Zillow Buys Trulia for $3.5 Billion – Can Real Estate Survive?

By | July 28, 2014

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Zillow Buys TruliaLet me start by saying that I personally and professionally like Zillow, Trulia, and Realtor.com. It’s incredibly clear that internet advertising is the most effective form of advertising and at least these companies provide a great centralized medium for agents to advertise. The long and the short of it is that buyers overwhelmingly LOVE these sites, so if we as agents don’t accept them, we’re fighting a losing battle against the trend.

That said, here are some takeaways for interested observers:

Zillow and Trulia are updated automatically through RETS syndication from the MyFloridaRegionalMLS (the local MLS). The problem is that Zillow and Trulia also grab listings from RSS feeds and then guess which feed they want to use (and they don’t always guess the MLS feed, which is the most up to date). Both companies have contracts with other vendors like RealtyTrac and CoreLogic to show unmarketed listings (pre-foreclosure and foreclosure) and their numbers are padded with homes not actually on the market. Because their sources aren’t always updated through no fault of the agent they sometimes get conflicting information and will as a result display outdated info.

Realtor.com, BTW, is the only major national player that gets its listing info directly through the MLS. Contrary to popular belief, it’s not associated with the National Association of Realtors. 

The reality is that individual agent websites using IDX feeds are actually more accurate than Zillow or Trulia but aren’t as user friendly and certainly don’t get the number of ‘hits’ that the big 3 get (including Realtor.com).  If you’d like a great example of an IDX feed that CAN compete and is more up-to-date than the major players, check out www.sarasotahousehunt.com.

That said, I think it’s a bad development within the industry as Zillow consolidates its already considerable hold on internet marketing. They’re a stone’s throw away from displacing MLS’s altogether which risks causing a huge step backwards for real estate transactions. I’m NOT talking about protecting our butts as agents – like all industries, we have to adapt to the times – but real estate sales without MLS rules has a long history of dishonesty and misinformation. Customers don’t know and agents often forget that the MLS is not just our listing database. It’s the binding core that allows us to cross-promote properties, self-regulate our industry, and provide enforceable standards of ethics to which professionals must comply. 

Zillow is the biggest single threat to MLS’s everywhere and if it does indeed displace true real estate brokerage then you’re going to see a lot of swampland in Florida for sale.

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