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Online home-appraisal site only a shopping tool
By Sheila Watson
Contributing Writer
A new Web site, Zillow.com, is an online tool that is attracting attention in the real estate industry not only for its home-valuation tools and capabilities, but also for the players and investments involved.
Zillow’s chief executive officer is Rich Barton, one of the creators of Expedia.com, the online site that shook up the travel business a few years ago. He and co-founder Lloyd Frink secured $32 million in venture capital financing for Zillow, with the majority of the money from Benchmark Capital, Technology Crossover Venture and other private investors.
Zillow.com is a sort of Kelley Blue Book for homes, allowing the user to type in an address and see specs on the home, everything from date and purchase price of the last sale, to its current valuation, to data on comparable homes.
The service is free. Revenue will be produced by ads on the site.
“Our ultimate mission is to put great information and tools in the hands of everyday consumers,” Barton said.
The question is whether those tools are practical and accurate.
The data Zillow.com provides, such as previous sales prices of similar properties, is information that real estate agents do not display in the public multiple listing service. The site also includes price appreciation or depreciation in a form that resembles stock charts.
“This is merely a resource available for consumers and Realtors,” said Jim Peters, CEO of the South Carolina Association of Realtors. “Consumers have to put in perspective that this data is not necessarily accurate and that it may create unreasonable expectations. Sites like this provide additional information to the vast resource of information already out there.”
Zillow uses software to offer a free home-value estimate. In that respect, the “zestimate” service tries to perform one of the functions of the real estate agent, although unlike other real estate Web sites, such as Realtor.com, run by the National Association of Realtors, it does not try to match users with agents.
“There is way too much variance in the numbers to be considered something the consumer can rely on,” Peters said. “I would recommend that you don’t discount it, just add it to your resource list. Still, there is an overwhelming amount of data out there. If anything, Zillow is going to add to the confusion for consumers, and they will still need to have the information verified by a real estate agent.”
The site is considered “in beta form,” meaning it is still being tested, and reviews of the site so far have been mostly negative.
For instance, the home of a real estate agent in Seattle was Zillow-priced at $429,000, although it had been appraised two weeks before for $510,000.
“Big difference,” the agent said. “It’s not reliable, and it’s misleading to consumers.”
Additional concerns over the Web site developed when, within days of its launch, servers on the site crashed after being swamped by viewers.
Zillow.com spokeswoman Amy Bohutinsky brushed off the incident, saying the site had experienced “some capacity issues” because people lingered on the site longer and requested more pages than the company had planned.
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