Where does one start when purchasing or selling real estate? The internet, of course! According to the National Association of Realtors, ninety percent of consumers now start their real estate journeys on the internet. Where do they start? According to ComScore, four sites –Redfin, Zillow, Trulia and Realtor.com attract 61 million of the 67 million visitors to real estate web sites each month in the U.S. You may think it is impossible to compete with such a large percentage of the market share controlled by these national companies. If so, you are wrong!
Perhaps, it is far better not to think of it as competition, rather, put yourself in the place of a buyer or seller and the state of mind they are in when they start their journey to buy or sell real estate. They begin the journey with questions. These national sites are a good place to begin with general real estate questions. From the mouth of Zillow’s CEO, Spencer Rascoff, the mission is: “What that means is teach those in the industry that we come in peace. That Zillow is a media company. We are not a brokerage. We are not a MLS. We do not compete with brokerages. We do not compete with MLSes. We sell ads. We don’t sell houses.”
So, since Zillow and the like are media companies and not in the business of selling real estate, your brokerage company is in the position to help the buyer continue the journey with precise local information. You need to establish a real estate niche or be an expert in your local area. Maybe you specialize in water front property or rental homes. You are much more in the position to bring the local knowledge of the market than any national company possibly could.
The national companies have been criticized about the quality and the accuracy of the data on their sites. These sites are data aggregators. First, they get some data from county records. To get properties available for sale, Trulia and Zillow need to negotiate data sharing agreements with over 800 MLSes or directly with large national real estate companies. Some websites allow sellers to input, update, or correct information about their own property. As you can imagine, there is a lot of conflicting information and opportunity for error.
The real estate company Redfin performed a study to test the accuracy of sites like Trulia and Zillow and their study found that approximately 36% of the listings shown as active on Zillow and Trulia were no longer for sale in the local MLS, compared with almost 0% on local brokerage websites. The study also found that brokerage listings using the local MLS displayed 100% of the MLS homes listed for sale on their websites, but Trulia only displayed 81% and Zillow 79%. So, in short – over 1/3rd of the listings you are seeing are not actually for sale and you only get to see 4/5th of the listings that are actually for sale. Furthermore, estimates of values from these sites can vary by almost 25% from the true market value. This is bound to leave a potential buyer frustrated and open up opportunity for a local real estate brokerage firm to step in and help guide a buyer and seller through the journey.
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