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Ebay Should Buy Zillow
By Max | December 9, 2007
I have been doing some thinking, and have come to the conclusion that ebay has a fantastic opportunity to grow into the real estate market. Its so ridiculously obvious, that I am surprised they haven’t already tried to make an aggressive move into real estate. Over 5 million existing homes are sold each year. The national average price is about $200,000. That works out to $60 billion in realtor commissions (6%). If ebay charged $1000 for a house listing it would represent a savings of $11000 to the average home seller instead of using an agent. If ebay managed to capture just 20% of the market, it would represent an additional $1 billion to revenues. I believe if they managed to snag 20%, the remaining sales would follow shortly. Further expansion into the escrow and mortgage origination business through paypal would certainly be possible. I believe if ebay developed a decent marketplace, homesellers would love the opportunity to sell their home in just 30 days on the auction block.
There are two problems to overcome with an entry into the home sales market. Ebay needs to get a lot of listings and a lot of buyers’ attention. Currently a few homes are sold on ebay. One problem is that few people know to go look there for houses. This in turn creates a problem for getting listings. Who wants to sell a house to a limited number of people? This creates a chicken and egg problem. More listings generate more buyers interest which generates more listings.
There are several things ebay could do to jump start their real estate marketplace.
#1. Getting the Buyers:
Buy Zillow.com. Either that or just partner with zillow, so that every person who is selling their home through zillow has the ability to link their home to an ebay auction. Zillow is a well put together site. I am sure they must get a ton of traffic from potential home buyers. Ebay could step in and snatch all that up really cheaply right now. They paid $2 billion for skype which earns them nothing and offers little synergy with their existing business. Why wouldn’t they want to pay less for a company which would almost certainly build ebay’s business.
#2. Getting the Sellers:
Acquire or partner with foreclosure auction houses. These guys are already auctioning off a ton of foreclosures. Ebay should get in on the action. Right now the foreclosure market is booming, and they are already selling through auctions. I can’t think of a better way to jump start a bunch of listing to generate buyer interest. Traditional sellers will be sure to follow the auction lead once they see how quickly ebay can sell the foreclosure inventory.
#3. Temporarily, ebay might have to cross list their auctions on MLS. This would only have to be done long enough to break down the MLS monopoly.
#4. An advertising blitz in the current real estate market will almost certainly generate interest. There are many sellers who have been sitting on their homes for months trying to sell. If they knew they could sell in a 30 day auction for the market price, I believe many would jump at the chance. Likewise, I can’t think of a better way for buyers to search for a place to live than ebay. I imagine many buyers have grown frustrated with MLS’s overpriced listings that are slow to come to terms with the reality of the current real estate market.
The MLS real estate market place has held a monopoly far too long. I sold my house quickly and easily through craigslist saving myself thousands of dollars. The internet IS the disruptive technology which will crack the MLS monopoly. There is too much money involved and the current system is too inefficient. Ebay has a brilliant position to lead this new market if they chose to embrace it. If you think I am wrong, ask yourself when is the last time you booked travel through an agent.
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December 18th, 2007 at 7:39 pm
Hey, been a while since I’ve visited. Back! I dug this story good one! I recently sold a bbq trailer on ebay for 22k so I fully support them for large transactions. Just coordinating all the local codes, titling, bull crap which is different in every county would be a henderance.
Yeah, blogclutter is a new site, I am hoping it will catch on!
December 18th, 2007 at 7:39 pm
O yeah, my PC is trying to block some kind of downloader for each page that I load on maxtower.com. Whats goin on?
December 19th, 2007 at 3:28 am
I am not sure whats up with the download blocker. I don’t have anything that I am aware of that would be doing this.
December 19th, 2007 at 10:28 pm
It does that on mine and mom’s as well!
December 20th, 2007 at 2:33 am
OK, I have upgraded wordpress. Does it still give you the virus checker thing?
December 20th, 2007 at 11:18 pm
Nope good now! Thanks!
December 20th, 2007 at 11:20 pm
Nope after I said that it popped up again - Blocking a downloader
December 22nd, 2007 at 3:44 am
Ok,
I think I have fixed it now. Let me know if you get any further problems with the javascript. I just hope it hasn’t infected my computer.
December 28th, 2007 at 2:36 pm
ZZZZZzzzzzzzzzz……
Post more about boobies!!
January 19th, 2008 at 10:59 am
Where did you go Max?
January 20th, 2008 at 11:46 am
Need topics? Isn’t it almost your favorite holiday?