I just learned that Arizona has banned Zillow from it’s estimates on property values in Arizona. I find this odd, seeing that it is an estimate and costs appraisers nothing, so it doesn’t protect them from anything, nor does it protect consumers, but hurts them in the end. You don’t hire an appraiser for each house you look at, but the last house that you really want to buy in order to meet the mortgage lender’s requirements to get the loan. Heck, lots of houses, such as mine don’t even have an estimate so its a real crap shot if you can even get an estimate from Zillow on the home’s value. The estimate is just a tool for the consumer to use to see a rough idea of the home’s value compared to its asking price, or if they just saw an ad with no price, an idea of what to expect the cost to be. By narrowing a buyers choices down quicker, it allows the buyer to make a decision quicker and therefore get to the point of hiring a real appraiser sooner.
Another company, Redfin is apparently in trouble in Washington over Multiple Listing Service related issues. Some agents apparently even refuse to show a buyer a house, or let the seller know somebody is interested in the house, if somebody finds a house via Redfin. In the area’s where Redfin’s rebates are not blocked by a crazed law, it is Redfin that looses money off their portion of the fee (the refund 2/3rd of the money back to the buyer for the down payment, closing costs or whatever). The seller’s agent still gets their full commission. I mean, if Coldwell started giving only a 1% commission to it’s brokers, would Century 21 refuse to allow a Coldwell client the house they are being paid to sell? I would be highly upset if the agent I hired to sell my house refused to show the house to any serious potential buyer just because they found it via the Internet, or another agent that gave a part of the 6% fee I pay to the buyer. Heck, I am paying 6% to sell my house, my agent still gets 3%, so who cares if the buyer’s agent gives up a portion of their 3%? I don’t understand realtor’s objections to it. Readfin helps only if you know more or less exactly where you want to live. If you don’t know an area well, you will probably still end up hiring a realtor to help you find the kind of home you want in the kind of neighborhood you want. It takes a lot of research to find what is a good neighborhood, good schools and the like down to the street level, and for that you really need a real estate agent, and Redfin doesn’t replace that research at all. I live in a poor neighborhood, but you really have to go a few more streets down to find the really bad area, all part of the neighborhood. So an Internet search of this area would probably show it to be worse than it actually is at this street, a good realtor would know this and be able to point it out to a potential buyer. If when we move to Arizona, and if we had the money to buy a house, I would rely on a realtor, probably the one I was already in touch with, to help find a house. Sure, I could scan the newspaper ads and the Internet for a house, but that tells me nothing of the area. I have been to decent enough neighborhoods where one street is bad, but the rest of it is good. No way you’ll find that information online… Of course perhaps this was the objection in Washington to Redfin, which apparently allowed people to add reviews of homes or something like that. While apparently not part of the MLS, it was listed with it… Perhaps people were adding this kind of information that only a realtor would be able to give you. Still, the only time it hurts traditional realtors is if both the buyer and the seller are using Redfin (for the seller, Redfin charges a flat rate). I would guess that if the seller is using Redfin, and a buyer is using a traditional agent, the buyer would have to pay their 3% fee, unless Redfin splits their fee.
I personally doubt the seller’s agent business will go down much, regardless of what happens in the Internet world (access to the MLS listings alone is reason enough to keep seller’s agents around). It will go down some to be sure, but not a great deal. The buyer’s agent business will dwindle down a lot, but as I noted there are plenty of cases were they are still needed. The Internet isn’t something to fear, but to embrace.
If Arizona is blocking Zillow, I am sure they will take actions to block Redfin when, and if they try to come there. Boo Arizona. Boo on hurting the consumer. Boo for protecting nobody in the case of Zillow.