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Zillow to Acquire Trulia for $3.5B

dealbook.nytimes.com

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Re: Zillow to Acquire Trulia for $3.5B

#131

Post by swalsh »

imjk wrote: post #113
swalsh wrote: post #52

Earlier quoted context omitted.

I bought my house through Red Fin. Though zillow gave some interesting data, the Red Fin experience was much better. In fact because the market is so competitive here (Boston) it was a big leg up. Our house was listed on a Wednesday morning, with an open house scheduled for Saturday. Since redfin had the most up to date feed, i got an email alert right away. That night we got an early tour, and we put a bid in at lis…

Just out of curiosity, which Boston neighborhood do you live in? I feel like it's such a seller's market in Boston right now, I'll probably wait it out a year before I decide to buy.

i'm in Hyde Park. We bought last July, so I have no idea what the current trend is.

Re: Zillow to Acquire Trulia for $3.5B

#132

Post by nl »

roel_v wrote: post #123
cookiecaper wrote: post #117

Earlier quoted context omitted.

Economists have a tendency to overlook data that is difficult to quantify. In the short term, a real estate agent may make more money by rushing a sale, but on a macro level, he does himself a disservice. Real estate agents need to become your friend and engender loyalty so that you'll recommend them and so that you'll use them again when you sell your new house. Every hour spent with a client and every dollar knocke…

We sold a house last year. I had read Freakonomics so I thought I was going to outsmart everybody (which I knew was a stupid to think from the start, of course). Turns out most real estate agents (the ones we talked to at least) weren't even financially literate enough to even understand the concept . At some point I tried to explain to one the Freakonomics theory. He always kept saying 'the more I sell, the more com…

This is very true - although I think the "non-rational actor" argument needs some thinking through.

The Freakonomics model completely misses the fact that most agents don't often have enough houses to sell for the time spent on each one to be a constraint.

Given that, in many circumstances it really does make sense for the agent to spent an extra few hours working on your house if it will get you another 10K, because they get a small amount of money from that. It's true the marginal gains aren't high, but often they simply have nothing else to do!

Additionally, "working on your house" often means meeting more people who are interested in buying. Very often, some of those people will be looking for an agent to sell their house, so the agent sees that as an advertising opportunity.

Re: Zillow to Acquire Trulia for $3.5B

#133

Post by w4 »

roel_v wrote: post #123
cookiecaper wrote: post #117

Earlier quoted context omitted.

Economists have a tendency to overlook data that is difficult to quantify. In the short term, a real estate agent may make more money by rushing a sale, but on a macro level, he does himself a disservice. Real estate agents need to become your friend and engender loyalty so that you'll recommend them and so that you'll use them again when you sell your new house. Every hour spent with a client and every dollar knocke…

We sold a house last year. I had read Freakonomics so I thought I was going to outsmart everybody (which I knew was a stupid to think from the start, of course). Turns out most real estate agents (the ones we talked to at least) weren't even financially literate enough to even understand the concept . At some point I tried to explain to one the Freakonomics theory. He always kept saying 'the more I sell, the more com…

> He always kept saying 'the more I sell, the more commission' - the concept of 'time value' was completely foreign to him. Maybe he was just playing dumb, I don't know.

He probably wasn't. That having been said, the inability to understand abstract concepts like the time value of money and being a kickass salesman are not mutually exclusive. Some of the best agents I've met aren't what I'd call bright, but they're quite successful and have incredible sales skills that smarter agents lack.

> Anyway, in my experience, most agents are happy wasting a bunch of time on a sale - having coffee to discuss 'the status' (2 viewings scheduled for next week, the one from last Monday seemed genuine - could have send me a 2 line email.

This isn't remotely irrational -- you just don't understand his purpose. What he's doing by spending 45 minutes chatting with you, in leu of a 2 line email, is building a relationship with you and giving the transaction a more personal touch. These are the kind of soft sales skills that are critical to being a successful agent, since despite the existence of sites like Trulia or Zillow, the majority of your clients will come not from online advertising but from word of mouth. So sure, a 2 line email might have sufficed, but a 45 minute chat where he tells you funny stories is going to leave you feeling a lot better cared for (because, well, you are), and leaves you more inclined to recommend him to your friends in the future.

Plus, you said it's a bad market. It's probably not the case that he has clients banging down his doors, so he needs to make sure that his existing clients are well cared for to ensure future business.

Re: Zillow to Acquire Trulia for $3.5B

#134

Post by lsc »

chatmasta wrote: post #23

I interned for Redfin last summer. This is a really interesting space, and most people don't realize that Zillow/Trulia are operating drastically different businesses from Redfin. Some background: The US real estate industry is broken up into regions (e.g. SF bay area, Orange County, Lake Tahoe, etc.). In order for a brokerage [1] to operate in a region, it needs to employ agents specifically licensed in that region,…

>BUT, only brokerages have access to MLS feeds.

A long time ago, I worked for a small real-estate ASP. Now, their target was websites for realtors. They didn't have any direct-to-consumer stuff. Real-estate agent and you want a webpage? give these folks $20-$100 a month, depending on features.

My understanding of our model was that we got access to the MLS data in the customer's name, then wrote scripts to go from the format that one MLS used to our format and let agents from that area list stuff on their website.

Now, while I was there, we didn't have any kind of cross-region search setup, and maybe there would be a legal barrier to doing so... but they sure did have a whole lot of MLS data.

That's the thing. Yeah, every MLS uses a different format, but from experience? once you get in the swing of it, you should be able to write import scripts for several different MLS formats in a single day. It's not actually difficult work. Most of them were some variant on CSV or XML, and the customers are super tolerant of errors, because the MLS data itself was full of errors.

I guess what I'm saying is that at least getting all the MLS data isn't as hard as it looks. I'm not saying it's trivial, but it's the sort of thing, I mean, legal barriers aside, that I could do in a few years with me, a PFY and a salesperson who has real-estate contacts. I'm sure that if you had competence and money, you could do it in a reasonable amount of time.

Re: Zillow to Acquire Trulia for $3.5B

#136

Post by w4 »

balor123 wrote: post #105

A question for the RE insiders here. What restrictions are there for building services off Redfin/MLS and Zillow listings? Am I allowed to blog about listings or do I need to be an agent to use image and listing data? I get mixed opinions elsewhere about whether this falls under fair use. I notice that Redfin provides OpenGraph annotations but the TOS disallow sharing. Am I permitted to share on Facebook, Pinterest,…

You need an attorney for these sorts of questions, not a real estate insider. These are IP and contract concerns, not real estate concerns.

Re: Zillow to Acquire Trulia for $3.5B

#137

Post by personZ »

rahimnathwani wrote: post #22
IgorPartola wrote: post #12

Having bought real estate, I can say that Zillow/Trulia are both a blessing and a curse. They are great in that you can see what's been listed for a while, scan a map, and generally put a pretty interface on house searches. This I imagine is their great advantage. I also found my mortgage company through Zillow's mortgage rate search. Their big disadvantage is that their records are not updated as fast as the convent…

they provide a hugely invaluable service What is that service? I'm not being snarky; I'm genuinely curious, as the structure of the industry (and fee level) is significantly different than where I'm from. I don't get why you need a real estate agent to help you buy.

I'll give some counterpoints given that so many others are supporting real-estate agents.

1) Real-estate agents make money on sales completing. Their primarily financial goal is to complete the sale. Whether this means that you are overpaying (or, for a seller's agent, are under-asking), or are buying a home that isn't right for you...that often matters less than simply closing the deal.

2) Never trust or take a recommendation for a home inspector or other service recommended by the agent. The home inspector has the motive of keeping the agent bringing the recommendations, and this means avoiding having findings that will compromise the deal. Remember, the agent only makes money when the sale completes, so if they spool someone along to buy a house, convince them to overpay to get a sale done, and then bring in the "best" home inspector they know to close the sale, that inspector had better not throw a wrench in it. Always consider conflicts of interest, and there is an enormous one if you use the agents contacts.

3) The legal work -- the bulk of the paperwork, and covering your back legally and so on -- is, in many jurisdictions, done by a lawyer, not a real-estate agent who is only responsible for the most cursory of forms. And that lawyer and his team of paralegals, who do all of the title checks and bank processes and the final close...they get a small fraction of what the real-estate agent gets.

I find real-estate agents to be a profound anachronism. Sure, someone with neighborhood and pricing knowledge is of value, but is that worth tens of thousands of dollars? Is there anyone who would seriously argue that pricing makes sense?

Re: Zillow to Acquire Trulia for $3.5B

#138

Post by Zelphyr »

encoderer wrote: post #128
Zelphyr wrote: post #107

Earlier quoted context omitted.

I also am hoping Redfin wins this battle but, in part, for a different reason. The model that Zillow/Trulia work on is rife with scammers. I almost got caught up in one myself on Zillow. And were it not for the bad PR they get that'd be more than happy to allow the scam listings since that only generates more page views for them. Even notifying Zillow of the scam listing wasn't enough to get it removed. I had to keep…

> And were it not for the bad PR they get that'd be more than happy to allow the scam listings since that only generates more page views for them. This is really cynical and, honestly, just not true. Last year, for example, we (at Trulia) rolled-out enhanced rental fraud detection that, overnight, took down the number of published rental listings by a significant amount. And many of our metrics -- leads sent, value c…

I should apologize[] and clarify; when I said, "they" I meant Zillow. I've been quite happy with Trulia and I'm honestly dismayed (or at least cautious) that the merger is happening simply because I'm worried the policies will lean towards the Zillow way of doing things rather than the Trulia way.

Now that I re-read my original post I guess it does seem to lump Zillow and Trulia together too much. Again, my apologies.

Re: Zillow to Acquire Trulia for $3.5B

#139

Post by rahimnathwani »

caw wrote: post #68
chaosphere2112 wrote: post #37

Earlier quoted context omitted.

I'm in the process of buying my first home, and it's been hugely helpful to have an agent. Services include: - Tours of homes; seeing something online and seeing something in person is an impressive difference. Some houses look amazing online and terrible in person, or vice versa. Cannot possibly overstate the value of this. - Negotiation; he's a professional negotiator, and he has years of experience negotiating in…

I'm also in the process of buying a home for the first time, and did some search on Trulia/Zillow. It was OK, but the data gets really stale. One home was sold already before it was taken down. I did find out that Houston has a really nice site, har.com that lets you do basically everything Trulia & Zillow does. Realtors have other interface(s) into the same data, which lets them do different things like N sided poly…

Agents are getting roughly 3% of the sales price.

In the US, agents get roughly 6% of the sales price. The sellers's agent gets 3%, and the buyer's agent gets 3%.

In the UK, agents get roughly 1.6% of the sales price. The seller's agent gets 1%-2.5%, and there is no buyer's agent. There are other costs (survey and lawyer fees) but these are not large either, and aren't related to the price of the property.

Re: Zillow to Acquire Trulia for $3.5B

#140

Post by hkmurakami »

cookiecaper wrote: post #117
ssharp wrote: post #75

Earlier quoted context omitted.

Yes, that was the argument in Freakonomics and they're completely right. The real estate market can be extremely receptive to low prices, so if you list your house very low, you're likely to sell it much faster. The bulk of the money the agents make will come from the part of the house that could sell very easily. If a house could sell for $200,000 today, but you have to have it listed six months before it could sell…

Economists have a tendency to overlook data that is difficult to quantify. In the short term, a real estate agent may make more money by rushing a sale, but on a macro level, he does himself a disservice. Real estate agents need to become your friend and engender loyalty so that you'll recommend them and so that you'll use them again when you sell your new house. Every hour spent with a client and every dollar knocke…

Seems like the classic "relationship business" vs "transaction business". I would hypothesize that higher net worth individuals and more affluent neighborhoods will promote relationship style brokers.
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