In last week’s article we saw how people are using the Internet to find real estate today. As with so many other aspects of our lives, the Internet is our first (and sometimes only) source of information. But we need to remember that data is only as good as its source. I feel that many people forget this reality
As a consumer, you have many choices for websites that provide access to real estate listings. They are not all created equal by any stretch of the imagination.
I hear my husband have this conversation on a regular basis with clients –”No I can’t tell you why on (fill in the blank third party website – i.e. Trulia, Zillow, Redfin, RealEstate.com, Realtor.com) it says that property is still available for sale, but the MLS and the listing agent both say it’s sold.” He’ll get off the phone and say to me, “Why don’t they just use the service I’ve provided them that has the current info??”
In the professional real estate investor class, I introduce you to the sites that get you the most accurate data.
Buyers and sellers today have a vast array of websites that provide them with access to real estate listings. Let’s look at how the sites are created. They break down into three primary categories:
1) Third Party Websites
2) Franchise Websites/Broker Websites
3) MLS Feed Websites
Let me explain what the differences are and why.
Third party sites have attracted a wide consumer audience because these sites are very “sexy” with a lot of bells and whistles. Many of these sites have listing data that is inaccurate a great deal of the time, yet consumers continue to visit these sites because they create a fun, engaging experience for consumers, while the professional sites simply have the best data.
Third party sites are defined by WAV Group as: Consumer facing websites that are not operated or owned by real estate agents, brokers, associations or MLS’s. Some of these sites include Zillow, Trulia, Homegain, Cyberhomes and many more. They have a significant voice if you look at how many consumers use them. Unfortunately, they also have the lowest accuracy and completeness of listing information. A study done by WAV Group showed that data accuracy and completeness of listing information that is published to these third party websites have a range of being inaccurate somewhere between 20% to 92% of the time. They get their data from a variety of sources and, unlike the MLS which is controlled by strict rules and regulations; this data has very limited controls and therefore higher rates of errors.
Third party sites can have errors with the initial data. The bigger problem is the update of that data, changes made to the listing, such as price changes, listings that expire, or listing that have sold. What this means is that websites managed by the MLS and Real Estate companies will always have the most reliable local listing information for a given market.
There are a couple of very positive things these sites do. Their interface is very simple which creates very little frustration for the consumer. They also add the sizzle we talked about earlier – like Zillows “Zestimates” for comps. They also add neighborhood information and other important data when looking at purchasing real estate.
So, as they say – “buyer (or data user) beware”. Next week we’ll look into the agent/franchise sites and the MLS sites for non brokers.
Look for me on Hour with the Pros this week: The State of Real Estate and Where The Opportunities Are.