Zillow and Trulia both charge real estate agents for home listings and for preferred placement on their sites

By the time many home shoppers call a real estate agent, they’ve already got a short list of properties and data to support the prices they want to pay.

Real estate information websites such as Zillow and Trulia have in short order revolutionized one of the world’s oldest transactions.

The $3.5-billion deal announced Monday for Zillow to buy Trulia creates a digital advertising juggernaut that could control more than 70% of online real estate searches. And it could further open up information about the market to buy and sell houses, while vacuuming up advertising dollars in the process. It also could add tension to the already uneasy relationship between the sites and some agents and brokerages.

Until recent years, agents had a monopoly on such market intelligence.

Before sites like Zillow, buyers would come to our office and we’d tell them what was on the market, said Mike Kelly of First Team Real Estate in Anaheim Hills. Now they call us and say they want to go see houses they found themselves.

Seattle-based Zillow Inc. and San Francisco-based Trulia both offer searchable databases of real estate data complete with photo galleries and maps of recent neighborhood sales to home shoppers free of charge. That has enabled the companies to carve out a lucrative piece of the $12 billion annually spent on real estate advertising.

Both sites charge agents for home listings and for preferred placement on their sites, inviting customers to get in touch for more details on a property.

Some worry that the new, bigger Zillow could charge more for advertising or that big brokerages could respond by pulling listings off the third-party sites. Zillow could someday become a marketplace itself, much as Amazon and Travelocity have.

Traffic on real estate listing websites and their mobile apps has grown fast in recent years as the sites have matured and the housing market has recovered.

Zillow and Trulia have come to dominate the market, combining for 68.4 million unique users in June, according to ComScore. The next biggest competitor Move Inc. which is affiliated with the National Assn. of Realtors had less than half of Zillow’s traffic and lagged behind Trulia by one-fourth.

After the deal, which is set to close next year, the two big sites will maintain their own brands and Web presence, Zillow Chief Executive Spencer Rascoff said Monday.

Neither is yet profitable separately, but they hope to save $100 million a year by joining forces and cutting duplicative costs.

The primary goal is to grab a bigger slice of the advertising market, and that’s where things may get tricky, said Brian Boero, a partner at real estate marketing firm 1000Watt Consulting.

Before sites like Zillow, buyers would come to our office and we’d tell them what was on the market. Now they call us and say they want to go see houses they found themselves. — Mike Kelly of First Team Real Estate in Anaheim Hills

The irony is that these companies, which are militantly consumer-focused, get the large majority of their content and revenue from an industry that is still a little uneasy with them, he said.

Most agents have come to accept the sites as partners, Boero said, but a vocal minority views them as a threat.

Some agents have long grumbled that Zillow, particularly, with its Zestimate algorithm of home values, gives buyers and sellers a skewed view of what a house is worth. That means some listings fall through the cracks, they argue.

A few big regional brokerages around the country have pulled their listings off the third-party sites entirely over concerns about accuracy and a desire to draw traffic to their own sites. And the National Assn. of Realtors this year pumped $35 million into an ad campaign for Move Inc.’s Realtor.com, touting the importance of accurate, local market information.

@Beyond the Horizon A small beacon of light is the economy collapsing? I guess its easy for you to say living in your moms basement. What a nut!