How Zillow and Redfin Have Changed the Real Estate Industry
The launch of real estate sites like Zillow and Redfin has changed the way that consumers get information about houses while also transforming the role of real estate agents. Understanding how the industry has changed can be helpful for anyone that is considering buying or selling a property. This is particularly important given some of the misinformation that is shared on these sites.
What Services Do Zillow and Redfin Provide?
Zillow was launched in 2006 and describes itself as a “real estate marketplace.” Beyond serving as a database with over 110 million US homes, the site also helps buyers and sellers connect with local real estate agents and mortgage providers. In addition, Zillow has a Zestimate feature, which is an algorithm to calculate home and rental prices. This feature is particularly controversial given some of its flaws that often leave buyers and sellers misinformed.
Redfin launched in 2004 with the goal of providing sellers with a low-fee way to sell their homes. While the model has shifted some, the general idea is having fewer agents dealing with a higher volume of clients. While the goal of the site is to offer a discounted way to sell a home, the reality is that sellers are left paying a commission without getting many of the services that on-the-ground agents provide.
The Changing Role of Real Estate Agents
The rise of Zillow, Redfin, and other major real estate sites has had some profound impacts on the real estate industry. Perhaps the biggest shift is the dramatic rise in the volume of information available to consumers.
The reality, however, is that while having access to lots of information is helpful, it can make it hard to know what information is relevant, accurate, and beneficial. Additionally, lots of information without context can leave buyers and sellers with very little guidance.
Because of this, real estate agents have transitioned into being “curators” of information. Jonathan Miller of Miller Samuel describes this change well by observing, “The realtor’s role has morphed from ‘here’s the information’ to ‘here’s the right information.’” This is particularly true given some of the misleading information that is available from online sites. Algorithms and databases simply can’t give an accurate picture of local real estate markets.
Why Buyers and Sellers Continue to Rely on Real Estate Agents
Because of the shortcomings of these sites, around 90% of buyers and sellers continue to rely on real estate agents. When making the biggest and most complex purchase or sale of their lives, most people want a trusted professional to guide them through every step of the process.
Additionally, while data and algorithms can provide some key information, they don’t replace the local knowledge and expertise that agents provide. Consumers need a trusted professional to help them sift through all of the information and focus on what’s accurate and relevant.
As a result, the rise in online sites has not changed the demand for real estate agents. Instead,it’s simply changed the role of agents. For help learning how to navigate this changing industry in the Sevierville, Gatlinburg, or Pigeon Forge area, contact Smoky Mtn Realty.