n ON THE MARKET
FRIEND OR FOE?
Zillow and websites like it are valuable tools — but they don’t tell a full story
BY Ryan Lundquist
MY WIFE LOVES ZILLOW, WHICH SHE
SOMETIMES APOLOGIZES TO ME FOR
— she worries that her love for the web-
site somehow disrespects me as an ap-
praiser. Truth be told, I like Zillow too.
But I do question whether consumers
trust it and other similar sites too much,
and in doing so, make pricing mistakes.
Founded in 2004, Zillow originally
seemed to simply be an innovative web-
site where consumers could get a ball-
comstocksmag.com | April 2019
park valuation of houses both on and off
the market. But now Zillow is a house-
hold name with over 4,000 employees
and astonishing brand recognition.
For years, the real estate commu-
nity has been wondering about Zillow’s
end game. Many figured the company’s
business model was built on earning
revenue from agents paying to adver-
tise on its site. When you find a home
on Zillow and click “contact agent,” you
are connected with somebody who has
paid to be listed as a “premier agent” —
whether that person is a neighborhood
specialist or not.
These days, however, we’re begin-
ning to see Zillow’s strategy is actually
much bigger. Zillow recently bought a
mortgage lender, and the company is be-
ginning to buy and sell homes. It seems
The Big Z (as I like to call it) is emerging
far beyond its beginning as a valuation