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Is Zillow a Good Resource to Find My Home?

by Vic Costello, 05-20-2014 

Rich Barton and Lloyd Frink were former Microsoft execs and founders of Expedia, their Microsoft spin-off before they created their ultimate masterpiece in 2005 known as Zillow, which serves as a top leading database for online real estate with current CEO Spencer Rascoff. Zillow headquarters are located in Seattle.

Zillow generates revenue like its competitors Trulia and Redfin through ad sales on its website. In April 2009, the Zillow Newspaper Consoritum was established which created a partnership with more than 180 US newspapers’ websites, lending their real estate search engine in order to share profits from ad revenue from their co-branded sites, which further extended Zillow’s reach into local markets. However, it was in 2011 that Zillow partnered with Yahoo! Real Estate in an exclusive launch that would create the largest real estate network for advertising on the web that really put them on the map in the online real estate industry.

Since its humble beginnings, Zillow has had its fair share of acquisitions in order to stay on top. Zillow acquired Postlets, a online real estate listing creation and distribution platform in April 2011 for an undisclosed amount. Only a couple months Zillow bought Diverse Solutions for 7.8 million in November that same year. In 2012 Zillow acquired four more online real estate tech companies. The first was Rent-Juice, a service software that provides a set of online resource tools for landlords and property managers to market and lease their rental properties for 40 million in May. That Halloween Zillow also acquired Buyfolio, the online real estate shopping and collaboration platform. On November 5th, Zillow bought Mortech, an Omaha based mortgage tech company for 15 million. Hotpads, also founded in 2005, an online listing of rentals through a map-based web interface was bought by Zillow for 16 million on November 26th. Zillow’s last and most costly acquisition was StreetEasy on August 9th 2013 for a mere 50 million.

The best features of the Zillow website include the Zillow Mortgage Marketplace, Zillow Mobile, Zillow Advice, the Zestimate, real estate market reports, and neighborhood boundary maps on over 110 million homes for sale or rent (April 2013). Zillow’s popularity and traffic can perhaps be attributed to the value estimates it provides on property not only currently but also it’s potential value changes within a specific time frame given the course of 1, 5 and 10 years. Along with exceptional aerial views of homes to buy or rent captured by airplanes instead of standard satellite imagery thanks to the Bird’s Eye View by Microsoft Virtual Earth, Zillow offers comparably priced housing in similar area users search with basic home info (square footage, year built, number of bed/bath, historical property records) and public data related to that specific area such as qualifying school districts for concerned parents living with children.

The Zillow Mortgage Marketplace provides borrowers with the ability to get custom loan quotes identity free, which is a huge freedom and appeal to Zillow users because they do not have to disclose social security or phone numbers. Identities need only be revealed once the borrower has decided to go with the certain lender of their choice. Zillow thus creates competitiveness between these lenders because they can see requests from borrowers in order to offer competing bids form brokers, which in turn favors the users looking to borrow. Zillow legitimizes these lenders by providing a public profile for each where their identity, employment and broker license is verified and basic contact info is available along with borrower ratings.

Here is an excerpt taken from Wikipedia on Zillow’s Mortgage Marketplace website feature:

According to a summary of Zillow Mortgage Marketplace[19] written by Bernice Ross from Inman News on May 25, 2009, Zillow improved the online loan application process by doing the following:

  • Buyers can remain anonymous: Both traditional and online lenders normally require extensive information before they will give the buyer a rate quote. Since buyers want to avoid being solicited by a number of lenders, many are reluctant to reveal their identity. Furthermore, buyers are justifiably concerned that multiple inquiries will harm their credit report. In contrast, Zillow gathers enough information to create a legitimate loan quote. They do not, however, require the buyer to provide their name, address, phone number, e-mail address or Social Security number. The buyer remains anonymous until he or she is ready to contact the lender. This also eliminates the hassle of unwanted e-mails and phone calls from multiple lenders.
  • An average of 18 quotes: The LendingTree model provides the borrower with four quotes. Zillow provides an unlimited number of loan quotes from thousands of competing lenders. In fact, the typical borrower on Zillow receives 18 loan quotes. Each lender sees the other competing bids. This means great savings for the borrower.
  • Apples-to-apples comparison: One of the most difficult aspects for consumers is choosing which combination of rates and fees is best for their situation. Zillow requires all participating lenders to divulge their rates plus all fees. This allows buyers to do accurate comparisons. Their system also allows borrowers to filter various loans by rate, fees, monthly payment, annual percentage rate (APR), lender rating, and distance to the lender.

Zillow Mobile is available as on app on IPhone, IPad, Blackberry, Andriod, and Windows with all alike features with some possible slight differential variations.

Zillow Advice allows users to post real estate questions online to their community of experts via tags related to topic or geographic area by city, state, or neighborhood. Users can view answers or discussions searching via key word and vote the “best answer” they find.

Zillow Real Estate Market Reports cover over 130 metropolitan areas in the nation on its home value reports. Zillow users can view the overall Zillow Home Value Index, compare US states, and mortgage rates. Users can filter by home type, price tier and number of bedrooms. The metrics for the Home Values can be viewed in dollars by: List price, sale price, rent list price, Zillow rent index, value per square foot, list price per square foot, rent estimate per square foot, rent list per square foot, and sale-to-list price ratio. The following are the continued metrics for Home Values by percentage: listings with price cut, amount of price cut, sold for loss, sold for gain, homes foreclosed, foreclosure re-sales, increasing values, decreasing values, and sold in the past year.

To see how this works, have some fun and check it out here: http://www.zillow.com/local-info/

Zillow Neighborhood Boundary Maps database consists of 7,000 neighborhood boundaries in the largest US cities which was created by its data team and made available by Creative Commons Attribute-Sharealike license.

Zillow Zestimate is a progressive way for users to get a home value estimate on their home/property based on millions of public and user-submitted data points. Zillow also offers a Zestimate forecast which gives a prediction of the home value in a year based on its current home and market info. The accuracy of the Zestimate depends on the most available data. As of February 26, 2014, Los Angeles for example has a 3 out of 4 star rating for Zestimate accuracy, which is considered a “good” Zestimate, but not “best” Zestimate. This is based on 3.1 million homes in Los Angeles and those 2.9 million homes with Zestimates. 36.9% of the homes were within 5 percent of sales price. 64.5% of the homes were within 10 percent of sales price. 88% were within 20 percent of sales price and 7.1% had a median error. It further explains how Zestimates are updated and real estate pros work with the Zestimate on the website.

To find out more and all about the Zestimate go to the source at hand: http://www.zillow.com/zestimate/

Also, if you are a real estate agent interested in advertising on Zillow, use this link and sign up:

http://www.zillow.com/agent-advertising/

The website activity on Zillow continues to grow. As of April 2014, Zillow claimed 78.85 million unique users monthly from mobile apps and websites.

For more information about Zillow traffic stats, check out the Alexa (an Amazon company) report below: http://www.alexa.com/siteinfo/zillow.com

To sum up the best available information on Zillow’s website activity why not use hard facts from the source. A press release from Zillow dated February 14, 2014 reports Record Fourth Quarter and Full Year 2013 Results. The best summary bullet points are copied below:

Record Quarterly Revenue of $58.3 million, up 70% over fourth quarter 2012.

  • Record Quarterly Net Income of $2.7 million, resulting in basic and diluted EPS of $0.07 and $0.06, respectively.
  • Record Quarterly Adjusted EBITDA of $15.2 million, representing 26% of revenue.
  • Quarterly traffic grew 57% year-over-year to 54.4 million average monthly unique users on mobile and Web. In January 2014, Zillowtraffic reached a new peak with nearly 70 million unique users.

SEATTLE, Feb. 12, 2014 (GLOBE NEWSWIRE) — Zillow, Inc. (Nasdaq: Z), the leading real estate and home-related marketplace, today announced financial results for the quarter and full year ended December 31, 2013.

“This was a breakaway year for Zillow in which we repeatedly delivered record revenue, traffic, and mobile usage as we significantly grew our market share as the category leader. And we’ve had an incredibly strong start to 2014 with another traffic record of nearly 70 million unique users in January,” said Spencer Rascoff, Zillow CEO. “We’re looking ahead to 2014 with significant investments in growing our audience, growing our Premier Agent business and turning up the volume in mortgages and our other emerging marketplaces.

“We’ve also taken a critical step forward with StreetEasy in New York, re-launching the service today as completely free, with a better user experience. We’ve taken a page from the Zillow playbook, empowering consumers with free data and tools to grow StreetEasy’s audience and extend its leadership in the largest real estate market in the country.”

Fourth Quarter 2013 Financial Highlights

  • Revenue increased 70% to a record $58.3 million from $34.3 million in the fourth quarter of 2012.
  •  Marketplace Revenue increased 71% to a record $45.9 million from $26.8 million in the fourth quarter of 2012.
  •  Real Estate Revenue grew 71% to $40.5 million from $23.7 million in the fourth quarter of 2012.
  • Mortgages Revenue grew 69% to $5.3 million from $3.2 million in the fourth quarter of 2012.
  • Display Revenue increased 67% to $12.5 million from $7.5 million in the fourth quarter of 2012.
  • GAAP net income was a record $2.7 million in the fourth quarter of 2013, compared to GAAP net income of $0.5 million in the fourth quarter of 2012.
  • Basic and diluted GAAP earnings per share were $0.07 and $0.06, respectively, in the fourth quarter of 2013 compared to basic and diluted GAAP earnings per share of $0.02 in the same period last year. Basic and diluted non-GAAP net income per share were $0.20 and $0.19, respectively, in the fourth quarter of 2013 compared to basic and diluted non-GAAP net income per share of $0.08 in the same period last year, which excludes share-based compensation expense and income taxes.
  • Adjusted EBITDA was a record $15.2 million in the fourth quarter of 2013, or 26% of revenue, which was an increase from $6.8 million in the fourth quarter of 2012, or 20% of revenue.

Full Year 2013 Financial Highlights

  • Revenue increased 69% to a record $197.5 million from $116.9 million in 2012.
  • Marketplace Revenue increased 78% to a record $154.2 million from $86.7 million in 2012.
  • Real Estate Revenue grew 74% to $132.4 million from $75.9 million in 2012.
  • Mortgages Revenue grew 103% to $21.8 million from $10.8 million in 2012.
  •  Display Revenue increased 44% to $43.3 million from $30.2 million in 2012.
  • Due primarily to planned increases in advertising expenses, GAAP net loss was $12.5 million in 2013, compared to GAAP net income of $5.9 million in 2012. Included in our 2013 GAAP earnings is a one-time tax benefit of $4.1 million related to the August 2013acquisition of StreetEasy, Inc.
  • Basic and diluted GAAP loss per share was $0.35 in 2013, compared to basic and diluted GAAP earnings per share of $0.20 and$0.18, respectively, in 2012. Basic and diluted non-GAAP net income per share were $0.19 and $0.17, respectively, in 2013, compared to basic and diluted non-GAAP net income per share of $0.42 and $0.38, respectively, in 2012.
  • Adjusted EBITDA was a record $29.7 million in 2013, or 15% of revenue, which compares to $25.2 million in 2012, or 22% of revenue.

Operating and Business Highlights

  • Zillow’s audience continues to grow substantially, extending the company’s leadership over other category players. Average monthly unique users during the fourth quarter of 2013 were 54.4 million, up 57% year-over-year. In January 2014, Zillow marked another significant traffic milestone with a record of nearly 70 million unique users on mobile and the Web, an addition of 24 million monthly unique users year-over-year.
  • Zillow continued to gain market share in 2013. According to comScore, Zillow is now approximately double the size of the company’s two closest competitors on combined Web and mobile traffic in comScore’s Real Estate category1. On desktop, comScore shows Zillow.com tripling its category lead over its closest competitor from January through December 20132.
  • Visits to Zillow via a mobile device nearly doubled year-over-year in the fourth quarter of 2013, and in January 2014, nearly 400 million homes were viewed on Zillow on a mobile device – that’s 148 homes per second. Additionally, two-thirds of Zillow visits now occur on a mobile device.
  • Premier Agent subscribers increased by 3,565 in the fourth quarter of 2013, and totaled 48,314 on December 31, 2013, up 64% year-over-year. Average monthly revenue per subscriber in the fourth quarter of 2013 was $271, which was an increase compared to $267 in the same period last year.
  • Zillow Mortgage Marketplace continued to grow during the fourth quarter with 4.4 million loan requests submitted by consumers. For 2013, there were more than 20 million loan requests submitted through Zillow Mortgage Marketplace, up 71% over 2012. The number of loan requests submitted in 2013 was nearly four times the number of loan requests submitted in 2011.
  • As announced separately today, StreetEasy, which Zillow acquired in August 2013, has officially re-launched, offering free access to all of StreetEasy’s proprietary market data and New York-tailored shopping tools with a redesigned consumer experience.
  • During the quarter, Zillow expanded its distribution network, becoming the exclusive provider of for-sale and for-rent listings to AOL Real Estate. Including its own website, Zillow now powers listings across four of the top real estate websites in the U.S., including Yahoo! Homes and HGTV’s FrontDoor.
  • In January 2014, Zillow introduced another valuable product for rental professionals with the launch of the Postlets app on iOS. Specifically for landlords, property managers and real estate agents, the Postlets app enables rental professionals to easily distribute their rental listings to more than 20 of the top real estate and rental sites on the Web and mobile and easily share them on social media sites.

Of the 77.1 million total unique visitors across both Mobile and PC in comScore’s Real Estate category for December 2013, 42% of the unique visitors went to Zillow.com, which is twice the share of those who went to Trulia.com and over twice the share of those who went to Realtor.com. Source: comScore Media Metrix Multiplatform Total Digital Population on the Real Estate Category, December 2013, US Data.

2 Source: comScore Media Metrix Key Measures on the Real Estate Category, December 2013, US Data.

  • Also during the quarter, the company launched Zillow Tech Connect, allowing third-party technology companies to partner with Zillow to offer brokers and agents greater flexibility in choosing and utilizing their preferred CRM system, at no additional cost. Now, more than 15,000 brokers and agents using Zillow Tech Connect partners’ software will be able to directly access and manage contacts, giving them more flexibility when choosing a CRM system. Zillow Tech Connect now includes 11 different CRM providers.
  • Last month, Zillow hosted United States Secretary of Housing and Urban Development Shawn Donovan in Zillow’s Seattle headquarters for an important conversation on equality in housing in America. Zillow Chief Economist Stan Humphries moderated the live-streamed town hall meeting, which was also attended by representatives of the National Urban League, other officials and members of the media.

The full release is available here:

http://investors.zillow.com/releasedetail.cfm?ReleaseID=825393

This is how Zillow directly describes its company to investors:

About Zillow, Inc.

Zillow, Inc. (Nasdaq:Z) operates the leading real estate and home-related marketplaces on mobile and the Web, with a complementary portfolio of brands and products that help people find vital information about homes, and connect with the best local professionals. Zillow’s brands serve the full lifecycle of owning and living in a home: buying, selling, renting, financing, remodeling and more. In addition, Zillow offers a suite of tools and services to help local real estate, mortgage, rental and home improvement professionals manage and market their businesses. Welcoming nearly 70 million monthly unique users in January 2014, the Zillow, Inc. portfolio includes Zillow.com®, Zillow Mobile,Zillow Mortgage Marketplace, Zillow Rentals, Zillow Digs™, StreetEasy®, Postlets®, Diverse Solutions®, Agentfolio®, Mortech® and HotPads. Zillow is headquartered in Seattle.

For more information on Zillow visit:

http://investors.zillow.com/

www.zillowblog.com

www.twitter.com/zillow

www.facebook.com/zillow

Lastly, I will leave you with this video from CEO Spencer Rascoff himself titled, “Pulling Back the Veil on the Housing Market:”

https://knowledge.wharton.upenn.edu/article/zillow-ceo-spencer-rascoff-pulling-back-the-veil-on-the-housing-market/

I hope you found this condensed  overview information to be helpful. I will continue to post reports on the latest Zillow news. I will follow up a similar blog post for other topsites such as: Trulia, Realtor.com, RedFin, Ziprealty, Visualtour and any new and upcoming online real estate sites or apps on the rise. Please share and comment and let me know if you have any questions or something I may have left out or missed. Also, if you would like me to cover news, reviews or information related to any online real estate or a website grading criteria for a specific site. There is so much more to come. Thank you for your time and interest.

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