How much is a “transaction-ready” buyer worth? Real estate giant Zillow Group may find out when it relaunches the newest addition to its portal arsenal, RealEstate.com.
Last month, Zillow Group announced it would revamp the domain as a consumer search portal targeting millennial homebuyers.
Now, multiple sources have confirmed that Zillow Group plans to incorporate a search feature that will spell out the overall cost of owning a particular home, beyond mortgage payments — a feature that serious would-be buyers are particularly likely to be interested in.
The sources, most of them MLS executives who attended Zillow Group’s MLS Forum last week, spoke to Inman on condition of anonymity because the company asked attendees not to divulge any details about plans for the site shared onstage at the conference.
The feature will reportedly be called Total Cost of Ownership, and may be taking a cue from TLCengine, a three-year-old real estate startup that offers a predictive analytics-powered affordability calculator that serves up a home’s “True Lifestyle Cost” and allows consumers to search based on that TLC.
The new RealEstate.com, which Zillow Group has previously said will launch in May, will also reportedly allow users to access photos without leaving search results and be fed from the same listings database as Zillow and Trulia.
Zillow Group did not deny the reports, but declined to comment for this story. In an emailed statement, spokeswoman Amanda Woolley said, “We don’t have anything else to share beyond what we’ve already discussed.”
RealEstate.com bundled into Trulia acquisition
Zillow Group acquired the RealEstate.com domain with its purchase of Trulia in 2015 and it currently redirects to Trulia.com.
According to Zillow Group’s 2016 Consumer Housing Trends Report, millennials, who often shop for homes using technology and are more likely to find their agent online, comprise the largest homebuyer segment (42 percent).
“We’ve spent a great deal of time thinking about millennials, how they approach real estate and the experience they expect during the search process,” said Jeremy Wacksman, chief marketing officer at Zillow Group, in a statement last month.
“We know from our own research they are driving the housing market as half of homebuyers in the U.S. are under 36 years old. This represents a huge opportunity for agents to connect with this growing audience of buyers.”
The vast majority of Zillow Group’s revenue comes from agents that advertise on its listing websites through its Premier Agent program.
Imitation is the best form of flattery?
When TLCengine CEO Krishna Malyala first heard of Zillow Group’s plans from a handful of MLS executives that attended the forum, he said he was “shocked, flabbergasted, honored.”
Krishna Malyala
He said he had dinner with Zillow Group CEO Spencer Rascoff a mere year and a half ago and told him about TLCengine. “Copying is the true form of flattery. We’re super excited [because] it means we’re doing something right,” Malyala told Inman.
“Congratulations to Spencer for bringing this to help the consumer. Even if it’s not us at least we’ve moved the needle and changed the industry. That’s the coolest part for me. We as a small company forced a [multi]billion-dollar company to change their product to match what we’re doing,” he added.
Zillow Group did not come to TLCengine to partner on this new feature, so Malyala isn’t sure how closely TCO will mirror TLC.
TLCengine’s patent-pending technology factors more than 100 variables into its True Lifestyle Cost, including mortgage payments, property taxes, child care, commute costs, home and auto insurance, and utilities. He believes Zillow Group may incorporate some of these variables, such as utilities, but probably would not incorporate commute costs or the ability to search for listings by commute.
He also doesn’t think Zillow Group will include the “lifestyle” portion of TLCengine, which calculates costs based on household size.
“We break it down into five different lifestyles: singles, couples, couples with young kids, couples with older kids, empty-nesters,” he said.
Consumers “want a holistic picture” of a specific home and what it will really mean to them as individuals if they were to buy it — without having to figure out those calculations themselves, according to Malyala.
“It’s a true mashup of your customer profile and our data that makes [TLCengine] unique,” he said.
“If it’s not integrated and contextual it’s meaningless,” he added.
While Zillow is a site that consumers go to when they’re in “dream stage,” Malyala sees TLC as a “decision engine” that will help consumers make better financial decisions when they’re ready to take the plunge.
“A lot of people underestimate all those hidden costs. There are so many people in the industry that just want to sell you a house, to close the deal. We’re a financial planning tool … to help people not only buy the home of their dreams, but to make sure they can afford it,” he said.
MLSs have been incorporating TLCengine into their public-facing listing sites in part because of its ability to differentiate between a buyer who is truly interested in buying — and therefore likely to engage the services of an agent — and one that is not, according to Malyala.
TLCengine gaining traction
Multiple listing services representing nearly 83,000 agents and brokers have deployed TLCengine’s platform, according to Malyala: NorthstarMLS, My Florida Regional MLS, the Lafayette Regional Association of Realtors, and MLSOK. The company has also signed up two other MLSs but declined to name them pending official announcements in a month or two.
MLSOK, a 5,300-member wholly-owned subsidiary of the Oklahoma City Metropolitan Association of Realtors, just launched its new website implementing the TLCengine tool this week. Mlsok.com replaces the MLS’s old site, centraloklahomaproperties.com, and allows users to search for listings in 21 counties in Oklahoma.
The old site was not advertised and needed a facelift both esthetically and technologically, MLS Manager Juli Pleitner told Inman via email.
“[T]he technology offered by TLCengine was so unique to any other technologies reviewed, it was selected as vendor for mlsok.com,” she said.
“The consumer profile goes beyond a quick name and email address. It asks for detailed lifestyle and budget information which, let’s face it, the average window shopper isn’t going to take the time to complete.
“And, they don’t have to if they’re not ready! It will be there when they are ready to start the process, thus giving that consumer the tools to look at the big picture while connecting them with the professional who can guide them through the transaction.”
Editor’s note: This story has been updated.
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