On the House: Zillow-Trulia 'merger' may bring big change - or not

Posted: September 01, 2014

A month or so ago, I interviewed three homeowners who had approached me after I wrote a column on the market's recovery, asking me why their houses weren't attracting buyers.

In the course of our conversation, Gail Whittle of Oreland asked me something I've been pondering:

"I'm wondering . . . if the plethora of property websites like Trulia and Zillow have changed the realty landscape," she said. "Do Realtors still work with couples and families the way they did when we were looking some 25 years ago?"

More than two decades ago, after observing the real estate industry for a few years, I wrote an occasional series - there were seven installments - titled "The Changing Face of Real Estate."

More than 25 years before that, my father had been a real estate agent and broker - part time, as many in the 1960s and 1970s were - and I would go along with him on appointments, simply to keep him company. (I may, in fact, have been the real estate industry's first - though unreimbursed - personal assistant.)

The seven-part series compared those days with the mid-1990s, which was before the advent of technology as we know it today. My focus was on professionalization, industry consolidation, the rise of boutique brokerages, and the influx of women and minorities into a business dominated when I was growing up by white men.

Technology has changed the industry more than anything, and Whittle's mention of Zillow and Trulia was particularly timely in light of the "merger" of the two search engines announced July 28.

"Merger," in quotation marks, because they say they will remain separate entities, but after watching real estate brokerages "merge" in the last 25 years, I doubt that will last.

Many of us have issues with the information that Zillow and Trulia provide - from prices that are not realistic, to houses placed in the wrong school districts, both of which are critical to the decision-making of the majority of home buyers.

Real estate agents complain almost as much about these search engines as they do about HGTV and how its programs make younger buyers think houses have to be perfect.

From what I understand, Zillow, Trulia, and HGTV haven't changed the way real estate agents work with buyers and sellers, but they sometimes make the job more difficult, which helps no one.

The industry appears to be on the edge of change again, and, no matter how real estate agents feel, it could go either way.

"This merger could very well be the test that determines whether the home-buying process will make the leap to a more standardized and nationalized process dominated by a relatively few big players, or will persist in remaining a highly localized and fragmented process with lots of relatively small players," said Kevin Gillen, an economist and senior research consultant at the University of Pennsylvania's Fels Institute of Government who tracks the local housing market.

Zillow and Trulia provide direct access to market information for sellers and buyers, which was once "the sole preserve of the local MLS and the real estate agents, who acted as the gatekeepers to that data," he said.

Though the sites often start buyers and sellers in the process, "it still ends with agents negotiating on their clients' behalf to close a deal," Gillen said.

Most people still consider that process complicated and risky enough to pay someone to help them.

Zillow and Trulia do drive traffic for agents, and the merger will benefit agents with the most listings able to pay more for the service provided.

Small agents will be the big losers, Gillen said.


aheavens@phillynews.com

215-854-2472

@alheavens

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