of home versus another, or pick a home and browse large images.
On March 31, 2011, Zillow launched a Blackberry App. The 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.[29]
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.[30] Zillow Advice, linked through a tab on their 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 note the "best answer" they get.
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,[31] 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.[32] The survey is conducted by Harris Interactive and measures homeowners' perceptions about home value changes of their own home and the local market.
Neighborhood Boundary Maps (GIS Data)
The Zillow data team has created a database of nearly 7,000 neighborhood boundaries[33] in the largest cities in the U.S. and made them available via Creative Commons Attribute-Sharealike license.
Website activity
The company said it had more than 24 million unique visitors in September 2011, representing year-over-year growth of 103 percent.[34][35] 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. Zillow claims over 50 million U.S. homes have been viewed. In some cities more than 90% of all homes that exist have been viewed, including San Francisco, Los Angeles, Boston and Seattle. Over 10 million users have claimed and edited property information on the site. [citation needed]
Zestimate
Zillow determines an estimate ("Zestimate," pronounced "ZEST-imate") for a home based on a range of publicly available information, including sales of comparable houses in a neighborhood.[36][37] 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.[38] 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.[39]
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.[40]
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 Journal studied the accuracy of Zillow's estimates and found that they "often are very good, frequently within a few percentage points of the actual price paid. But when Zillow is bad, it can be terrible."[41]
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."[42] Fortune cites the state of Louisiana as an example, where "the site is just about worthless".[42]
In October 2006, the National Community Reinvestment Coalition filed a complaint with the Federal Trade Commission[43] 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,[44] which was later withdrawn by the NCRC.[citation needed]
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.[citation needed]
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.)[citation needed]
