Landlord Shmandlord

I love the innovativeness of Zillow, and especially their new features (mainly Make Me Move).

It will be interesting to see how far they can take this. Can Zillow become a one-stop shop for buying/selling real estate, almost like what ebay did to the used-item market?

IE,

1. I put up a house on Make Me Move.

2. Joe is interested and responds to my offer through Zillow.

3. For a flat fee (a few hundred dollars?) Zillow acts as the coordinator of the sale, similar to what a real estate agent does now. They would verify Joe’s pre-approval and financial eligibility, schedule the inspections and closing, work with the title agent on the title search, etc. Ideally, there would be a very mechanical process that would have build-in provisions to handle the inevitable problems that would arise (ie, house doesn’t pass inspection, buyer can’t get mortgage, house blows up before closing, etc). Again, this is similar to ebay in some ways, in that ebay can handle deal-breaking issues that arise like buyers who don’t pay, items that don’t meet description, etc.

4. The sale goes through. No percentage would be paid, just a flat fee. (Also, Zillow wouldn’t collect their fee until the deal goes through)

I think one of the additional keys will be to open up their listings to other systems. There needs to be an open MLS-type site where I can go, see everything that is available, and initiate a purchase. This listing system must be comprehensive, which is why existing closed systems like MLS must be incorporated.

Obviously there are a lot of logistical issues, but it seems to me that this type of system is doable and that both the buyer and seller would really benefit (cheaper costs, comprehensive listings, standardized process).

As was pointed out in the last carnival, the National Association of Realtors has launched a $40 million campaign to end any softening promote the buying and selling of properties. Their slogan is “It’s a great time to buy or sell a home”, which obviously cannot be completely true.

Now, I’m not one of the extreme pessimists who believes that you will spontaneously explode if you own investment property early next year, but I do believe that the market will continue to soften and that it may not be the best time to buy or sell all homes. Over at The Big Picture there are two articles about this, but the second one titled Analyzing why “It’s a great time to buy or sell a home” dissects every line in the recent WSJ ad and explains why “every single statement in the ad is materially false or misleading”.

I think it’s worth a laugh read.

Also, here is the first article.