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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

#151

Post by GreatHamster »

Zelphyr wrote: post #138
encoderer wrote: post #128

Earlier quoted context omitted.

> 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 apologie…

Trulia guy/lady is right. Your assessment is pretty cynical, and inaccurate. Zillow has a higher volume of fraudulent listings because as of March, it had nearly 2x the market share of Trulia, and a whopping 14x that of Redfin. The listing quality teams work really hard to tear down scams as quickly as possible, but understand that as with any content flagged by users, your report enters a queue and has to be evaluated by a human before any action is taken.

Zillow, like Trulia, also invests a lot in developing their product to prevent, detect, and remove scam listings. To not do so would make the product unviable.

Popular sites are locked into a constant arms race with people seeking to defraud other people. Everyone's gotta make a buck somehow, and fraud is just the unfortunate dark underbelly of commerce.

Edit: Full disclosure—I do work at Zillow, and many of our hackweek projects are also focused on scam detection and prevention. Our objective is to provide the most robust and reliable service to consumers and to connect them with skilled agents, rated by other consumers. In two years I've never seen anyone scoff at a customer complaint or suggest we should ignore something until faced with the threat of "bad PR". I love working at Zillow because, above all, it's full of very decent people. And personally, I'm excited for a potential Zillow/Trulia merger because we all admire them a lot, and we certainly have a lot to learn from each other.

Re: Zillow to Acquire Trulia for $3.5B

#152

Post by nawitus »

mooreds wrote: post #145
nawitus wrote: post #102

Earlier quoted context omitted.

> Is there an inspection period? No. However, the seller is responsible for 'hidden problems' for five years after the sale. I would guess that most of these cases go to court, and are only for serious problems like mold. > Are most homes bought outright, or are loans taken out to purchase them? Loans are typically taken. >Does the seller's agent do any marketing (newspaper ads, open houses, etc)? Yes, the seller's a…

Thanks for answering my questions. I like the idea of the seller being responsible after the sale--that would make most sellers more honest. That tax is interesting--what does it support (national government? city government? schools?)?

The tax is paid to the national government.

Re: Zillow to Acquire Trulia for $3.5B

#153

Post by zeeshanm »

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,…

Market Leader - a company that was acquired by Trulia - provides tools to real estate professionals for obtaining leads. They have local MLS data integrated into their system for easy access to listing data. Not sure if this is entirely true you'd have to be a brokerage to access MLS data.

Re: Zillow to Acquire Trulia for $3.5B

#154

Post by w4 »

roel_v wrote: post #142
w4 wrote: post #133

Earlier quoted context omitted.

> 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 q…

Sure, he was building a relationship, which reinforces the point that he doesn't care about saving a few minutes on a sale, and that he'd rather go out of his way to talk to me/us more than necessary, instead of trying to move his 'dollars per minute' needle up. Whether that's 'irrational' depends on your definition of 'irrational' - it surely is irrational from the point of view of pretty much every economic model o…

You can't apply engineer logic here, which seems like what you're trying to do. It's a sales and customer service business. By spending extra time with you his short term dollars per minute needle might be less than it could be (though this is debatable; he might just legitimately have the spare time, since you said it's a slow market), but his long term dollars per minute needle with do better because of the high level of service he's giving you.

To use a tech analogy, this is like suggesting that Zappos customer service ought to be replace by a knowledge base and automatic responders, since spending all that time and money to have human representatives to make customers happy is inefficient and irrational when it could be done cheaper.

Re: Zillow to Acquire Trulia for $3.5B

#155

Post by rahimnathwani »

wpietri wrote: post #146
rahimnathwani wrote: post #139

Earlier quoted context omitted.

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.

Regarding the US, I think the typical deal is that the seller's agent and broker each get 1.5%, and the same for the buyer's agent. Some agents are their own brokers, but I believe that's rare.

This split is about how the realtor splits their commission with their employer and/or the umbrella company which provides marketing, access to MLS etc., right?

Re: Zillow to Acquire Trulia for $3.5B

#156

Post by NickJohnsonCA »

cjensen wrote: post #54
smackfu wrote: post #27

Earlier quoted context omitted.

Isn't the MLS run by the real estate agents that RedFin is trying to disrupt? >They depend on real estate agents manually inputting their listings into the Zillow/Trulia platforms Are you sure that Zillow isn't just scraping the MLS data from broker sites?

I'm trying to buy a house right now in Fremont, CA. I can confirm that Zillow has errors and omissions whereas Redfin has entirely accurate data. Every Thursday my realtor sends me MLS listings; in every case, Redfin has the new listings.

Hi CJensen! I'm part of the friendly team over at Movoto. Have you tried using us? Send me at email at NJohnson@movoto.com and I'd love to help you in any way possible.

Re: Zillow to Acquire Trulia for $3.5B

#157

Post by adriand »

ngmaloney wrote: post #97
zachanker wrote: post #61

Earlier quoted context omitted.

I worked at Placester for a couple of years and built the system that imports data from real estate agencies. When I left last year, we had coverage with around 90% of the MLS's in the US. Most of what you say is right, but some clarifications and context: You don't need to be a brokerage to get access to the MLS feed. Each MLS has their own policies for how you can display the data, what logos, size and text needs t…

Thanks for all your work on ruby-rets! It works like a champ for pulling in listings from MLSPin and CCIAOR. As you mentioned, dealing with all the "certified" RETS vendors is a nightmare. For the uninitiated (and fortunate), RETS has its own querying language called DMQL which is inconsistent across versions and MLS vendors. Even trivial tasks like importing photos are handled with vast difference across MLS vendors…

Seconded! RETS is a goddamn nightmare. For years we've used librets and it's the worst. When we found your Ruby-only library we got it working with our feeds within the day and I can't tell you how relieved we are not have to deal with librets compilation.

Re: Zillow to Acquire Trulia for $3.5B

#158

Post by ssharp »

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…

I haven't read Freakonomics in several years, but was that essay stating that real estate agents were acting dubiously by knowingly taking advantage of the misaligned incentives, or was it just stating that there were misaligned incentives?

I don't think too many agents are overly crass in their taking advantage of sellers by pushing lowball offers. I think most homeowners can develop a general idea of what their house is worth if they just do basic comparisons, and if they have a mortgage or other obligations they must pay out of the home sale, can develop a halfway decent bottom-line figure. Also, when homeowners meet with an agent, one of the first things they discuss after seeing the property is listing price. The agent is incentivized to provide a non-lowball listing price because the owner has yet to sign a contract at that point and could still be soliciting other agents.

I think the real leveraging of the agents commission structure comes on more borderline decisions. For a $300,000 house, maybe the owner won't accept $275,000, but if an offer for $290,000 comes in, the agent may advocate for that offer just to get the deal done, even if she think a $300,000 offer will come in a few weeks.

Re: Zillow to Acquire Trulia for $3.5B

#159

Post by jessriedel »

mooreds wrote: post #144
jessriedel wrote: post #141

Earlier quoted context omitted.

Noisy reputation systems and customer education are better than nothing, but they pale in comparison to properly aligned incentives.

Brokers (of all kinds) have been around for millenia and will be around for millenia more. There are always consumers who are willing to pay for expert advice and there are always sellers/producers who are willing to accept less than top dollar because they don't want the hassle of dealing with the consumer (which doesn't scale). I think that technology can empower the consumer, but doubt it can empower the consumer…

There are many other options. Here's a simple toy one, designed to eliminate the bad incentives discussed by freakonomics:

Say you have a tiny house that could reasonably sell in the range $90k-$110k, depending on how hard the broker works. If you give the broker 5% of the sales price, then he gets $5k on average, but on the margins he only sees $50 for every $1k he can raise the price by negotiating. So instead, give him 50% of ever dollar of the sales price over $90k. Now he still makes $5k on average (i.e. 50% of the average $10k over the lower-bound of $90k), but on the margins he gets $500 for every $1k he increases the price by negotiating hard!

Needless to say, there are all sorts of other ideas smart people could come up with. Often, the reason these don't work is because they seem complicated, and it's hard as a consumer to assess to broker-fee structure itself (a sort of market failure). But there's a good chance that technology can change this, by making info related to broker fee structures more accessible and more transparent. For instance, data about average broker fees, the distribution of house sales prices, etc. could be collected by a tech start-up, which would have been unfeasible to collect in the past.

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