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Real Estate Corporate

Move, NAR sue Zillow and Errol Samuelson

Move, Inc. and the National Association of Realtors have sued Errol Samuelson not for his leaving without notice, but questionable circumstances like wiped hard drives.

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According to court documents filed in the State of Washington, a lawsuit has been filed by the National Association of Realtors (NAR) and Move, Inc. (operator of realtor.com, Top Producer, SocialBios, ListHub, and several other companies) against Zillow, Inc. and Errol Samuelson.

The suit alleges breach of contract, breach of fiduciary duty, and misappropriation of trade secrets. In a statement, Steve Berkowitz, CEO of Move said, “we take our trade secrets and intellectual property extremely seriously as a valuable asset in our competitive position in the marketplace. We take action in cases in which we believe our trade secrets have been compromised. We have raised this matter for the courts and believe that the matter will be resolved judiciously.”

When Errol Samuelson, former president of realtor.com and Chief Strategy Officer at Move, Inc. left to become Zillow’s Chief Industry Development Officer, reactions ranged from criticism of Move, calling it a poaching of talent, to a criticism of Samuelson, calling it a betrayal to the industry as NAR members own and have an operating agreement with Move (which competes with Zillow).

Lawsuit alleges that Samuelson destroyed evidence

Court documents state that “Each quarter that he was employed by, and an officer of, Move, Mr. Samuelson certified in writing that he had read, understood, and would abide by Move’s Code of Conduct and Business Ethics,” which includes a “Conflict of Interest” clause and forbids employees from releasing proprietary and confidential information during and after his employment.

Further, the suit states that Samuelson arranged to defect to Zillow, destroyed evidence by erasing all memory from the iPhone, iPad, and laptop issued to him for business purposes by Move, and then resigning from Move without notice.

Last week, we also questioned the timing, wondering if it was designed to hurt Move, Inc. company stocks, or benefit Zillow in some capacity, which Move and NAR clearly agree with via their lawsuit.

The truth is that during his tenure at Move, Samuelson was promoted to a position that was so encompassing, that his job entailed knowing the inner workings of Move companies as well as the National Association of Realtors. The role will not be filled as it once was, rather remain broken into parts and functions will be filled by various people.

Samuelson isn’t the only one

Don’t consider this the last lawsuit to be filed, as Zillow announced today that Samuelson’s replacement, Curt Beardsley jumped ship today as well to become Zillow’s Vice President of Industry Development.

Also, this probably shouldn’t be considered the last high ranking official that will leave for Zillow in this apparent coup – their pockets are deep and they’re clearly willing to use their assets. Next quarter’s SEC filings will shed more light on just that.

This story was originally published on AGBeat on March 17, 2014.

Lani is the Chief Operating Officer at The Real Daily and sister news outlet, The American Genius, and has been named in the Inman 100 Most Influential Real Estate Leaders several times, co-authored a book, co-founded BASHH and Austin Digital Jobs, and is a seasoned business writer and editorialist with a penchant for the irreverent.

Real Estate Corporate

Zillow patent grab advances, now seeking patent on automated rental rates

(REAL ESTATE) Zillow has been applying for utility patents left and right, now adding rental Zestimates to the list.

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We recently reported that Zillow is scooping up patents faster than developers are bulldozing Central Austin single family homes to build two modern half-million dollar homes in their place.  And since then, Zillow’s showing no signs of slowing down.

The online real estate search giant applied for another utility patent for automatically determining market rental rate index for properties .

And what is that you ask?

This application patents Zillow’s ability to determine and index the market rental rate for homes in a geographic area. By accessing the current market rental rate of every home in each area, they can automatically compare them to similar homes to obtain aggregate results.

This functionality isn’t new. Other sites use similar functions to help renters find homes in the areas of their choosing at prices they are willing to pay. However, as we stated, utility patent applications are time intensive and the cost alone raises eyebrows.

Why?

Because if granted these patents, Zillow will be putting themselves at odds with their direct competition and other heavy hitters in the real estate search engine space. No biggie, it’s a free market, but brokers (who butter their bread) also feature automated rental rate tools, many not from Z.

As we mentioned before, this calls into question the unsavory practice of patent trolling. Patent trolls weaponize patents by scooping up patents from other companies instead of coming up with new ideas or technologies. In this case, it means grabbing patents for common technology, such as functionality that allows a user to compile a list of homes with desirable attributes in their prices range.

This kind of technology is already commonly used by several companies and some tell us they believe it shouldn’t need a patent in the first place. However, if Zillow’s applications for the patents go through, they can use them to threaten competing companies with legal action for infringement or failure to pay licensing fees for use of said tech.

Alternatively, this could be a brilliant move by Zillow to protect their intellectual property, their very own special way of automating this data, and that too is a smart business move.

We don’t know how this shakes out, but we’ll definitely be keeping a close eye out for updates.

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Real Estate Corporate

Zillow patent apps claim they invented AVMs, uploading home data via mobile

(CORPORATE) Zillow has applied for a handful of utility patents, and their invention claims will shock the real estate industry.

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It appears that online real estate search giant, Zillow, is applying for some pretty interesting utility patents. They currently have in four applications with the U.S. Patent Office, including automatically determining the current value for a home, the capture and use of a building interior data from mobile devices, and connecting and using building interior data acquired from mobile devices.

So, patents on AVMs and uploading data about a house via smartphone.

A claim that they invented both and should hold the patents.

First things first, what’s a utility patent?

Regarding inventions, U.S. Code defines a utility patent as “any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof.” Patents are instructions from inventors telling the public how to use their invention. 

There are two kinds of patents – utility and design. Design patents are less detailed requiring only drawings of one’s design and a very limited text explanation. Utility patents require drawings, diagrams and very detailed explanations of how the invention works.

Zillow has recently applied for four patents.

Two for separate patents for automatically determining a current value for a home. See here and here. Both of these include inventions that would have the ability to locate a home in a particular area as described by a user and thus offer the user the selling price and recently sold price through the evaluation of a home’s particular attributes.

The third is for the capture and use of a building’s interior data from mobile devices. This could mean using a phone’s camera to analyze the interior of a home to generate a representation of the home’s interior, for example.

The last patent is for connecting and using building interior data acquired from mobile devices which could mean automating the operations used to acquire images of a home’s interior such as using a phone to capture video for multiple views to put together a virtual representation of a home.

So, why is this important?

Utility patent applications are time intensive and super costly starting at around a few thousand dollars for simple inventions and leaping into the tens of thousands range for more complex ideas and technologies.

Considering the cost alone, one could assume that Zillow has something pretty big in store for the future or at the very least, some pretty lofty goals.

If granted, these patents would instantly put Zillow at odds with the majority of real estate tech companies and brokerages.

Could this have anything to do with rumors of their potentially being acquired in 2019?

Or could it having something to do with the expansion of Zillow Offers, the company’s direct home-buying and selling service?

Maybe Zillow’s just attempting to quash their competition?

Or maybe they’re looking to boost revenues with some good old fashioned patent trolling

Time will tell what Zillow’s patent rampage means, or if the Trademark Office will even grant these patents.

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Real Estate Corporate

New Zillow strategy – telling you to take your money and shove it

(REAL ESTATE) Zillow is adding a new feature that is raising eyebrows, but could go a long way toward consumers’ trust in their new direction.

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In college I would spend hours investigating what courses I would be taking the next semester. My university provided a flow chart of the kinds of classes I needed to enroll in, but it was completely up to me which one I chose. I used two main sites that helped my make my decision. One was a site that showed me every single variation of my potential schedule and the other was a crowd sourced rating site for the professor. Since then, several rating sites have come out all in different industries, and as you already know, real estate is no exception.

As a consumer, I have a very strange relationship with Zillow. I’ve never bought a house, but I’ve used Zillow to find multiple rental homes, to dream about homes I’ll never afford because I like avocado toast and to look at the before photos of a home my friends bought.

I also have a strange consumer opposition to them after their little Zestimates drama last year, their recent foray into alleged photo poaching, and their not so blatant attempt to run the table by buying a mortgage company.

That said, Zillow’s new strategy has my interest piqued.

With the purchase of Mortgage Lenders of America, Zillow has secured their place at the adults table of the real estate world. They’re now the search engine that will help you find a house, the company that will connect you to a Realtor and the lender that can help you buy it. Zillow is taking their one-stop shopping a step further and allowing you to rate your real estate agent (beyond their existing rating system) — just like I did with my professors.

Customers will be asked for input on agents’ communication style, responsiveness, trustworthiness, and expertise (sound like HomeLight? Yeah, I know).

In an effort to be customer satisfaction driven, Zillow’s Premier Agent customers will be privy to reports based on data that Zillow will collect from other customers that will gauge agents’ performance.

Zillow believes their customers are all about customer service and I can’t say they’re wrong. I don’t know of any industry where customers don’t want quality assistance. The irony is not lost on me, though, that they’re an online company trying to measure human interaction.

Zillow’s President, Greg Schwartz, explained, “we promise you this: we’re going to give you the greatest platform to make it happen. And we’ll keep pushing to get it right so you can deliver exceptional experiences.”

Solid promise, but how is it going to work? Will it be like the website I used to rate my professors where it was an option to do so or I could just lurk in the shadows and reap the benefits of the reviews? Or is it going to be like Uber / Favor / fill-in-the-blank-phone-app-service where I am required to submit a review before I’m allowed to do literally anything else? They’ve long had agent ratings, but insiders suggest that an Uber-esque rating is really what’s in play here.

Schwartz went on to talk about agents who aren’t performing up to customer standards — again, are there hard and fast guidelines? Because I can guarantee you that as a customer, I will have different standards than Mariah Carrey.

Schwartz said, “For agents who aren’t performing up to customers standards — Zillow will no longer be interested in taking their money. The company wants to be able to tell every consumer who comes to the site that the agent they select will deliver a high-quality experience.”

Whoaaaaaa. Schwartz is really swingin’ for the fences there. If you aren’t up to Zillow’s standards, they’ll tell you to take your money and shove it. Despite a shaky opinion of the mega-company, this speaks to me.

I’m not entirely sure alienating large groups of a people you’re trying to work with is the best strategy, but Zillow seems to have the appearance of trying to do good things. We’ll see what shareholders think, how brokers will respond to a potential Uber-esque rating for their agents, and ultimately, how consumers opt to trust the data in a sea of subjective agent ratings alongside endless lawsuits against that shake confidence in the brand.

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