Market to Zillow’s sales-minded users

Zillow, the online interface that lets homeowners and housing voyeurs estimate the value of real estate from public record data, announced last week it would begin allowing users to post home sale listing information on the site.

The company says it already has a dedicated Web page for more than 60 million homes in the United States, and now allows owners “to plant virtual ‘For Sale’ signs in their Zillow front yards for free.” Free listing capabilities include the ability to upload photos, neighborhood information and brief property descriptions.

Another new feature, in keeping with what Zillow founder Richard Barton calls the “frivolous entertainment value” of the site, is letting homeowners post a Make Me Move price associated with their home.  This is supposed to be the value of an offer that would make an owner sell even though their home isn’t technically for sale.  To go along with their dream price, owners can post photos, information about improvements, and what they love about the property and area. (See an example by clicking here.)

Because we’re all about appraiser marketing here, we can’t help but think this could be a way to drum up new business from homeowners.  People who flag their homes with “Make Me Move” prices on Zillow have identified themselves as at least interested in their home’s value.  You don’t know who’s browsing Zillow looking at their and their neighbors’ properties, but you know who’s giving some thought to what kind of offer would make them sell.

You could search your coverage area on Zillow, browsing all the blue flags (the Make Me Move properties). If you’ve appraised any of those properties before, contact the owners with an offer to perform a new appraisal of the property to help them decide whether to sell.  Or reassure them that they’re placing a value on their property that’s in line with today’s market.  Or, just as valuably, tell them they’re not.

A recent study of 25 Seattle-area homes by the Seattle Times (article available by clicking here) found that roughly half sold for more than their “Zestimate” values — what Zillow tells the world they’re probably worth — and half for less.  Of those that sold for more, a significant number sold for more than 10 percent more.  Homeowners pinning the tail on the donkey by setting a Make Me Move price of X percent more than their Zestimate might be setting themselves up for a raw deal, or selling themselves short.

Regardless of the immediate business potential, as Zillow expands its capabilities to attract more visitors and therefore more ad revenue, its Zestimate values are put into more appropriate context.  Homeowners can already post “corrections” to their home’s Zestimate, and with the addition of For Sale and Make Me Move listings, there are potentially four different values associated with a given property.  To the extent this makes homeowners — and your lender clients — view Zestimates more as one possible figure associated with the value of a home and not the last word, that’s a good thing for the integrity of the appraisal process and profession.