Zillow and Unicorns
Information and misinformation has been a problem for our clients and would-be clients for years. The search box runneth over with sites offering real estate “listing” data, and it’s hard (in the words of the more famous Yogi) for the average bear to make sense of it all.
It’s long been a problem, but in the midst of the brouhaha over ARG Realty’s announcement that they were opting out of third party syndication, I suppose I have been paying a little more attention to the whole idea of data integrity lately. In the last week, we have fielded more calls about homes that were not really for sale than I can remember. Buyers are confused. Can you blame them?
A couple of Thursdays ago, I spent some time shoveling through the “active listings” on Zillow. And let me say that this isn’t just about Zillow; I could have easily picked one of hundreds of other third-party aggregation sites for the purposes of my little forensic investigation. But Zillow is becoming what you might call a household word – a household word whose fourth quarter earnings report was a smidge better than my own – so this seemed a logical place to start.
My friend Jonathan Dalton likens searching for homes on the Zillows and Trulias of the Internet to a visit to Mr. Roger’s “Neighborhood of Make Believe.” And since I have a long-standing tradition of ripping off Mr. Dalton’s better stuff, let’s see what was happening in the Neighborhood of Make Believe on February 2, 2012.
Consumer Search Primer
First, a little home search primer is probably in order. Real estate agents (and by real estate agents, I mean me) tend to forget that while we understand the life and travel tendencies of a listing, many homebuyers and sellers may not.
When a home is listed, your agent will enter the information in their local MLS. Through the MLS, all other agents in the area will have access to the vitals including text, photos, show instructions and offer of compensation.
There is also this thing called “IDX,” or Internet Data Exchange. MLS agent and broker members agree through IDX to allow their listings to be displayed along with the listings of all other cooperating agents/brokers on member websites. IDX closely mirrors the actually MLS – I say closely because a broker may always opt out, although they rarely do. So when you search for homes on any local agent or brokerage site with a search feature, including ours, you are looking at an IDX feed which is straight from the MLS to you. By the way (and many agents don’t even get this part) this includes Redfin’s site, because Redfin is a broker. In San Diego, it includes SDLookup, because that too is a broker-operated site. It also includes Realtor.com, because our data is delivered to them through an agreement with our MLS.
Then you have the third party syndication sites. These are multiplying like bunnies, so there are too many to list, but two of the more familiar and frequented sites are Trulia and Zillow. Here, the listings come to roost in many ways. They can be manually input by a listing agent, broker or homeowner. They can be delivered via a “feed” from the agent/broker website or through a listing syndication service.
The important thing to keep in mind is that garbage in equals garbage out. In the case of IDX, the same theory applies, but our MLS’s have policies and procedures in place for policing. They have the authority to insist that data is correct, current and not misused. Not so where the third-party syndication sites are concerned.
By the Numbers
So on with the show. Please keep in mind that I have a day job, as evidenced by the fact that it took me a couple of weeks to get around to writing about this. And because this day job keeps me pretty busy, I didn’t have the luxury of plowing through data for an entire region. I limited my search to one Zip code: 92131.
On a morning when the Sandicor Multiple Listing Service (MLS) showed 48 detached homes for sale in the 92131 Zip code, Zillow showed (drum roll) 224! In their defense, that’s only off by 367%. Close enough, you say, except that we are the ones fielding the calls from confused buyers returning from the Neighborhood of Make Believe. (By the way, my own IDX site was off the actual number by 3 on this day, which I can attribute to a mere time-delay in data refreshing.)
Now, it turns out that 46 of those were miscategorized; they were condos that had been included in the “detached” category. We’ll get to those in a minute, but for now, let’s exclude them, leaving us with 178 Zillow listings. Of those, 15 were new homes posted by a builder or For Sale By Owner postings, leaving us with 163 Z-homes.
If you are still awake, here is where it gets fun. 54 of the 163 homes shown were not for sale – have never been for sale. They are homes that a certain foreclosure website has determined, from the tax records, have a Notice of Default filed by the owner’s lender. In other words, they might be on the market someday – or not. These pretend listings are shown with no address, only a street name, and requests for more information are funneled to their website where a buyer might pay to subscribe to a foreclosure notification service or be put in touch with a “neighborhood specialist” who will likely say something like, “That home isn’t available, but we have others!”
If we exclude the 54 unicorns, we are left with 109 Z-listings on February 2nd. Now we’re getting somewhere! Except:
- 24 had long ago sold, one dating back a full 13 months.
- 10 were in escrow. (Fun side note: One very large brokerage is showing all of their pending listings as “active” in Zillow, which sounds suspiciously like intentional deception in order to make that phone ring. Our own feed refreshes with the MLS; our listings go pending, and they come off of Zillow. If I can figure this out, I have to believe a national brand-name brokerage can.
- 1 was shown for sale at a bargain price of $7,000, but the remarks revealed it was actually a miscatergorized rental.
- 1 home was entered for sale twice by the same agent.
- 8 were expired, cancelled or withdrawn listings.
- 17 were “contingent,” with an accepted offer waiting on bank approval.
- 2 were mystery homes, and I finally gave up trying to figure out where these came from or if they are/ever were for sale.
The good news for Zillow is that most (not all) of the active inventory this day was there – somewhere. Just try finding it.
And the condos that were miscategorized as detached homes? Over half were not really for sale.
How does this happen?
Is bad data just another example of agents behaving badly? Sometimes yes; other times, I’m not so sure. Either way, it should be the responsibility of the platform to have effective procedures in place to ensure compliance.
My favorite example of the “agents behaving badly” scenario is the home that sold in September but shows up as an active listing. Big deal. There were 24 examples of this. Except, in this case, the agent that represented the buyer in September is the one who subsequently reposted the listing; he is now showing up as the listing agent for a home that is not on the market. Utilizing the magic “Report problem with listing” link, we indeed reported this listing to Zillow — three weeks ago. And, just like magic, it is still on their site in all its glory this morning.
And then there are the inaccuracies that I just can’t figure out. There’s a home that sold last summer, and the history indicates that the listing agent posted it as for sale the day after it sold. Yet, there is no listing agent or listing office shown. So, who really reposted the bogus listing? In fact, there are numerous examples of active listings with no listing agent or listing office attribution. I can think of only two folks who would benefit from such a posting: The agents adverting around and beneath, and a site owner who wants both a populous site and happy advertisers. If a listing is “accidentally” left on the site, I just can’t reconcile how the listing agent/office information falls off the grid. There could be a very good explanation; I just can’t see it.
I do, and other agents and consumers should. It’s a sort of listing Wild West that makes a mockery of both the data, and of the system that supports cooperative sharing of the data and offers of compensation between members. Remember, it is the latter that was the whole genesis of our MLS system.
The problem is that Zillow and their counterparts are not MLS’s. They are sites born of a free market, a site where the founders saw an opportunity to repurpose and monetize the efforts of the real estate industry. That’s fine. It’s that kind of thinking that breeds innovation. It’s that kind of entrepreneurial opportunity that makes America great. It’s just too bad that, given that the plankton of their business models is listing data, they can’t spend at least a fraction of the time they spend manning the phone banks to sell advertising around the data that they do on the data itself.
So keep in mind that if you show up on these sites searching for homes, you are really just, as I once put it, “Playing Zillow.” Your search results will include many homes that are for sale, but you will also be looking at many more properties that are only available in the Land of Make Believe. Have fun and, if you don’t already own a Ouija Board, delight over the Zestimates. Be dazzled by the array of side bar “neighborhood specialists” who may or may not be specialists at all but share the commonality that they had to pay to play Zillow.
Or, in San Diego County, you can just search here or here. And if you are in full search and purchase mode, maybe, just maybe, you could establish a relationship with a local agent who can help you sort through the online mess, an agent who knows the difference between real and make believe.
(Fun footnote fact, in case you dazzled by the agent review stars: This morning I checked the three "Premier Agents" who are shown sidled up to one of my listings. Now, I admit that they could each be the greatest thing since the death of Disco. But, according to the MLS, one has a total of ten career sales to his credit but twenty client reviews (OK, his "leads" are probably going to his agent team), another has zero transactions in his career, and the third is an agent who works in a different county and is not even a member of our MLS. I guess that doesn't mean their money isn't good. At least in the old days, gaming the system was free.)