In addition to listing on our local MLS, which listings are then picked up by many national sites including Realtor.com, we are trying to find the best ways to use MySpace ads, Craig’s List ads, and ads on Zillow. We’re in a smaller market so currently most Zestimates include accuracy disclaimers, but likely as the data is spread wider and deeper greater accuracy will be possible.

Keeping the data current is a huge challenge even for MLS’s with staff responsible for the task, and I think the mix of Realtor and homeowner ads may confuse many consumers because of different levels of accountability. For example, our MLS levies fines if property status isn’t changed within a prescribed number of days; there’s no such motivation for homeowners.

Our industry is highly regulated and we are accountable for ad content . . . homeowners are likely not to be held to the same standards, other than ultimate liability in the case of outright fraud. For example, Realtors cannot say that a home is close to a church, or good for families, because of protected class regulations . . . buyers often want to know of those very factors, so if homeowners listing their own property make those statements, who is liable? Realtors can point to third party sources of school ratings or crime figures, two more hot topics, but cannot make statements about good or poor schools or about low or high crime rates – will Zillow be successful in keeping protected class statement violations out? Or will homeowners posting their own ads find themselves in court? Certainly these are areas of concern.

I personally welcome Zillow’s efforts in the hopes that they’ll have deep enough pockets and long enough staying power to become a major force – there are too many small players presently that fragment the market, which doesn’t benefit consumers or Realtors.

Will any online service totally replace Realtors? Of course I hope not, but helping buyers find property is only one part of the process. Getting to contract is of course another whole piece, often involving more emotion than hard data. The greatest challenge, though, which is present in both hot and cold markets, is getting contracts all the way to closing – hard to see how the hand-holding, support, and advocacy that good Realtors offer can be replaced by an online service.

Possibly the types of transactions where real estate online services will have the best chance of going the distance way from home search or listing to closing are those where the property is commoditized – for some investors, for example, or for home owners who don’t get emotionally involved with their primary residences. It works for cars, so why not for homes for those instances, but for many people, the emotion-laded factors rule great challenges.

We’d love to hear from all potential advertisers — you can use can this link to contact our ad sales team:
http://www.zillow.com/feedback/AdvertiserSignup.htm?origin=Home%3AHome
And see our ad specs here:
http://www.zillow.com/corp/AdGuidelines.htm

Let me clarify that because of the effort involved — mostly for the advertiser — in creative design and campaign management, our current ad products are best suited to advertisers who plan to spend at least a few thousand dollars. That said, many mid-size brokerages and developers have a healthy online advertising budget — and they should find our ad specifications match their existing creative. The rate at which that ad budget is spent depends on the ad type purchased and geography targeted. Ad campaigns serving high-traffic neighborhoods will sell through fastest.

Our next ad product will make it simple for smaller companies to purchase advertising on Zillow.

Actually, rather than trying to just be the encyclopedic list of homes for sale, Zillow took another step to becoming an encyclopedic list of all homes — not just those that for sale. We’ve started collecting and publishing more interesting information about many of the homes that were already in our database. Sellers can post that their homes are for sale on Zillow and provide their agent’s contact info. With sellers’ support and that of many listing agents, I think we have a great chance of attracting an interesting inventory on Zillow. It’ll be interesting to see where we are a year from now.

Zillow has put together a nice business model though, and I’d wager that their existence will accelerate change in the industry.

Galen can speak for himself, but, of course, I have said nothing of the sort. Almost all of my coverage has been devoted to the Zillow upgrades’ effect on other Realty.bots. That nothwithstanding, your work on the advertsing model is very informative.

Certain brokerages may discourage their agents from posting their listings on Zillow and they would certainly be within their rights to do so. No one has an obligation to help build another websites content or popularity, and it does not violate anti-trust regulations to refuse to share copyrighted information with another business, be it competitor or partner.

Seeing realtors are required to make a decent attempt at selling the house, and Zillow is free, and all it takes is uploading a few photos they already have made for the MLS – well whats their excuse to NOT list on Zillow. Is it ethical to NOT put a principles house on a free internet site that generates millions of visitors daily?

All it’s going to take is 2-3 stroppy sellers making ethics complaints and it’s a different ball game.

I suspect we will have Zillow and the NAR-MLS running as dual systems for a few years. Then the MLS will simply no longer be needed.