A foreclosed home in Miami. Zillow, a real estate service, is providing… (Joe Raedle, Getty Images )
Real estate website Zillow.com has built a successful business out of telling online visitors how much your house is worth. Now it's telling the world whether you're in foreclosure.
The company on Thursday launched a free feature that allows anybody searching for homes to view those that aren't listed for sale but are headed that way because of financial distress.
For The Record
Los Angeles Times Sunday, October 28, 2012 Home Edition Main News Part A Page 4 News Desk 1 inches; 49 words Type of Material: Correction
Zillow.com foreclosures: An article in the Oct. 26 Business section about real estate website Zillow.com launching a feature that shows whether a property is in foreclosure said that the site initially would provide details on 1.8 million homes in the foreclosure process. The correct number is 1.2 million homes.
Nosy neighbors will be able to see if a homeowner has defaulted on the mortgage and by how much, whether a house has been taken back by the lender, and what a house might sell for in foreclosure, among other things.
While information on borrowers in foreclosure has long been public, it has been accessible only to those willing to dig through public records or pay specialized providers who aggregate that data for a fee. Zillow executives described the new feature as a service for people shopping for homes and a way to provide increased transparency to real estate.
But the move by the real estate website immediately raised concerns among housing advocates and some privacy experts. They argued that making such data easily available could have implications such as embarrassing people already going through hard times.
"What we are confronted with here is a scenario that is becoming increasingly common in today's world, which is things that were hard to get, but public, are becoming easy to get to, and it changes the dynamics of society," said Joseph Turow, a University of Pennsylvania professor who is an expert on privacy concerns. "The larger issue that you are pointing to is the democratization of data that is taking place, possibly, without any kind of social discussion around it."
Zillow titled the new data on homes in foreclosure "pre-market inventory" and said that home shoppers who use the company's site have been asking for the service.
The company said it would now provide details on 1.8 million homes in the foreclosure process. The information will include more than 1.5 million homes whose borrowers have entered foreclosure but still own their homes as well as about 260,000 bank-owned properties not yet listed for sale. Contact details for real estate agents specializing in foreclosures will be listed, and a foreclosure center on the company's site also has been launched.
The names of borrowers facing foreclosure will not be listed. Those troubled borrowers won't be allowed to opt out of having their homes publicly listed, a spokeswoman for Zillow said, though they will be allowed to appeal any information they believe is incorrect.
The benefits of having a more transparent housing marketplace outweigh privacy concerns, Zillow Chief Marketing Officer Amy Bohutinsky said. In addition, many troubled homeowners might welcome the opportunity to attract a broader pool of people interested in buying the home they can no longer afford, she said.
"This helps buyers become smarter about their local market, and it also gives them access to potential inventory that they wouldn't have been able to find," Bohutinsky said. "We think the benefits to buyers and the benefits to homeowners who may want their homes exposed to a much broader group of people other than a lot of savvy investors -- we think that is a really big benefit, and that benefit outweighs anything else."
Bohutinsky noted that when Zillow launched its site six years ago, the concept of being able to look up a home's transaction history -- what your neighbor paid -- was foreign to many and was controversial. Now that information is readily available through Zillow and competitor sites such as Redfin, Trulia and Realtor.com.
Foreclosure data on homes are already available for a fee from sites such as ForeclosureRadar and Realtytrac.
The move by the site comes as competition for lower-priced homes, particularly in California, has grown so fierce that the number of available properties has dropped dramatically over the last year. In some parts of the Inland Empire and other regions in Southern California, the supply of homes on the market is down to about a month's worth, real estate agents have said.
That scarcity has increased demand for information about the housing market from consumers.
Karen North, director of the Annenberg Program on Online Communities at the USC Annenberg School for Communication and Journalism, said there should be no surprise that information once available for a fee is now free. Home shoppers have grown increasingly sophisticated in recent years and are out looking for bargains.
"Regular people have become aware of the fact that there are such things as short sales," she said. "People have discovered that there are ways to buy houses that are under-market."
The newly available foreclosure information is part of an explosion of increasingly visible data that once was limited in availability.