Aggregators are sites that glean info from other places and combine it all together for re-publication to the public. Realistically, aggregators can be a good thing. The problem comes when the information gleaned by the aggregators is not accurate or complete. Remember the old adage, "Garbage in. Garbage out"? How is the public to know the difference when an aggregator portrays itself as an "expert"?
Real estate professionals are always checking new real estate aggregators. First there was a big flap about Zillow which promised to give accurate valuations of homes. Now there's a new kid on the block, Cyberhomes. Many consumers don't know about these sites and don't care. Many real estate agents don't know, but those who do have varying opinions. Some consider these on-line evaluators of a home's value to be a threat. Others are fearful that the public will take the on-line valuation as truth.
Well, the truth is, if it's in writing we tend to think it's so, but I'm here to say, "It ain't necessarily so!" I tried Zillow out when it was first released. It was kind of fun checking my current house and my old house as they were recent sales and Zillow "should-a known". Zillow didn't know! Didn't have a clue. The valuation of both houses was off by tens of thousands of dollars and blatant errors were made by comparing my downtown St. Paul house with south Minneapolis houses to determine value. An agent would never do that. It's in a completely different market area! So, I basically told my reading public, "Play with Zillow. Treat it like a game, but don't believe a word it says!" A month ago Zillow acknowledged it needed help and asked homeowners to log on and make corrections to their aggregated information. Even with the homeowner's input, it's still not going to give a good market value. No machine can evaluate like a human can!
The new kid Cyberhomes moved in and I had to go "make nice". I tried the same two houses to see if there was any better information spewed from this aggregator's mouth. Amazingly, my current house came up, and guess what? The aggregator generated the perfect tax value, just what the county says my house is worth along with the fact that the county has errors for "date built" and the number of rooms. Cyberhomes very carefully spit out the exact misinformation they had gleaned from the county. The value was getting closer because the county based their value on our last sale.
The house we sold in New Hope didn't even exist! We sold it 2 years ago so the sale has to be in Hennepin County's records by now. The 4 neighbors around the old house who had not been sold in 15 years all showed up, but the one we sold which was that neighborhood's most recent sale was invisible! Boo, hoo! I really wanted to see it on the aerial photo!
So, if you want to have some fun checking out what the aggregators think your home is worth, go right ahead. Just remember that a beautifully programmed computer will never be able to evaluate your home's value the way a human with experience and first hand knowledge can! Just because it's written does not make it so!
Amen sister Bonnie! I love to play on Zillow. I actually always run my listings through just for funsies. Normally when I meet with potential sellers and bring up Zillow they don't have clue what I'm talking about. I think most of Zillow's visitors are probably Realtors checking in to see what all the fuss is about. Zillow poses no threat at all to my business. It's a game/toy! And it's fun:)
Posted by: Bryant Tutas | November 10, 2006 at 04:13 PM
The only danger from my perspective, Bryant, is if the public thinks these aggregators are accurate. One always needs to check the info with other reliable sources!
Posted by: Bonnie Erickson | November 10, 2006 at 06:23 PM
Hi Bonnie, fine analysis!
Cyberhomes is pulling data off county recorder's records via the Fidelity title database. I have an account with a Fidelity title shop and confirmed through checking the data that it's the same database (no challenge there). Second, Cyberhomes' valuation algorithm is likely based on a "Market Trend" function that I have used within the proprietary title database, but it doesn't match up. However, the proof of the pudding is both Cyberhomes and Zillow value off some algorithm that does not reflect market value... and like Bryant says, it's a fun parlor game.
I have a brief strategy analysis on Cyberhomes, Fidelity Title's entry into the consumer facing web 2.0 space on my blog - http://tinyurl.com/y2slxs.
--pk
Posted by: Pat Kitano | November 11, 2006 at 12:32 PM
Thanks, Pat. I highly recommend my readers check out your analysis!
Posted by: Bonnie Erickson | November 11, 2006 at 02:37 PM
Thanks Bonnie! I just noticed the tinyurl link isn't working... here is the complete link to Cyberhomes -
http://transparentre.com/2006/11/09/cyberhomescom--title-insurance-now-has-a-consumerfacing-website-with-a-1999-style-name.aspx
Posted by: Pat Kitano | November 12, 2006 at 02:54 PM