Zillow.com, the latest venture from Expedia (Nasdaq: EXPE ) founder Richard Barton, recently announced that it would allow users to sell their homes online, potentially letting sellers completely bypass real estate agents if they wish. While Zillow.com is fairly new to the real estate market, I would expect that competitors like HouseValues (Nasdaq: SOLD ) , Move.com (Nasdaq: MOVE ) , and especially traditional real estate agents felt the earth shift quite a bit upon hearing the news.
Zillow's new additions go beyond self-listing. While users could previously edit home details, they now have a much wider range of options available, including adding pictures, descriptions, and even a "Make Me Move" price. The "Make Me Move" option allows homeowners who are thinking about selling to set a dream price and see whether someone makes an offer.
Zillow.com does cater to real estate agents, offering them a chance to attach their names and contact information to houses they are selling in the Zillow database. Quite a number of them have taken Zillow.com up on the offer; 70% of the houses listed for sale are from real estate agents. However, I believe the site provides far more power to regular homeowners by giving them another powerful tool to sell their homes. Zillow.com attracts about 3.5 million unique users monthly, placing it among the top 10 real estate sites on the web. Now it's a place where owners can hang that "For Sale" shingle for free.
Despite all the new features that Zillow.com recently added, it might be notable to focus on one key feature it didn't. ZipRealty (Nasdaq: ZIPR ) recently allowed users to comment on houses, giving visitors the ability to post negative feedback and discourage interest in a house that they wished to purchase, among other things. Zillow.com wisely chose to avoid such pitfalls.
While it will still take some time to determine the real effect of Zillow's actions on the real estate industry, it's clear that the site has opened up new opportunities for both agents and owners. Based on the activity so far, it seems that mostly enterprising real estate agents are taking advantage of the new features. However, it will be interesting to see the numbers after a longer period of time has passed.
I'd be willing to bet that the homes for sale will become closer to a 50/50 split between agents and owners, as owners increasingly try out the new tools and start to take more control over the buying and selling of their houses. Will these new features put pressure on agents to do more for their commissions? Almost certainly -- and that's a win/win situation for any homeowner.
Fundamentally, while one would expect offline brokerages to be most affected by Zillow -- much as Amazon.com (Nasdaq: AMZN ) has affected brick-and-mortar booksellers -- I think the early embracing of the site by real estate agents points to a different picture. I believe that sites like HouseValues and Move.com will be hit the hardest, since their business models are distinctly Web 1.0, with no user-generated content. Zillow.com's Web 2.0 model harnesses the power of its assembled users, and simply presents a more efficient way of doing business.
More housing Foolishness:
Fool contributor Stephen Ellis does not own shares in any companies mentioned. You canview the stocks he owns and check out histop 10 rankinginMotley Fool CAPS, the Fool's new stock-rating community. The Motley Fool has adisclosure policy.