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Zillow CEO Discusses Evolving Real Estate Market

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By Maria Patterson

RISMEDIA, October 27, 2010—As the real estate industry waxed and waned over the past several years, Zillow has gone from suspect intruder to trusted partner. Here, Zillow CEO Spencer Rascoff explains how both the industry and Zillow have evolved together, and why the “dark days” of real estate are behind us.

Maria Patterson: First of all, congratulations on recently taking over the role of CEO. How will this change your responsibilities at Zillow?
Spencer Rascoff:
Thank you very much. I’ve been focused on partner relations and relationships with the real estate industry for quite some time. I will continue to be the face of Zillow to the industry while taking on other areas, such as product development, advertising, sales and general corporate strategy.

MP: When Zillow first hit the marketplace in 2005 so many looked at it as a threat to real estate professionals. How have you managed to evolve to the role of trusted partner?
SR:
I think early on, when Zillow first launched, there was a lot of confusion and suspicion. People didn’t fully understand what Zillow was all about, but from the beginning Zillow was a media company designed to provide consumers with information about real estate, but in no way diminished the role of the real estate professional. Look at WebMD—you go there for medical information but you’re still going to go see a doctor. Real estate is no different—buying a house is an extremely high-emotion, high-dollar-value transaction that is too important to pursue without professional assistance.

Over the years, as the industry understood that Zillow was about providing information but not cutting out the real estate agent or broker, we started forming better relationships and partnerships with the industry. Today, we have a broker advisory board with industry luminaries from every major brokerage, and thousands of companies from which we take listing feeds—we post information on over 4 million homes for sale. Today, the industry accepts and values Zillow as part of its ecosystem.

MP: How has the journey from the real estate boom to the real estate fall affected the role Zillow plays…good and bad?
SR:
Volatility benefits information providers, so market volatility—on the way up and on the way down—has made consumers hungrier than ever for Zillow’s information about the real estate market. Volatility has undoubtedly helped our ascendancy in terms of website traffic. Also, the market downturn helped accelerate the industry’s acceptance and embracing of listing syndication. Now, everyone widely agrees that agents, brokers and home sellers need to have listings displayed in every possible place. Five years ago, the industry did not have as much uniform agreement about this.

MP: How would you grade the real estate industry’s adaptation of technology in the past five years?
SR:
I’d give it an “A-minus.” As an industry, we hold ourselves to high standards and are constantly self flagellating when we feel we’re not as forward thinking as we could be. The fact of the matter is, though, that many real estate brokerages and agents are using technology to advance their businesses very effectively. What’s asked of an individual agent, however, is enormous in terms of them being up to speed on the latest technology trends, social networking trends, legal issues, personal marketing issues, tax issues, etc. In no industry other than real estate is a professional asked to be a sole proprietor and the expert on topics as varied as marketing, law, finance, and of course, real estate. It’s daunting for an agent to remain an expert on all these topics and, therefore, nearly impossible to earn an “A-plus” in each one.

MP: How has Zillow managed to build consumer traction?
SR:
Zillow has grown its consumer audience to 12.5 million unique users on Zillow.com and our mobile apps by offering tools and information they can’t find elsewhere. It’s about a lot more than putting up listings of homes for sale. We go far beyond that by providing Zestimates and housing data by city, state, neighborhood, and zip code. We have many ways to slice and dice housing data. We also attract consumers by providing community discussion boards and through our Zillow Mortgage Marketplace where someone can be anonymously matched with a lender. We had 314,000 loan requests in the month of August, up six-fold from a year earlier. It’s growing incredibly quickly and is a fantastic consumer experience—borrowers remain anonymous until reviewing their customized quotes and choosing to take the next step with the lender.

Mobile has also been an important driver of our growth—we have over 2.25 million downloads across iPhones, iPads and Android smartphones. There’s no question in my mind that at some point, Zillow will get more users through mobile as more of our consumers will utilize Zillow on their mobile device. It’s a question of “when” not “if.”

MP: How do savvy agents use Zillow to their advantage?
SR:
The most successful agents have become a Zillow Premier Agent by purchasing an advertising placement in a given zip code and they then receive preferential treatment for their listing, as well as receive buyer contacts on other listings. Zillow Premier Agents report an extremely positive ROI on their investment with Zillow. Ninety-six percent of our Premier Agents describe their experience as “excellent,” “good,” or “ok” after three months in the program. We also encourage all agents to complete their profile pages, which serve as an online resume, and to participate in Zillow Advice by answering consumers’ questions about real estate; many agents gain clients this way.

Successful agents are also making sure that their listings are represented well on Zillow. Most listings are coming via their broker, so if I were an agent, I’d review my listings on Zillow and alert my broker or Zillow (866-324-4005) if they need to be altered.

MP: You recently completed a detailed interview regarding Zillow’s new partnership with Yahoo! Real Estate in the October issue of Real Estate magazine. Overall, what do agents and brokers stand to gain from this partnership?
SR:
Zillow is now the exclusive provider of homes for sale on Yahoo! Real Estate. Through Zillow, agents stand to gain a more streamlined way to get more exposure on one of the leading real estate websites available. Agents and brokers can get their listings and buy ads by working with one partner relationship at Zillow—they can send their listings to Zillow.com, Zillow mobile and Yahoo! Real Estate. Taken together, these three platforms are the largest real estate network on the Web.

MP: I know you’re out there discussing data and stats on a regular basis, including in our Daily Real Estate Advisor. Despite the story the data tells, what positive messages do you think are important to get out there about real estate?
SR:
Home values have bottomed and bounced off the bottom in some parts of the country. In San Diego, for example, they’re already 5-10% off the bottom. We don’t expect a significant price appreciation from here, but we don’t expect home values to go further south in those parts of the country. This points to the way we must look at home values—which is at the neighborhood and regional level. It’s more nuanced than what the national media typically reports. There is definitely some good news for our industry which has been underreported. For example, we’ve clearly passed through the bottom in terms of transaction volume. Homes are selling again and the dark days of two to three years ago when there were no sides taking place are behind us. The agent and broker who is tech-savvy and understands how to price homes in the market and who has the experience on short sales and foreclosures will do extremely well.

For more information, visit www.zillow.com.

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