I decided to take the two most disruptive technologies in our industry and mix them up in a martini shaker. Below you will find Chat GPT’s answer to “Tell me how Zillow disrupted the real estate market?” in regular text. My commentary is in italics. Enjoy!

Zillow as a Real Estate Platform

Zillow is a real estate website and app that was founded in 2006. The company disrupted the real estate market by creating an online platform that aggregates data about homes, neighborhoods, and real estate trends. Zillow’s platform provides users with detailed information about homes, including their estimated value (known as a “Zestimate”), photos, and descriptions.

True statements. More on how Zillow gets the information below.

One way that Zillow disrupted the real estate market is by providing consumers with access to information that was previously only available to real estate agents. Prior to Zillow, consumers had to rely on real estate agents to provide them with information about homes for sale, including their estimated value. Zillow’s platform gave consumers access to this information for free, allowing them to make more informed decisions about buying and selling homes.

Where Does Zillow Get Their Data?

Here is where the “rub” happened with real estate professionals. The listing data, photos, descriptions, and most listing information was all created by the real estate agents. Those agents put the listing data into their respective MLS system to share with other agents in the area. Zillow then looks to get a “feed” from every MLS in the country, combine it with tax data from companies that compile tax data (Such as CoreLogic), and then create an interface that the consumer will love. Real estate agents had search and email capabilities through their MLS systems, but nothing could compare to Zillow’s robust display, easy to use interface, and exposure around the world. So, next thing you know, every single seller in America wants their property on Zillow. Also, every single person in America thinks that the Zestimate is accurate . . . but it’s not. Zillow uses algorithms to determine price which works well in subdivisions where the homes are similar. But once you get into neighborhoods where properties differ greatly, the Zestimate is more unreliable.

Does Zillow Still Have Instant Offers?

Zillow also disrupted the market by introducing new tools and technologies that make the process of buying and selling homes more efficient. For example, Zillow offers a feature called “Instant Offers” that allows homeowners to receive offers on their homes from investors without having to go through the traditional listing process. Zillow’s platform also allows consumers to search for homes based on specific criteria, such as school district, neighborhood, or price range.

Chat GPT is right that Zillow used to offer Instant Offers, but they aren’t doing that anymore. In fact, they lost a lot of money and many people were fired. So one strike against Chat GPT for this outdated information, although Chat GPT will tell you it isn’t up to date on issues after 2021. In terms of searching, Zillow does give the consumer greater flexibility to search for properties, around the country, without having to involve an agent.

Another way that Zillow disrupted the real estate market is by creating a new revenue stream for the company through advertising. Real estate agents and mortgage lenders can pay to advertise their services on Zillow’s platform, giving them access to a large audience of potential customers.

Zillow’s Leads Are Often Directed to Buyer’s Agents

Kinda right, kinda not. This is where Zillow gets interesting for real estate professionals. As I mentioned above, Zillow became an instant hit because consumers could get real estate information that was previously hard to obtain – and the information was from EVERYWHERE! But, what Zillow didn’t do was to direct the consumer to the listing agent of the property. Instead, Zillow sold placement and leads to other real estate agents, some of whom didn’t even work in the market where they were being featured, to capture the buyer leads. This is confusing to the consumer and still is confusing. In fact, our office receives Zillow leads, and many times consumers think that they are contacting the listing agent to get a showing of the property. Instead, they are actually getting a buyer’s agent who is showing them the property and expecting that the buyer will convert to a client. And Zillow is not cheap. Leads went from hundreds of dollars to thousands of dollars. And with Zillow’s new Zillow Flex program in select markets, they are taking a substantial referral fee from partner agents.

Overall, Zillow has disrupted the real estate market by providing consumers with access to more information, introducing new technologies and tools that make the process of buying and selling homes more efficient, and creating a new revenue stream through advertising.

Zillow Is an Industry Disrupter Here to Stay

While Zillow has changed the way we as real estate professionals do business, its effect on how consumers find, process, and use real estate data has been industry changing. Zillow is here to stay, so we are embracing it and working with the company to deliver the best service we can to our customers.

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