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Zillow "instant Offers" Looks Like An AMC For Real Estate Agents

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Davy

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Joined
Oct 3, 2016
Professional Status
Certified Residential Appraiser
State
North Carolina
http://www.inman.com/2017/05/22/zillow-launches-instant-offers-pilot-program-for-homesellers/?utm_campaign=AddThis&utm_source=email&utm_medium=social#.WSRWFqGmHzQ.email

The more I dug into the story, the more it seems like this is a way for Zillow to get in between RE agents and the public. Their "service" is a lot like an AMC, it seems, and offers little (although some) value added, the way an AMC works. Initially, they don't make a profit from their pilot program, but I think when the real estate brokerages eventually start folding will someone wake up, but it may be too late by then. Zillow appears to be a monster that agents and others who pay them for their referral services eventually grow the monster so big that it will eventually get in and take the money one way or another. The story just struck me that Zillow is acting like an AMC (or brokerage which they claim they are not), coming in between the real estate agents. The more popular their service becomes, the more market share they will take and the more they will be able to leech from the transaction. Brilliant in a Machiavellian sort of way.

Please read this article and share your thoughts!
 

Red Flint

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Joined
May 15, 2005
Professional Status
General Public
State
Michigan
Can't link to inman.com

Try this:

http://www.housingwire.com/articles...nto-home-selling-business-with-instant-offers

'professional valuation' is a CMA, likely higher than zestimate. Buyers will be smart to order an appraisal. Hey, how about the AI investing $50,000 into Zillow so that a one sentence prompt is put in - 'good risk reducer is for the buyer to order an appraisal.'

A good benefit of the whole AMC infusion is that the general public is becoming accepting of residential appraisal fees may be upwards of $500 now when $300 used to be a benchmark. When the AMC is not part of the appraisal assignment, the 20-100% of the fee taking belongs to the appraiser.
 

Cigar

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Joined
Aug 9, 2007
Professional Status
General Public
State
California
Here's a way you guys and gals can make a million dollars fixing Zillow:

Market Watch said:
One week after being slapped with a class-action lawsuit over its popular “Zestimates” home price tool, the popular real estate marketing company Zillow is striking back.

Zillow on Wednesday announced a $1 million prize would be awarded to the “first person or team who can most improve the Zestimate algorithm.”

The algorithm in question is meant to be a starting point to help people estimate the value of a property, Zillow stresses. But the class-action complaint, filed by suburban Chicago home builders, argues that home buyers view the Zestimate as if it were an official appraisal nonetheless.

In a release, Zillow noted that “to homeowners, sellers and buyers, the Zestimate home valuation remains an important data point. Combined with other information, like recent home sales, and the guidance of real estate professionals, the Zestimate helps consumers make smarter financial decisions.”

The company claimed that its error rate nationwide was 5%, a level it called “incredibly low,” while acknowledging that it could be improved.

Read:Zillow advertising under CFPB fire sets real estate industry on edge

“The next round of innovation will come from imaginative solutions involving everything from deep learning to hyperlocal data sets — the type of work perfect for crowdsourcing within a competitive environment,” Zillow’s chief analytics officer, Stan Humphries, noted.

Anyone interested in offering a solution has until October 16, 2017, to compete in the qualifying round. The top 100 entries from that round will be invited to participate in the final round, which will begin February 1, 2018 and end January 15, 2019.¹


¹ http://www.marketwatch.com/story/ho...ing-1-million-to-improve-its-model-2017-05-24
 

Davy

Sophomore Member
Joined
Oct 3, 2016
Professional Status
Certified Residential Appraiser
State
North Carolina
Apologies! I had no idea the link didn't work for anyone else. I uploaded the article here. It was too long to post it so I put it here.

Red Flint--thanks for letting me know.
 

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