Merger Agreement Between Zillow and Trulia for $ 2 Billion
Bangalore : According to the report, online real estate colossal Zillow and rival property Trulia combined in a move to create merger agreement which would build an online colossus in a tradition bound diligence disrupted by giant technology change in recent years.
Zillow – popular and foremost online website based on the number of visitors is seeking to buy a rival Trulia for as much as $ 2 billion; this was soared on Thursday by Bloomberg that cited anonymous sources. Neither group would comment on the report.
Both admired sites have brought fabulous changes to the process of buying a home. Trulia has an easy application, which allows prospective buyers to shop on their own mobile phones. Whereas Zillow has the renowned way for homebuyers and realistic lookie-loos to estimate the home worth. A majority of Inman city and the realty industry vexed, the merging would harm consumers, importance to less competition and less innovation.
These both property sites are most visited by American consumers. According to the market research firm Comscore and nearly 90 percent of the market, the combination of companies would have more than 80 million unique users.
Trulia’s shares shoot up more than 32 percent nearly $ 13.26 and Zillow’s shares crossed 15 percent nearly $ 19.29 close to market. Both firms have the benefit in stock prices this year.
Charles Stubbs, Chief executive officer of Rent path stated that “this combination will have a huge impact, particularly on the home buying space and real estate agents in the single family resale business.” Whose real estate websites includes Rent.com, Lovely and Apartment Guide.
It would also build a high rivalry to San Jose based Move Inc., which maintains realtor.com for the National Association of Realtors. This Realtor.com stood in third in unique monthly visitors in March, according to Comscore.
If the merging agreement happens, Zillow will swallow a challenger ship and leaves consumers with one place for browsing real estate details, and there will be only place to real estate agents to list their homes for sale.
Myron Von Raesfeld – president of the Santa Cara Country Association of Realtors said that this will not be the good thing for the customers and eliminating the option for consumer won’t give benefits.
The Competitors will lead to improve their website through advertisements. “If the deal workouts, they can cut their spending on advertisements and no longer be in this ad race for traffic”, Daniel Kurnos, an analyst with the benchmark company stated.
Zillow is continued to generate traffic through visitors on home valuation site and recently launched a home modeling webpage. On other hand Trulia has made a big push on its mobile app. Both the firms making their revenue from real estate agents by charging for property listing in their sites. Both firms list homes and Apartments for rents.
This merging agreement deal will be the disruptive event in real estate market by hasty changes. Trulia get hold on market by giving a tool for potential clients and Zillow acquired a Newyork real estate site “street Easy” for $ 50 million in last year.
The acquisition of many real estate names was announced this year like Zip Realty by Realogy, a franchise. Zip Realty is an Emeryville based company which emphasizes listings, buying and selling. Because of above reasons real estate industries are struggling a lot.
Zip Realty’s CEO Lanny Baker told to Bay Area News Group that “ They know how to put a sign outside and how to bring in the consumer, but how do they do that through online? The big defy for them is to figure out the digital world”.
Another anarchist, Red fin in Seattle in real estate work with brokers to collect commissions on house sale. The agents are paid according to the customer’s satisfaction.
Even though, the big traffic is created by Zillow, An extensive amount comes from people using Zestimate tool, only 15 percent of real estate agents can afford to advertise - said Bradley Safalow of PAA Research. Most of the traffic will comes from homes which are not for sale.
People were asking “What’s my home worth?”
Safalow stated that “If the acquisition takes place a lot of brokers will say that I am not going to send my listings to anyone. They might use realtor.com for listing.”
He told to stop the Merger agreement, “It might be the biggest risk”.