Posted by For many, homeownership is viewed as an obligatory rite of passage in adulthood, and ultimately one of the most significant long-term investments that individuals will make. The process of buying a home is arduous, and historically has been highly controlled by realtors.
Zillow revolutionized the entire process of homebuying. Zillow is an online real estate marketplace that first launched its website in 2006. Homeowners and property management companies can list houses for sale, and Zillow then provides information to users and potential buyers about houses that are currently listed in the market, as well as houses that are currently not for sale.
To home buyers, Zillow represented autonomy, empowerment, and convenience. Prior to Zillow and other online real estate marketplaces, property information was largely gate kept by realtors. The process of buying a home would have to be initiated by a real estate agent. Upon contacting an agent, only then would a potential buyer be presented with options from a multiple listing service and be made aware of the current housing market conditions. All property inquiries and showings would have to be mediated by a real estate agent. This meant that information about the number of bedrooms, square footage, property taxes, price history, and all other essential browsing information could only be accessed through a realtor. The decision-making process for a home purchase was thus largely shaped by the knowledge and opinions of a real estate agent rather than the home buyer.
With Zillow, property and market information was now readily available for all to browse at no cost. The rise of Zillow empowered homebuyers by allowing them to be more autonomous in making personal and informed decisions on home purchases. Those who still want the process to be heavily mediated by a real estate agent can still choose to take that route, but individuals who want to do their own research were now able to do so.
Potential home buyers could now informally browse houses in any neighborhood and school district, allowing buyers to consider options outside of the scope of the agent they are working with. The ability to do independent research outside of a formal process involving a realtor not only empowered buyers to feel secure in their decision by being able to browse every available option, but also allowed buyers to logically negotiate asking prices because of price history information, but also through Zillow’s Zestimate feature, which provides valuations for homes. This feature also allows for home sellers to set reasonable prices for their listing and understand the value of their home from an extra perspective.
Zillow allowed for greater autonomy is searching and researching potential home options. This was a significant change especially for lower income buyers and those without connections and access to better or more knowledgeable realtors because the purchase that buyers would make could now be less contingent on the work of someone else because there could be a greater emphasis on the research done by buyers to explore their different options. This further personalizes the process of choosing a home.
However, for realtors, Zillow’s rise in popularity was more contentious. For them, Zillow represented the diminishment, or even the entire elimination of the value and need for their work. Although the actual transaction and deal making of a home purchase is still heavily reliant on a realtor, a realtor’s involvement and influence in the initial house searching stages is a part of their job that has been reduced because of platforms like Zillow. The availability of information has caused agents to have less influence on their clients. Realtors have started to become less of a middleman between a buyer and a seller. Instead, their role has become more emphasized on carrying out a home purchase transaction. For agents, some view the rise in real estate platforms as a threat because of the trend that buyers are starting to rely less on personal guidance from an agent and more on information they can find themselves, which is far more limited than what a professional can offer. Moreover, establishing a relationship between an agent and a buyer can be crucial in ensuring the best deal is made. The automation of the process can take away from the opportunities to derive the most value out of a purchase, and potentially diminish the need for an agent to act as a mediator.
Zillow set a precedent for how real estate would start to evolve with the internet and emerging technology, allowing buyers and sellers to have access to properties and market trends. Ultimately, this deemphasized the role of real estate agents in being the sole mediator in a home purchase by empowering clients to have a greater role in defining their own destiny in a home purchase.
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