The XBroker: June 2007

Real Estate and Mortgage 2.0 Who's Behind the Wheel?

Greg Swann penned an article about Zillows recent cryptic announcement of a pending move into the mortgage arenaTrulia is  rumored to be as well, and Redfin now offers a flat fee mortgage service (WHAT A NOVEL IDEA!).

The big Z also recently announced that they will soon enable brokers to feed their listings (and any updates) automatically to their site, probably RSS style.  It’s a logical move for them since their major shortcoming is the inferior amount of actual listings compared to Trulia and other similar players.

 

Here was my comment to Gregs post:

 

On the mortgage side, if your Spidey-Sense is correct Greg, the fundamental problem with Zillow’s approach is that the accuracy and quality of information is still in the hands of the service providers that are spewing the data. By spewing I mean vomitous waste.

 

Zillow already allows Bankrate and LendingTree to advertise on their site…both perpetrators of grievous misinformation practices, with pending and settled litigation cases to back it up. So I doubt they’re concerned with the ethical standards of other 3rd party providers and the information they provide.

 

I fear that Zillow’s plans will only cause further confusion and misinformation for consumers in the market for a mortgage and/or related information. Zestimates have proven to be guesstimates at best, but are pretty innocuous by themselves. However, coupling cursory housing values with similar quality financial and interest rate data would produce some monumentally miZleading information.

 

This is what happens when a ‘real estate company’ is run by Tech Geeks…Don’t get me wrong, I like Tech Geeks and love technology, however, improper automation in the real estate and mortgage service industries does far more harm than good…

 

After all, this aint the travel agent industry were trying to improve ;)

 

 

In case the travel agent reference went over your head, Rich Barton and Lloyd Frink (Chairman/CEO and President of Zillow respectively) were also the founders and management core of Expedia.com.

 

As I punched the final key strokes to my comment my ADD led my mind away to think of why no one in such a well funded Company stopped to think about the methods behind their madness.  Although I no longer sell real estate (for other people) and rarely originate mortgages, as a business owner serving the real estate and mortgage industry’s, these proposed roll-outs aren’t solutions, especially since the problems revolve around fragmented, closely held, and/or highly manipulated information…disinformation, if you will.

 

That being said, I went poking around the ‘About Us’ pages of Zillow and Trulia to see who is driving these Mack trucks of Real Estate and Mortgage 2.0…

 

Note:  I applaud Zillow, Trulia, and the host of other Real Estate and Mortgage 2.0 players in the market.  I don’t think they mean any harm and are genuinely trying to provide a better experience for the consumer or professional, depending on which site you go to.  The real estate and mortgage industries were/are in great need of fresh innovation, better technology, and out of the box thinking.  These guys (and gals) are providing what they perceive as valuable services.

 

From Zillow’s ‘Who We Are‘ page:

 

"Rich and Lloyd gathered together an experienced group of senior managers and board members to help get Zillow rolling. Great people tend to attract other passionate people, and a truly outstanding and constantly growing team was assembled around a simple, powerful idea in very short order. The team included real estate professionals for insight into the industry and statisticians to analyze those zillions of data points. We set up shop in downtown Seattle, Washington."

 

 

Of the 17 people listed, 9 are from Expedia (I suppose hotels and resorts are real estate) and only 1 (one) has any type of real estate background:  "Gordon Stephenson is the co-founder and Managing Broker of Real Property Associates (RPA), one of the largest independent real estate brokerages in the Northwest. He oversees more than 40 agents and brokers in their sales activities, and continues to personally represent buyers and sellers."

 

Zillows marketing and technologist positions are as robust as they come, Microsoft would have a tough time trumping this crew.  Call me a cynic, but it appears Gordon is simply propped up as a figurehead.  Running a real estate office with 40 agents leaves little time to consult through the day to day grind that a senior industry guru position at Zillow assuredly requires.  I’m sure Gordons a great guy that oozes real estate knowledge, alas he is just one man.

 

On to Trulias ‘Team Page‘:

 

Founded in 2005 in San Francisco, Trulia is a real estate search company comprised of a seasoned team of technologists, real estate experts, marketing gurus and business leaders focused on developing innovative search technology to create the most direct, informed links possible between real estate professionals and consumers.

 

 

Trulias 5 peson management team also contains only 1 (one) person with industry insider real estate experience:  Sean Black, VP Sales.  "Sean brings hands-on entrepreneurial experience to Trulia in both real estate and consumer Internet services. Before joining Trulia, Sean was Vice President, top-producing broker and member of the Multi-Million Dollar Club at The Corcoran Group, the largest real estate firm in New York City".  Sean’s presence shows via Trulias agent-coddling marketing approach.  Jamie Glenn (VP, Product Management) and Kelly Roark (VP, Industry Development) are both well seasoned in the real estate advertising and marketing verticals but again, have no real industry insider experience.  Not taking away from what they do, but there is no experience like being in the industry grind.

 

Both Company’s and their respective sites are obviously well staffed for their stated purposes, to cash in on the $11 Billion dollar per year real estate advertising market.  Zillow’s mantra is very consumer-centric (although they’re now trying to play nicey-nicey with agents), while Trulia is very agent-centric, being uber careful not to upset the Realtor status-quo.  Both Company’s were/are smart enough to not meddle in commission sharing or lead generation.

 

Both sites are dangerously indescriminent information re-advertisers, the quality of which is 100% dependent on the cottage industry they cipher from.   Based on what we know of the mortgage and real estate industry’s there are plenty of rotten apples who will use these platforms to leverage their businesses and line their pockets (hence my concern with Zillows strategies).

 

They’re also 3rd party destination sites, created in spite of the professionals they purport to serve, likened to a virus…a parasite that must keep it’s host alive to live itself.  As with all parasites, they tap the resources of the host instead of adding to them.  Both would assuredly argue to the contrary, maintaining their services do add to an agents resources…call it a difference of opinion, for now.

 

My concern is that consumers are mistakenly looking at these sites as industry pundits, which they’re most certainly not.

 

Finally, there is the industry punching bag Redfin, which may as well stand for ‘red-headed step child’.  They’re a licensed brokerage with in-house agents, definitely don’t cater to outside agents (at all), and regardless of what the rest of the industry says, are the most in-tune with the Real Estate 2.0 paradigm shift…combining technology and real insider industry knowledge to create a unique business model…ironically their model is restricted in scaleablity to the markets they’re licensed in.  And what happens if the real estate industry shifts away from the traditional % based model?  *Poof* there goes the main value proposition for using them.

 

The evolution of Real Estate and Mortgage 2.0 is still in it’s relative infancy.  It’s important to know who you’re dealing with and what their objectives/agendas are.  Remember, looks aren’t everything.

Comment balloon 10 commentsJeff Corbett • June 17 2007 03:13PM
Real Estate and Mortgage 2. 0 Who's Behind the Wheel?
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Greg Swann penned an article about Zillows recent cryptic announcement of a pending move into the mortgage arena … Trulia is rumored to be as well, and Redfin now offers a flat fee mortgage service ( WHAT A NOVEL IDEA! ). The big Z also recently… more