Sam DeBoard had an interesting piece the other day at Inman about Zillow and Move in the aftermath of two key Move execs jumping ship to their competitor (which I blogged about here). He speculates that maybe Zillow’s next move should be to acquire Move outright, eliminating one of their two chief competitors at a stroke and ameliorating what many Realtors perceive as a huge problem for them, the relative inaccuracy of their listing data:

“Zillow has done better with brokers and agents, but the broker-only route is daunting. They’d need to partner individually with the 150,000 real estate brokerages in the U.S., as opposed to the less than 900 MLSs they’d need to gain the same listing access. The lack of clean MLS listing feeds is the source of Zillow’s data issues, from duplicates to solds and outdated listings.  Meanwhile, realtor.com sits on 860+ MLS feeds, with most of them updating every 15 minutes.  The contrast is striking.”

That paragraph got my wheels turning, though.

1) How many of the 150,000 would they have to partner with to get, say, 80% of the listings? Real estate’s always been a strong industry for the Pareto principle, hasn’t it? The Project Upstream/The Realty Alliance pre-MLS thing…if you have the top ten franchisors, and the top 100 independents feeding you directly from their back ends, how much of the market are you covering, at that point?

2) Are Zillow’s data issues even really all that much of a problem, for Zillow? Agents complain endlessly about inaccurate data on the site — and I can see why, since they’re the one who have to deal with the headache of walking consumers back from mistaken assumptions and finding someone at Zillow to fix mistakes on any listings they may have personally. That takes time and effort….from the agent, not Zillow.

Agents like to bang on about how much more accurate MLS data and MLS-fed sites are, but so far these complaints seem to have done bubkis to drive consumer eyeballs away from Zillow. I’m sure that having perfectly accurate data would be nice and consumers would like it, but consumers seem to prioritize the quality of the website and the lack of implied sales pressure from a “neutral” third-party site well above accuracy (no putting in your email address just to see photos, etc.).

So if consumers don’t care much about accuracy and being inaccurate (up to a point) costs Zillow very little, what’s the pressure on them to change? It seems to me that Zillow has a strong interest in being sufficiently comprehensive — they definitely want to make sure that any buyer anywhere can go to them and find homes in their area for sale — but they can get that just as easily by signing up a few of the top brokerages in each area.

3) The other thing about MLSs data accuracy is that, well, it’s a largely stick-centric phenomenon, yes? I mean, the folks at Agent Genius have been running a post series for forever making fun of all the screw-ups and typos found in MLS listings. Inasmuch as that stuff gets cleaned up, it’s because MLSs have the ability to wag their fingers and say, “follow the rules or you don’t get paid.”  But lately it seems like a lot of big brokers don’t like following MLS rules. If they start feeling like belonging to the MLS puts a crimp in their ability to get paid, instead of enhancing it…one wonders how long the MLS can retain its place as the most accurate source of real estate information.

Given all that, the idea that Zillow is licking its fingers just dying to acquire the obviously superior Move network seems off to me.

Would Zillow really gain anything by acquiring Move?

by Banker & Tradesman time to read: 3 min
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