Yahoo and Zillow team up - challenge for HomeGain and HouseValues - and for Realtors

Yahoo announced today that they're switching from HomeGain to Zillow as provider of data for the "how-much-is-my-home-worth?" feature. This is a big coup for Zillow, who have been executing flawlessly, I must say. Since, as I mentioned in my last post about calculating a property's value, all these guys have the same (limited) set of input data, this shift by Yahoo is driven by user-interface/technology benefits, not by a desire for better information.

It also underscores the fact that the first-generation Realtor lead generation business of HomeGain.com and HouseValues.com is facing a massive Web 2.0 shift. Like real estate agents themselves, there is a lot of room for these companies to add value to the home buying process. But they're facing an Innovator's Dilemma.

Realtors are not going away, their value is shifting from owning the listing to building their clients' confidence about their buying & selling decisions. The best real estate agents have always been local market experts. But now we live in a world where 80% of real estate buying and selling starts on the Web. So your client's head is filled with visions of the real estate bubble and a price number from Zillow and school data from Redfin and today's open homes from Trulia. So Realtors have to stay a step ahead, provide clear, actionable information, and strong, insightful guidance. They have to interact with their clients like never before. Ultimately the real estate agent who makes their clients confident and successful in their transactions will win this game. For agents, it's no longer about answering "what's for sale?" or even "what price?", it is about the Why, When, and How of the transaction. It's about demonstrating expertise.

As soon as HomeGain and HouseValues realize their Realtor clients success is now based on these high-value services, the more likely they'll be able to save themselves from the Web 2.0 threat.

What services should these guys be providing? What about blogging? If you need any incentive to see the power of the blog for Realtors, look no further than RainCityGuide.com. Great Seattle market information written by folks who are clearly the experts. If I'm buying in Seattle, that's a great place to start finding a agent.

What else should HouseValues and HomeGain be doing for their Agents? What's a great way to communicate the timeliness and appropriateness of a give real estate purchase? How about detailed real-time local market information? Natch.

Other coverage on the Zillow/Yahoo deal at Inman.