The news about the acquisition of Trulia by Zillow seems to have increased focus on Realtor.com’s ad campaign emphasizing the importance of data accuracy to the consumer, no small matter if you are truly interested in what property is for sale in your marketplace. And of course, the majority of people discussing it are real estate professionals.
In a recent post of Facebook my friend Leslie Ebersole asked an important looking question;
The most recent NAR-Move ad for Realtor.com emphasizes the importance of data accuracy. But in this selective view of data accuracy it means that Realtor.com (presumably) accurately reflects the data in the MLS. This benefits members of the agents and broker community who belong to the MLS. But what about all the other data in housing? What the neighbor’s houses sold for, trends, FSBOs, houses that are soon to be listed. Aren’t those also important?
It’s important looking for a couple of reasons. It mentions sources of real estate data beyond the MLS, and invokes in the question the consumer’s interests. But in reality, none of that information is really important to the buyer of real estate. Sold information without being able to interpret that information is knowledge without wisdom, and not truly relevant to a potential purchaser of real estate. FSBOs (For Sale By Owners) end up listing almost 9 out of 10 times, and will, when they are truly committed to the sale of their home, be in the MLS with the rest of the marketplace. Homes that are soon to be listed, like the FSBO are properties that will be exposed through the MLS when they are ready to be shown (and I’ve talked about that before so I don;t want to raise the same arguments again)
The only people that need “sold” data, “FSBO” data. “Coming Soon” data, and “defaulting property” data are the portals that are looking to throw “chum” in the water to attract consumer eyeballs. Chum, if you’re not a fisherman, are the unwanted fish parts that are collected and thrown out to attract sharks. And like those unwanted fish parts, these other streams of data are just so much garbage being strewn in the water to hook unwary prey.
My brokerage firm advertises on all three portals currently, and like every other agent in the US, I constantly field calls about properties that have inaccurate information on Zillow and Trulia (though I will say the information on my listings was more often inaccurate on Zillow than Trulia – don’t know what will happen with that now – possibly nothing). And even when the information is inaccurate, when a consumer interested in purchasing a property calls me, my advertising dollars have been well spent. Once I have a contact from a consumer, what happens from there on is up to me and the consumer. And that means that their strategy is working – because if the site is has the appearance of accuracy and there is enough chum to get them to the site in the first place, Z&T can get paid by their real customers, the real estate firms and agents that pay to advertise their.
The situation is no different than an agent advertising in a well read newspaper in their market that was a journalistic train wreck – if the phone is ringing the advertising is working. But for people who would rather advertise in the New York Times than the New York Daily News Realtor.com does have an edge. One might assume that there are consumers who also want to know that they have the most accurate information, and that Realtor. com might have an edge their as well, if they can get enough consumers to believe the facts!
Zillow, Trulia, and even Realtor.com are advertising sites. They are not driven to do anything but attract consumer attention. Their motivations are commercial, appropriately so now that they are publicly traded companies with responsibilities to their shareholders. They don’t need to worry about whether the consumer buys or sells real estate because they aren’t in the business of real estate. They are in the business of selling potential buyers and sellers to real estate professionals. As long as they have a large enough number of unique visitors and a large enough number of real estate agents and companies willing to pay them for the email addresses or phone numbers of those visitors, they will stay in business, without changing the consumer experience of the real estate industry in any significant manner. And as long as real estate people have spare time, they will serve as a magnet for discussions by those agents every time they do anything.