Tag: Zillow.com

What’s the Story With Zillow? Specifically, Why Do Many Real Estate Agents Dislike Zillow?

Zillow is arguably the #1 fixture on the American real estate scene, and it has certainly worked hard to earn your trust and patronage. But many people don’t know how Zillow relates to the rest of our industry and why many real estate brokers/agents don’t trust it the way most homeowners, buyers and sellers do.

When I first entered the business two decades ago, Zillow was already in the business of displaying all real estate listings nationwide, as it does now. Its business model (revenue stream) was to sell agents ZIP codes where they would be displayed next to each listing so that buyers who are interested in that listing would click on one of those “premier” agents to see and possibly buy the house.

The cost of being one of those Premier Agents varied by location, and Zillow would sell each ZIP code to multiple agents, so each agent would get a percentage of those buyer leads based on how much they paid.

Keep in mind that to get those leads had little or nothing to do with how good or knowledgeable that agent was. Their qualification was simply that they paid to be there — as much as $1,000 or more per month for each ZIP code. Many agents have built their entire book of business this way, spending thousands of dollars per month to do so.

It has been a very successful business model, and it antagonized listing agents because their name was not shown next to their listings until recently, as I’ll explain below. That’s the origin of the our community’s discontent with Zillow.

Zillow, as you may know, has experimented — usually with success — in capitalizing on their impressive public awareness. The “Zestimate” has been particularly effective, and Zillow’s computer is good at reminding every homeowner with an email address what the current estimate of their home’s worth is.

One of Zillow’s experiments was to enter the “iBuyer” business where they would actually buy homes and flip them for a profit. Their major competitors, who are still doing that, were OpenDoor and OfferPad. Like those competitors, Zillow started losing money when the market softened, but Zillow was smart to exit that business quickly. They appear to have sold all the Denver area homes that they purchased under that program.

A big change that occurred a few years ago was that Zillow became a brokerage itself, which entitled it to receive a direct feed of listings from every MLS in the country. They don’t have a Denver office, but they do have a few agents with Colorado licenses. As you are likely aware, the member brokerages of every MLS can display on their website all the currently active, coming soon or pending listings of that MLS. That’s true of goldenrealestate.com, and it is also true of zillow.com.

This represented a big change for Zillow, because it now had to abide by the same rules as other brokerages, which included displaying the listing agent’s name, phone number and email address, but when you click on “Contact Agent,” the lead goes to a “Premier Agent” who paid Zillow to get website leads like that.

The fact that listing agents are now listed with contact info next to their listings and Premier Agents are not displayed anymore has softened but not completely overcome the antipathy that Zillow created in the past.

Zillow Has Published a Primer on Home Solar — Here Are My Reflections on It  

On April 27, Zillow published an article, “6 Questions to Ask as You Consider Home Solar.” I thought it was pretty comprehensive, but it was written for a national audience, and some of the questions are readily answered for us here in Colorado.

The article begins by asserting that, according to Zillow’s research, homes which highlight eco-friendly features like solar sell up to 10 days quicker and for 1.4% more than homes that don’t. That statistic, however, fails to distinguish between homes which have fully-owned solar installations, and homes that have leased systems or “power purchase agreements.” Those alternative arrangements basically create a situation in which the homeowner purchases electricity from two companies instead of one — still a good deal, since the solar power typically costs less than the power purchased from the utility.

Zillow’s question #1 is whether your home is suitable for solar. We all know, of course, that a south-facing roof without shading is best, but there are other considerations, such as the condition of your roof. If your roof needs replacing before you put solar panels on it, you may want to include Roper Roofing & Solar in Golden among the solar companies you interview. It’s the only solar company I know which is also a roofing company.

One question posed by Zillow is whether your HOA (if you have one) will allow solar. Fortunately, Colorado passed a law over a decade ago (C.R.S. 38-30-168) which requires HOAs to allow solar and other sustainable improvements. HOAs can regulate appearance but not prohibit solar. For example, it could require that solar panels be flush with your roof rather than angled out from it.

The article points out that if your home is not suitable for solar, you should look into community solar, for which it provides a link. Community solar is also a good alternative for renters and condo owners.

The second question is how to find a reputable installer. Personally, I prefer to hire a small (and local) family-owned company over a national business with a local sales team. I recommend Golden Solar, which has installed five systems for me over the past two decades, and Buglet Solar Electric. The owners of those two companies, Don Parker and Whitney Painter, can answer question #3, which is what incentives and rebates are available on the federal, state, local and utility level. The current federal incentive is a 26% tax credit, which drops to 22% next year and expires the following year unless Congress extends it.

Question #4 is whether there’s net metering, which allows you to “bank” your daytime production for nighttime use and carry forward your surplus solar production to future months and years. In Colorado, the answer is a resounding yes.

Question #5 is about battery storage. Net metering, in my opinion, makes home battery backup/storage unnecessary unless you are worried about power outages. (If you have life-sustaining equipment that requires uninterrupted electricity, battery storage might be appropriate.)

Where battery storage is essential, of course, is in off-grid applications, such as in a mountain cabin without accessible electricity from a utility.  I have listed such homes with impressive battery systems.

The last question which Zillow poses is whether a solar installation is worth it, admitting that this is a very personal decision.

A solar installation nowadays costs between $10,000 and $20,000 for the typical home, and you can ask the companies you interview what the return on investment will be. I have never worried about ROI, because installing solar, to me, is simply the right thing to do, satisfied as I am that it does pay for itself, whether in five years or ten.

One piece of advice not in the Zillow article is to factor in the increased electricity you will need when you buy an electric vehicle — which you will at some point, since most manufacturers plan to phase out gas-powered vehicles. Xcel Energy lets you to carry forward surplus generation from year to year, and allows you to install solar panels equivalent to double your last 12 months’ usage. (Do NOT elect to receive a yearly check from Xcel Energy for your excess solar production, because they pay you a small fraction of that electricity’s retail value — carry it forward for future use at its full retail value.)