Many real estate professionals are unhappy with Zillow's open-door policy, inaccurate Zestimates, and lack of regulation. Del Aria Team conducted a survey that the company has also failed to keep up with the latest market information, which only serves to annoy real estate professionals. It's even more frustrating for realtors to deal with buyers who find out that the information they are receiving is outdated.
Real estate professionals have many reasons to hate Zillow, but they have one major problem in common: Its open-door policy makes Zillow an easy target for scammers. Because anyone can post a listing, it doesn't conduct due diligence on its sellers. That means it doesn't verify whether a house is for sale or not, and it doesn't verify whether the listing information is accurate. This means that people can post bogus information to get the information they're looking for. Moreover, some of these scammers may pose as well-known realtors.
However, Zillow's open-door policy is not an instant fix. The company still has a major technological edge over competitors. For one, it has a better user experience than other websites. Unlike traditional real estate firms, Zillow has access to vast amounts of data about the real estate market. This information can help realtors provide value to homebuyers.
Accuracy of Zestimates
While the accuracy of Zestimates for realtors in Fairfax is good, it is not perfect. It can have a significant margin of error because its formula relies on public records and closed transactions, which are subject to change over time. This means that the actual value of a home may be much higher than the estimate.
While the Zestimate can help to provide a starting point for buyers, it is not a guaranteed price. It is only meant to give a general idea of a home's market value and may take a while to reflect the final price. There are many reasons for this, including the fact that Zillow can't see inside a home and doesn't know what the features are. In addition, it doesn't account for the neighborhood or any upgrades the home might have.
Lack of regulation
The lack of regulation for realtors on Zillow is a major issue. The company operates aggregator sites for homes and MLSs and charges realtors to promote their listings on its websites. It also has a "Premier Agent" program, which allows realtors to charge a fee to be promoted on its websites. In addition, the company started transacting thousands of homes a year through ibuyer. The company has also joined the NAR as an MLS participant.
The NAR is the nation's largest trade association of realtors professionals. It represents around 1.45 million real estate agents and multiple listing services. The NAR promulgates rules to govern its members' businesses. Those rules are widely used in the real estate industry. One rule requires that the members' listings appear separately from those obtained through other sources.
Irresponsible business practices
A recent investigation by the federal government has exposed the irresponsible business practices of Zillow. The investigation focused on the co-marketing arrangements the company has with mortgage lenders.
These agreements allow mortgage lenders to pay for realtors' monthly advertising costs on Zillow websites. This allows them to appear as credible sources of financing and generate leads. However, consumers do not know about the co-marketing arrangements and may be misled.
Although it is not illegal, the dual-agency relationship means that Zillow is unable to fully represent its clients' interests. This practice is rare and seldom ends well for either party. This makes Zillow susceptible to deceptive practices charges. The company has since revised its policy. However, some industry insiders have questioned the effectiveness of the change.