Trulia Files to go Public – Raise $75 Million

Trulia is one of the big real estate search engines that has seen rapid growth in traffic over the past several years.  They, along with Zillow and Realtor.com to some degree, are seen as third party aggregators in real estate search. I’m a fan of Trulia and believe they have been very innovative in pushing the technology as well as usability of real estate search across the country.

Today Trulia filed for an IPO to raise $75 million.  The ticker will be TRLA. No news yet as to what the overall valuation of the company is when they raise $75 million.  JP Morgan Chase and Deutsche Bank are the lead underwriters.  Accel Partners and Sequoia Capital are the private equity firms involved in originally funding the company.

According to the Associated Press story running on Yahoo! Finance:

Trulia, which operates both a traditional website and mobile apps, allows people to research home listings and neighborhoods, while helping real estate agents market their listings. In the six months ended June 30, the site had 22 million unique visitors. And as of the same date, it had more than 360,000 active real estate professionals, with 21,544 of those paying subscribers.

The company’s searchable database includes more than 110 million properties, including 4.5 million homes for sale and rent. Listings are supplemented with local information on schools, crime and neighborhood amenities.

It will be interesting to see the reception to Trulia’s IPO.  Zillow, it’s biggest competitor, had a successful IPO a year ago and Zillow now has a valuation of over $1 billion.

Is Zillow Continuing to Mislead Real Estate Consumers About What Homes Are For Sale?

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There has been quite a bit of news lately about many real estate brokers discontinuing their relationship with third party aggregators on the web such as Trulia and Zillow…even REALTOR.com.

Here is a blatant example of why what you see on Zillow cannot and should not be trusted.  This is a technology company that happens to play in the real estate space.  Their business model is designed to get in between the REALTORS® and consumers.  It’s not in their best interest apparently to make sure that the information they have on their web site is current and accurate.

Take a look at this listing on Zillow.  A client of mine just sent it to me to check out.  Zillow is showing that the home is still for sale (today’s date is February 6, 2012).  However, I went in to our MLS to check the status and it turns out the home sold and closed on November 22, 2011.  (Note the link will expire in 90 days).  The listing broker was Independent Brokers Realty, LLC and the selling broker was RE/MAX Action West, Inc.  It has actually been OFF THE MARKET SINCE OCTOBER 17, 2011.  That’s 113 days that this home has been on the market FOR SALE on ZILLOW and yet the MLS in the Minneapolis area (NorthstarMLS) shows that the home went off the market on October 17, 2011.

I understand that many people don’t like REALTORS®. I get that, but you have to know that we at least have rules and regulations we are bound by and if we are found to be breaking them, we can be fined or even have our licenses removed.  REALTORS® are obligated by the Code of Ethics to be truthful in our advertising and communications…and that of course includes the marketing of property and whether or not it is still available.  Below is from Article 12 of the REALTOR Code of Ethics:

Article 12

Realtors® shall be honest and truthful in their real estate communications and shall present a true picture in their advertising, marketing, and other representations. Realtors® shall ensure that their status as real estate professionals is readily apparent in their advertising, marketing, and other representations, and that the recipients of all real estate communications are, or have been, notified that those communications are from a real estate professional.

………………………

  In marketing properties, Realtors® use advertising to inform the public about listings and to induce interest in them. Realtors® are obligated to present a “true picture” in their advertising and in all representations to the public. A “true picture” is truthful, accurate advertising, and nothing less.

Third party real estate web aggregator sites are not obligated the way that REALTORS® and brokers are.  If you want a true and accurate picture of the local real estate market place and what’s for sale, then you really should be using a local broker’s site.  In the Twin Cities, all the real estate brokerages agree to reciprocity which means that every other broker’s listings also show up on every other broker’s web site.  You don’t have to go to 3 or 4 or 5 different web sites to see what’s for sale.  You can pick whichever one you like the best and that will display what’s for sale.  If you go to Zillow, Trulia and REALTOR.com then yes, you need to go to a variety of sites and even after you’ve done that, not only will you not have seen everything that is actually for sale in the Twin Cities market, but you will be mislead in to believing that certain properties are for sale.

Zillow is a public company worth $875 million as of today.  Perhaps some enterprising reporter or even Wall Street analyst might ask the executives some questions about their business model.  Is it their intention to purposely mislead real estate consumers in order that they can sell more advertising and lead generation programs?  Someone please tell me how this is an ethical business model.  And REALTORS® who are advertising on their site hoping to attract unsuspecting buyers with misinformation, is this really something we should be participating in?  We are perpetuating the problem.

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Are Third Party Real Estate Aggregator Sites Using Black Hat SEO Tactics to Block Real Estate Brokers?

Anyone who pays attention to internet marketing and specifically SEO (search engine optimization) strategies knows that black hat tactics are frowned upon in the business.  The big battle in real estate right now has to do with the web.  Over the past 5-6 years, the rise of third party real estate aggregators has been the cause of concern for real estate brokers.  The risk has been that the third party aggregators would disintermediate the brokers and real estate agents by being the first point of contact for real estate consumers on the web.

Real estate brokers lost control of their listings many years ago.  I think they were fooled by the allure of the web and getting additional exposure for their listings. They gave the listing information away for free in hopes of more eyeballs seeing their listings.  Many did not realize they were giving away the store when they did that.  More recently, real estate brokerages are fighting back and no longer allowing their listings to go to many of these third party aggregators such as Zillow, Trulia, and REALTOR.com.

Now these third party aggregators are being accused of using black hat SEO tactics to cut off links that go back to the original brokers site.  If this is true, that’s quite a stunt these sites have pulled off.  Let me get this straight, real estate brokers send their information to these third party sites for free, the third party sites use the listing data to generate tens of millions of dollars in advertising revenue, banner sponsorship sales, and then possibly lead referrals, and they are inserting “no follow” on the links back to the original brokers?  If that is true, why are we doing business with these firms?

Check out the story from AGBeat on what the CEO of VHT is accusing the third party aggregators of when it comes to black hat SEO for real estate.

If you are a real estate agent or broker reading this, I recommend that you share this post with others in the business so that they can understand the ongoing challenges the real estate industry faces with these third party aggregators.  In case you missed my last post, you’ll want to read about ARG Abbott Realty in San Diego pulling their listings.

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ARG Abbott Realty Group Pulls Listings from Real Estate Syndicators – Hammers Zillow, Trulia and REALTOR.com

I’ve come around on this issue and now agree with Jim Abbott, President and Broker for ARG Abbott Realty Group in San Diego.  (Edina Realty pulled its listings from the syndicators about two months ago and were one of the first of the larger regional brokers to pull the plug).

Jim Kelly’s 7 minute video absolutely shreds Zillow, Trulia and REALTOR.com as ripping off REALTORS as well as misleading consumers.  I find this all the time with these sites.  Over and over again the data is not accurate and up to date on Zillow or Trulia.  (I’m not quite as familiar with REALTOR.com and how good they are at keeping data accurate).  Zillow and Trulia will often lead properties listed for sale even though they are no longer on the market.  I see this time and time again.  I suspect they will contact me and tell me I am wrong, but I can back that up within 5 minutes of searching right now.

It is now time for ALL BROKERS to PULL THEIR LISTINGS now from Zillow, Trulia and REALTOR.com.

I encourage you to watch Jim’s outstanding video of clearly explaining what is going on.  Thank you Jim!

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Finance & Commerce: Edina Realty’s War on Trulia and REALTOR.com

Finance & Commerce has now picked up on this story that Craig Kamman broke last Tuesday afternoon regarding Edina Realty’s decision to no longer send its listings to third party real estate web aggregators.  This really is setting up to be a significant battle in the real estate industry.  It’s brokers vs. web site aggregators.  Home sellers and buyers are caught in the cross-hairs.

Coldwell Banker Burnet, the second largest real estate broker in the Twin Cities by agent count, came out and stated that they are not pulling their listings from REALTOR.com or Trulia .  No word yet from the company I work for, RE/MAX Results or from corporate RE/MAX International.

If you’re getting to this debate late, then start with Craig’s original post (as noted above) then I have posts here and here….and of course, don’t miss Edina Realty’s press release on the matter.