051: What is Zillow all About? with Zillow’s Jay Thompson
The Zillow Group has become a massive website with over 130,000 million consumers visiting a month. Zillow has become the most popular real estate website in the world, and many people wonder how Zillow will affect the real estate industry. I have spoken with many agents who think Zillow is trying to replace real estate agents. Others feel Zillow will start their own real estate brokerage in an effort to monopolize the industry. Today on the InvestFourMore Real Estate Podcast, I discuss these issues and much more with Jay Thompson, who is the Director of industry outreach at the Zillow Group. Jay has an extensive real estate background and even owned his own real estate brokerage at one point.
How did Jay Thompson get involved with Zillow?
Jay was working in the corporate world with Motorola when He decided he needed a career change. He had been in the corporate world for many years, but had the urge to start his own business. Jay decided to get into the real estate business. Jay became an agent and then broker so he could start his own office. Jay had up to 32 agents at one time and went from an agent selling houses to a broker managing agents. Jay had a great time, but was approached by friends at Zillow who asked him if he wanted a career change. Jay took a trip to Seattle to visit with Zillow and ended up accepted a job offer from them.
Not only does Jay have experience in the corporate world, but he has experience as a real estate agent and broker.
How did Zillow start and what was their mission?
I asked Jay what the meaning was of Zillow, where did that name come from? I was surprised to hear that Zillow came from:
“Zillions of Pillows”
The founders of Expedia and former Microsoft executives Rich Barton and Lloyd Frink wanted to created a database of information on homes across the country. Someone the idea of Zillions of pillows was brought up to represent every house in the United States and it was shortened to Zillow.
Zillow was not started with a particular mission in mind, but to fill a void. It was very hard to find data on houses, if you were not a real estate agent. You could find public information on homes, but many cities and counties did not have an easy system for consumers to get information from. Zillow was created to provide a nationwide database of information on every house.
How has Zillow evolved over the years?
Zillow started out as a web site with information on almost every house in the US. Over the years Zillow evolved to offer more services:
- Home valuations
- Real estate agent lead services
- For sale by owner listings
- Rental property listings
- Information on real estate trends and prices
I have used Zillow in many ways to research new markets to invest in. I do not personally trust the home values Zillow produces, but they have some great information on price trends. I have also used Zillow for leads as a real estate agent and we list our rental properties on Zillow as well.
Is Zillow trying to take over the real estate agent’s job?
I talk to a lot of agents across the country and see many articles about Zillow and real estate agents. Many agents are worried that Zillow wants to become a real estate broker or listing service that will eliminate real estate agents. Jay and I talk about this subject in great detail on the podcast, but his opinion is that Zillow does not want to be a real estate broker. I agree with him and wrote a previous article about this here.
The reasons I do not think Zillow will become a listing service is because real estate is so unique. Every house is different because it sits on a unique piece of land. It is not easy to value houses and that is one of the biggest reasons to use a real estate agent. It would also be a nightmare for one company to be an active broker in every county, city and state. Zillow would have to have individual brokers for each office, access to each MLS system, local offices and at that point where is the advantage over other local offices?
Jay talks openly about how Zillow makes money.
- Through advertising on their massive website
- By charging agents to advertise on the website
While Zillow may be making information more accessible, they are not going to replace real estate agents.