In the early 2000’s access to property listings was limited to a few websites with the capability to display property listings to consumers from across the country. While there existed thousands of real estate websites, few were able to display all properties.
With realtor.com®, the official listing website for the NAR, as one of the few, it fueled competition from outside the real estate industry from companies looking to capitalize on the need and want of access to property listings by consumers. Consequently, a new set of listing websites that consolidated listing information looked to establish themselves as the go-to site for consumers. Founded as technology companies first, Zillow and Trulia looked to drive their business model by attracting consumers who historically accessed property information directly from REALTORS®.
Realtor.com® is operated by the News Corp subsidiary Move, Inc. on behalf of NAR. Initially created as an extranet for NAR, realtor.com® began publishing property listings publicly in 1996. Realtor.com® was the leader in portal sites until new portals came to play. Since then, realtor.com® continues to dominate real estate traffic, though now falling second to Zillow.
Zillow was founded by Rich Barton and Lloyd Frink, former executives at Microsoft. Barton got the inspiration for funding Zillow when he was working at Microsoft and realized the real estate industry could be transformed. By December 2004, Zillow was incorporated with their website launching in February 2006. In 2010, Spencer Rascoff was named CEO and in February 2015, Zillow and Trulia combined forces to become the dominant real estate portal in the U.S.
Zillow made their name by providing consumers with property estimates known as a “Zestimate.” The popularity of Zestimate helped Zillow drive traffic to their website. But how does it work? A Zestimate is an automated valuation model (AVM), a software-based tool used in residential and commercial real estate to determine property value. AVMs are not new, but Zillow capitalized on consumer interest in understanding values of properties.
From this, Zillow built a loyal following of consumers, but became a divisive site for REALTORS®. REALTORS® often found themselves trying to explain to sellers why the Zestimate was inflated or why the same Zestimate might be undervalued to borrowers. Love it or hate it, Zillow made their name and continued to grow.
Fast Forward to Today
Both portals have entered tertiary business lines such as lead “incubation”, rentals (RentJuice and Avail), transaction management (dotloop), mortgage and even becoming a brokerage. The results have been mixed. As data and services become more ubiquitous, both portals and brokerages alike are testing everything to keep the attention and find ways to extend the lifetime value of consumers.
Listen to Former CEOs of Zillow and realtor.com
On Sept. 28-29 in Los Angeles, at the Innovation, Opportunity and Investment Summit (iOi), registered attendees will hear from previous leaders of both portals. Spenser Rascoff (former Zillow CEO) and Ryan O’Hara (former CEO of realtor.com® and Move, Inc.) will join NAR CEO Bob Goldberg to share what they think the future holds for portals based on their respective experiences.
This is a session you will not want to miss. Join NAR and former realtor.com® and Zillow CEOs in Los Angeles.Pre -and onsite registration is available—Register Today!