Frequently I think myself lazy when I ask people to repost their columns, but Kris just writes it better than anyone else and to bypass her verbiage would be a travesty.
by Kris Berg on December 15, 2009, posted with permission
I have long thought that the rental listing niche is ripe for the picking and practically begging someone to give it a decent home. Zillow has done just that and just in time for the holidays.
From Zillow’s very own press release:
SEATTLE (Dec. 15, 2009) – Real estate Web site Zillow.com today launched rental listings and search to its home shopping service and database of more than 90,000,000 U.S. homes. For the first time on Zillow, anyone can list a home for rent, and Zillow users can now search both rental homes and homes for sale in their area. Additionally, Zillow has built the industry’s first mapped search by monthly payment, allowing home shoppers to simultaneously find for-sale and for-rent homes, based on a monthly payment they can afford.
Rentals, no longer the poor cousins, will now be displayed in all their glory on Zillow’s site side-by-side with homes for sale, homes recently sold, and those crazy uncles, the Make Me Move’s. Here is a screenshot provided to me earlier yesterday of what the site should look like by the time this is published.
Few cool things come without a price, and this is no exception. Rental listings will cost $9.95 for a six month run. And in case you were wondering (I was), each home has to “pick one.” Occasionally in the land of real breathing people, a home will be offered for both sale and rent at the same time – a hedge play. In Zillowland, the home owner and /or agent will have to decide what they want to be biggest and put their listing zeggs in that basket.
Here’s my two cents (keeping in mind that if I had a clue about building a dominant national real estate search site, I would not have a 7:00 AM walk through scheduled for tomorrow).
Practically speaking, ten bucks is nothing to expose a rental listing to approximately 8 million monthly users for a period of six months. For Zillow, however, this could represent a significant revenue source. It’s about time. Charging for rental listings will minimize the potential for scams ala Craigslist. In fact, I seem to recall suggesting to Craig that he charge everyone a buck and require a real registration process in an effort to start cleaning up the mess. Too late. Zillow did it.
In most areas, Craigslist is still free to list rentals, but few will argue that the presentation is generally hideous. As a landlord, I would pay twenty bucks and a bundt cake just to benefit from the search and mapping features Zillow offers over the MS DOS-esque presentation Craigslist still has going on. Sure, it was charming for awhile, but most of us are over it.
The one thing that causes me a little indigestion is the possibility that over time and given a reasonable arsenal of historical rental activity data, Zestimates may ooze forth to contaminate the rental space as well. I know firsthand how much real estate agents dig Zestimates; I suspect landlords will be just as giddy with the Zillow pricing assist when they are attempting to rent their properties for fair market value. As an agent, I deal, but then I am not paying $10 a pop for the exposure. Those paying customers who list rentals may not be so forgiving.
When I asked about any plans to Zestify rental listings (back off, Zillow – I am copyrighting that one), David Gibbons, Zillow’s Director of Community Relations, said that rental Zestimates will not be a part of the launch. Clearly the historical data does not yet exist. However, if I understood correctly, he did not rule out that eventuality.
Speaking of the $10 a listing concept, that reminds me of a little “throw away” change coming in the newest release. Like the pork in a congressional bill, it wasn’t promoted in the press release. Rather, it is a special buried extra.
Beginning immediately, any homes listed for sale manually will now carry a 180-day, $9.95 price tag. Granted, according to Zillow, of the approximate 4 million active homes listed for sale on their site, only approximately three percent are manually entered, with the remainder coming directly from agent and broker feeds. This won’t affect me, as the information on all of our company’s listings are currently delivered via direct feed, but about thirty thousand other listings will be affected.
Listings currently posted and falling under this category will be given a free thirty day “think about it” grace period before having to ante up. Among those who will now have to pay to play are For Sale by Owners (FSBOs). Interestingly, a Make Me Move listing will still cost nothing (which, by the way, is exactly what it is worth).
Honestly, this rider to the rental bill doesn’t cause me that much grief. Any broker or agent with a mouse and five minutes can syndicate their listings via a variety of services. But, whether this will inspire them to do so, whether they will just pay the piper, or whether they will simply write Zillow off remains to be seen; 120,000 times $10 (carry the zero) is $1,200,000 – not a ton for a company which has raised $87 million in funding, but enough to throw a nice Christmas party. On the other hand, losing 120,000 property listings from the site would not be a good thing when your raison d’tere is data.
As a side note, one other new feature, what I believe to be a necessary side effect of having rental and sale listings coexist, is that consumers will now be able to search for homes for sale by monthly payment. I see this of fairly limited usefulness, as the payment will be based on a 30-year fixed, 20 percent down loan with rates established by the Zillow Mortgage Marketplace. There are simply too many variables in the monthly nut to make this any more accurate than a Zestimate, such as homeowners’ association dues and, in California, Mello Roos. But, it is there, so I shared.
Having said all of that, and while you marvel at how I can turn a small bit of news into a one-thousand word stream of consciousness, what this move will do for rental search, and ultimately for Zillow, is going to prove another very fine feather in their cap.