Zillow Changes the Rules of Real Estate

Zillow: New real estate strategies

Zillow has become a market leader in a brand new market: online real estate sales.


Zillow is a real estate search engine. Two Microsoft employees founded the company in 2006. Zillow offers a variety of services like property price calculator, rent/sell adds tax estimates, etc. Trulia and Realtor are Zillow’s main competitors in the industry. Zillow’s database access government data to get a general idea of real estate property features. Then, homeowners add relevant data about properties for rent or sell. The real estate industry is changing, thanks to online databases like Zillow.

The Strategy

Zillow has created a very complex and interactive database. Even though some of the information in their databases is not accurate, they offer general information and a very client-friendly interface. Zillow’s database core competencies are client interfacing/interaction and a variety of information. The amount of data they handle is impressive, their database is very complex. Its value proposition is offering clients an easy and interactive tool to search for a property or sell a property from your own home or on the go. They offer the client an opportunity to expand their home details and make it available to the public. Zillow is the first company to enter this market on a large scale, and it is still one of the few successful ones.

During the past years, Zillow has been a market leader. It has affected the real estate agent’s business. People are getting their own quotes and rental agreements through the web. Internally the company is working on keeping its database updated and running properly. It is also working toward improving price accuracy. Even though its price calculator method was built with a complex algorithm it does not always reveal the real price or context. Externally the company is facing other challenges. It is fighting in the market against its main competitors: Trulia and Realtor. At the same time is competing with real estate agencies. Real estate agencies specialize in every client, and they are concerned with Zillow’s poor performance putting numbers together.

Growth Challenges

Zillow is growing every minute, with new customers and real estate changes. Until now, Zillow has handled clients successfully. As more clients join, and the number of services increases, clients expect higher performance. Zillow differentiates from its real estate agent competitors with its online services, but there are some characteristics that are missing. Zillow also differentiates from its online competition with different services.

Main Challenge

Not all customers from Zillow browse in their database to buy, sell or rent a home. Some of them are only curious about area prices, celebrity houses, etc. Zillow can offer all this public information on a single website. Zillow would like to continue growing and expanding in the market, but it will have to overcome its main challenge. Its main challenge is: Not being able to give customers an image of reliability and accuracy. Realtors offer accurate and individualize information, there are large discrepancies between Zillow’s estimates and realtors quotes. Zillow is missing an individualized analysis. Not offering completely reliable information can bring several problems, since serious customers will want the best quote they can get. In the long term, Zillow may not be taken seriously by real estate investors. The tool may only be considered useful for people curious about the market and not serious customers. 

Zillow offers a more economical way to search for real estate information but is this may not be enough. More than 4 million people visit Zillow’s website every month. They may not be able to handle large real estate markets and transactions in the future. Zillow has a very clear differentiation strategy, but it needs to improve its quality assurance if they want to have better information for clients.