Scott Bayens: The trouble with Trulia and its friends
I have trouble with Trulia. I have a beef with Zillow, which bought Trulia back in 2014 for $3.5 billion. Realtor.com also stinks. The same goes for any other of the dozens of similar online services.
Yes, I realize the average consumer absolutely loves these tools and is hooked on their power and convenience. They literally put the MLS in the hands of buyers and sellers, which is not necessarily a bad thing. And I agree, the data these programs provide are amazing and very useful. Nonetheless, my opinion of sites like these and their related apps is lukewarm at best.
Full disclosure, my wife and I use Zillow often when browsing through neighborhoods both here at home and while traveling. It's as fun as it is informative and allows us to see the price, many of the details and interior photos, all while parked at the curb after a few clicks and swipes. The real genius is the immediacy of it all and the ability to take action or move on down the block to the next for sale sign.
In the "old days" one had to call a broker or brokers, set up appointments, ask for photos and so on. It certainly seems like an archine system in light of what's possible now, and in many ways, a welcome improvement.
But like any of the revolutionary, disruptive innovations of our age, there's always a price to be paid. Certainly this technology has become invaluable, is here to stay and will only evolve over time. But I would argue there's a significant downside for those of us on the other side of the sign, and in turn, unwitting consumers, as well.
It might be surprising to know Zillow characterizes itself as a media company. In fact, thanks to its numerous online channel partners, it is one of the largest advertising networks on the web. Bottom line, it generates enormous revenue by selling advertising — not by selling real estate.
Who buys those ads? It's real estate brokers, mortgage professionals and others looking to connect with new buyers and sellers. The subscriptions they purchase result in their names appearing as "experts" or "preferred agents" associated with properties within a specific area or zip code. The higher the price of the average home in those areas, the more Zillow and similar sites charge. Here in our valley that can easily be in excess of $1,000 a month for placement on just one of the many available platforms. The enticement is the potential leads to those that pay to play.
But here's the rub and the inherent problem: The listing agent is shown below those that pay to be "featured" with the bolder and colored type and hype. There are no personal photos or enticing client reviews for the broker of record for the seller, which effectively separates the real expert from those who choose to subscribe for the elevated ranking.
This artificial hierarchy has two significant effects. It algorithmically alienates those with the most knowledge of the subject property from those who might be interested in buying it. Second, it essentially "blackmails" brokers with the real expertise in a given neighborhood to compete financially with an agent that could be in, well, Timbuktu.
In my view, this new system does not serve the public good. Despite their popularity and proliferation, something gets lost with the use of these new technologies. Certainly, the personal touch, knowledge and service aspect of the broker client relationship are a few of the causalities. — not to mention the phenomenon of what I would describe as an overload of "impersonal information."
Info on these platforms also can prove to be inaccurate. Take the "zestimate" for example, Zillow's artificial intelligence's guess of market value, frustrating to sellers and delightful to buyers. It certainly does not accurately reflect what the market will bear.
I was reminded this week after talking with the wife of a fellow veteran broker just how much the business of realty has changed in the past 20 years. Back in the day your broker likely lived in the same neighborhood as you, their kids went to the same school, you likely saw each other on the street walking the dog and might have seen each other at church or the weekly scout meeting. He or she was able to maintain a personal and business relationship as a result of friends, family, marriages, births and birthdays, new neighbors and departures and, yes, even deaths and divorce. The point is brokers like me used to operate in the center of their communities, were trusted advisers and friends and stayed face to face and belly to belly throughout it all.
That's still the goal today and the secret of success for top producers. The genie is out of bottle on this issue and we all need to adapt to and adopt emerging trends and technologies.
But it is the experienced broker with his or her feet on the ground who can put the data in perspective and even sometimes dismiss them. How does the property make them feel? Does it fulfill a life-long dream? How many memories will be born with family and friends here? Real estate is a tangible asset but it can be the intangible that can be the most salient. So the next time you click, take a second to scroll down and find the real pro who actually secured the listing and who might know something your hand-held device might not.
Scott Bayens is a broker with Aspen Snowmass Sotheby's International Real Estate in Aspen-Snowmass with more than a decade of experience with buyers and sellers. He's been a renter, a homeowner, a landlord and investor through every kind of market. Scott can be reached at email@example.com