Nav Athwal elaborates on why Trulia, Zillow, and other online real estate search engines were created and how the real estate world utilizes them now.
By agents and brokers working in tandem with online real estate search engines, buyers and sellers are given transparency over values and trends.
Mike: Welcome back to the FlipNerd.com REI Classroom, where experts from across the real estate investing industry teach you quick lessons to take your business to the next level. And now, let’s meet today’s expert host.
Nav: Hi. My name https://flipnerd.com/wp-admin/media-upload.php?post_id=452181&type=image&TB_iframe=1is Nav Athwal, CEO and Founder or RealtyShares, and you’re joining us here in the REI Classroom. Where today, we’re going to talk about how platforms like Zillow and Trulia have impacted the real estate market and some of the long-lasting impacts these platforms have had on how real estate investing and buying works.
Mike: This REI Classroom real estate lesson is sponsored by UglyOpportunies.com.
Nav: Zillow and Trulia were really born in the mid-2000s, 2005, 2006, and initially their mission, their vision was to really displace real estate brokers. Make them obsolete, make them unnecessary, and allow consumers to transact through an online platform where there’s less middleman, fewer fees, etc. I think that was a pretty lofty mission, and given how integrated real estate brokers and other real estate stakeholders are within the active buying and selling of real estate. I used to be a real estate broker myself so I know that firsthand.
So early on, I think that was the vision. But you quickly saw them change their tune and really become less about, “We’re going to make the real estate broker obsolete,” but rather, “We’re going to work with real estate brokers to present data and information to the clients of the brokers in a more intelligent, more transparent way.” So I think that’s really interesting to see, is you see this lofty mission of trying to change the way people act and the way that people behave to really, “We’re going to make it easier for them to do business as usual.”
I think that’s the big reason Zillow and Trulia were able to succeed and then become billion-dollar companies. Now, obviously, they’ve merged and Zillow acquired Trulia in 2015, 2014 so I think those platforms have been very successful. So I think getting beyond their initial vision and mission of, “We’re going to change the real estate market and really change customer behavior,” which I think always ends up leading companies down a path that tends to not lead to success because consumers and individuals are reluctant to change the way they work and the way they behave to really becoming partners with brokers and making real estate data more transparent.
So I really want to focus on the latter piece because I think that’s really what these platforms are known for today. Before these platforms existed, you wanted to buy a home, you wanted to sell a home, you needed to rely on your real estate broker for every part of that transaction. From pricing the home to figuring out what kind of buyer interest there could be, to figuring out how long your property will be on the market so real estate brokers really had all the power before platforms like Trulia and Zillow.
Although, initially, the goals were, “Let’s remove the broker and make the transaction process broker-free,” what Zillow and Trulia were really able to accomplish is transparency along that process. So rather than having to rely on brokers for every step of the transaction, now consumers could go online, type in their address, get Zillow’s or Trulia’s estimate on what that property is worth, how long that property will be on market, if it’s listed for sale, what kind of price appreciation that market is seeing. So it’s really allowed consumers, buyers, sellers of real estate to take a lot more control in the buying process, hold brokers more accountable than prior to the Zillow/Trulia era.
I think, again, although they did not replace brokers and were not successful in their initial vision, I think the success of these platforms is apparent in the level of transparency they were able to create in the real estate investment market. At RealtyShares, where we do help finance single-family homes, apartment buildings, retail centers, we rely on Zillow and Trulia heavily as the first stop in determining the value of a property that we’re looking to finance. So again, I think the transparency and the access to data these platforms were able to create is really the long-lasting impact I think these platforms have made to the buying and purchasing of real estate.
I’m excited to see how they’ll continue to make that level of transparency greater over time as they continue to capture more of the market and become bigger than they are today. So again, you’re joining us here in the REI Classroom, where we’re talking about the impact of Zillow and other online real estate search engines on the real estate market. Until next time, talk to you later.
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