The Dirt on the Neighbors

SmartMoney

Before leaving Atlanta for a new job in Rochester, N.Y., Kodak executive Steve Jean made plans to see a restored 19th-century mansion just outside of downtown. He knew the numbers — 4,600 square feet, five bedrooms, an alluring asking price — and he'd seen pictures of gorgeous period details like the stained-glass windows and curved wooden staircase. But Jean had dug up some deeper intelligence that was a little less flattering: The block featured kids cranking their stereos late into the night, homeless men picking through the trash and even the occasional "working girl." So maybe there was a reason it was listed for a mysteriously low $129,000.

Home buyers usually don't get details like this without some serious shoe-leather investigating. But Jean didn't even have to set foot in upstate New York to get the inside dope on this "Spectacular Queen Anne." He learned it all by logging on to Zillow.com, where would-be buyers now have a new tool for getting the dish on the neighborhood.

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Always a favorite American pastime, real estate gossip is now the new frontier in online home shopping. Forget those dry, data-heavy listings of yore. Savvy surfers are discovering juicy blogs as well as interactive sites that deliver the street-level scoop that's long been trapped in the heads of brokers and neighbors. Indeed, who needs them anymore? Just tune in to the online conversation, where users spill the beans on everything from which homes are shoddily built to whose dog makes a nightly racket. In Silicon Valley, they call this "user-generated content," but for would-be home buyers it's simply the real nitty-gritty — and it threatens to shake up the home-buying process. "It adds transparency," says Jonathan Butler, founder of the Brooklyn-based blog Brownstoner. On his site, armchair experts closely parse neighborhood listings for exaggerations and omissions, and the pros have taken notice. One broker admits that the critical consensus helped pressure him to drop the asking price on one home by $400,000.

To be sure, many of these sites have yet to attract enough traffic to be consistently reliable. Truly useful content can be quickly diluted by real estate agents fishing for clients, or by so-called trolls who post deliberately false or inflammatory comments. In the case of the Rochester home, for example, someone claiming to live nearby wrote in, anonymously, to say that the area is an open-air drug market with frequent gunfire. That came as a surprise to Sarah Long, who spent three years lovingly renovating the 12-room home with her fiancé. "We have not seen the problems that person described," she huffs, noting that a pastor lives across the street with his children. But while chatter can be hurtful to the homeowner, few shoppers complain about having too much information.

In an era when Time named "You" as the person of the year, it's not surprising that virtually every real estate site is pushing user-generated content. But unlike a video of a waterskiing squirrel, these features can make you smarter. The appeal is equal parts voyeurism and market research — a chance to play real estate sleuth without spending hours driving around strange neighborhoods. Almost 80 percent of home buyers already use the Internet extensively during their search. But a growing number now want to move beyond basic listings and school-district info, to tap into insider stuff on quality-of-life issues — tips like a recent Brownstoner post that points out that a seemingly charming old church near one listing becomes a headache every Sunday when triple-parking parishioners block the streets. And over the past few years, web entrepreneurs have rolled out a slew of sites to meet that demand, with offerings ranging from neighborhood news sites like Yelp and Outside.in to real estate e-businesses like Zillow and Trulia.

The common thread among all these sites is a reliance on the so-called wisdom of crowds, which holds that a bunch of nobodies can collectively make good decisions more reliably than one or two experts. And some of these online crowds have assembled almost by accident. When New York City freelance writer Lockhart Steele launched the blog Curbed in 2004, he let readers add their comments almost as an afterthought — and tapped into a bottomless pit of knowledge and opinion. Fast-forward three years, and Curbed is now a network of seven sites, with a staff of 20 and a legion of readers gossiping about everything from dubious developers to neighbors who walk by the windows au naturel. In the site's Los Angeles section, you'll find a vigorous debate over whether a two-bedroom home in Franklin Hills is a bargain or a rip-off at $1.3 million, as well as a warning about a noisy restaurant on the drawing board. A few clicks away, other chatterers swap news about light-rail lines and share data they've dug up from City Hall planning documents — in short, collaborating to play the role of the World's Best Real Estate Agent.

For Scott Matter, that kind of research paid off when he was zeroing in on buying a high-rise condo in Manhattan. Brokers and developers alike assured him that local zoning rules would protect the building's panoramic views. But Matter later learned, on Curbed, about other construction projects that could wipe out his million-dollar vista. Matter walked away from that deal, and he says that online sleuthing changed the whole dynamic of his house-hunting from then on. Similarly, Steve Jean, the executive relocating to Rochester, says he couldn't understand why houses fronting Lake Ontario weren't selling at a premium. Every real estate agent he saw said the prices simply reflected the city's low property values. But from web research, he got the real skinny: Winds off the lake made that area almost unbearably cold for much of the year. "At least I get an honest opinion from a real person" online, he says.

Not surprisingly, brokers object that commentary from unaccountable strangers can be not only false, but also a poor alternative to their own expertise. "Consumers can get more information, but some of it is garbage," says New York broker Alison Rogers, author of "Diary of a Real Estate Rookie." And in all fairness, in the gossip battle, brokers are often fighting with one hand tied behind their back. The Fair Housing Act bars them from talking about such topics as whether a neighborhood is gay-friendly, the location of the nearest synagogue or even whether a block has any cute single women — in the eyes of the law, their comments could reflect racial, religious or gender bias.

This uncensored competition comes at a time when the pros already feel beleaguered, and not just by the housing slump. Indeed, the industry, which collected roughly $65 billion in commissions in 2005, has taken a series of web-based lumps that threaten its boffo business, be it tools like Google StreetView that let people check out neighborhoods and lots remotely, or home-price estimates that undermine brokers' efforts to sell for top dollar. Now, with online chatter encroaching on their role as data gatekeepers, the pros are finally pushing back — by writing their own chatter. Broker blogs, for example, are sprouting like mushrooms online. The agent networking site ActiveRain hosts more than 4,000 blogs where members present themselves as consultants on local housing markets — commenting on market trends in a specific neighborhood, for example. Other agents, like Rogers, regularly post on other web sites in the hope that they'll appear as beacons of truth in a fog of speculation.

The National Association of Realtors isn't sitting idle, either. It is adding local agent blogs to its main site, Realtor.com — already a heavy hitter, with 6 million visitors a month — and beefing up the portal even further with videos and comments from ordinary folks. Of course, the atmosphere is very different from that on the independent blogs: Writers accentuate the positive, and snarky comments are rare.

But how well will people respond to an industry-backed site when the unvarnished truth is just a click away? Though the traffic numbers on some of the user-generated sites are still relatively small — Curbed, for example, typically gets fewer than 350,000 visitors a month — outfits like Zillow say they're poised to take the idea mainstream. Seattle-based Zillow's "Zestimate" home-valuation tool has already made the site a destination for two million visitors a month. And in May the site debuted Home Q&A, a feature that lets users ask and answer questions about any of the 70 million homes in the site's database. Zillow CEO Rich Barton, who helped create Expedia, has equally grand ambitions for this project, hoping to create a giant database of user comments on every home in America. His goal, he says, is "a much more efficient and liquid information market."

Steve Jean, for one, thinks that market is already proving valuable. When he finally checked out that Rochester mansion in person, he didn't see vagrants or hear booming woofers, but he picked up other hints of sketchiness. After four police cars passed by on patrol in less than an hour, Jean figured that the neighborhood's online critics were on the right track, and that it wasn't the spot to settle with his wife and daughter. "It's a beautiful house," he says, "but probably not right for us."

Love Thy Neighborhood

Web gossip can teach you a lot about a new home, but hard facts matter too. Here, some ways that potential buyers can answer their burning questions.
—Kirsten Vala

Hazardous to Your Health?

What to Do: Learn whether that cute split-level ranch sits next to an oil spill or within prowling range of the local cat burglar.

Where to Go: Environmental Data Resources checks for hazardous or toxic waste sites near any property. The catch? You usually have to buy the report through a home inspector. Prices range up to $150. In a more general way, Neighboroo.com maps out local air pollutants and water quality, as well as crime rates, and it's free.

Any Tax Surprises?

What to Do: Protect yourself from unexpected tax hikes.

Where to Go: If it's been a while since a home's last property-tax assessment, you could face skyrocketing taxes when the next revision comes. Ask the local assessor's office how recently the home has been evaluated. (Some assessors post this information online.)

What's It Going to Cost You?

What to Do: Find out how far your salary will stretch in a new town.

Where to Go: To learn how much money it'll take to sustain your lifestyle, use the cost-of-living calculator at Bankrate.com. (Moving from Omaha to Manhattan? You'll need a 130 percent salary hike to break even.) The site includes cost comparisons across all kinds of categories, from cereal and toothpaste to housing. Once you know how much you need, HomeFair.com publishes median salaries for various jobs in each city.

How Goes the Neighborhood?

What To Do: Find out whether your prospective 'hood has the right mix of pizzerias, dry cleaners and latte shops.

Where to Go: Yelp compiles user reviews on businesses and amenities in more than 100 cities — with categories ranging from Restaurants to Religious Organizations. Outside.in pulls together local news and commentary about neighborhoods in 54 cities.

Who's Suing Whom?

What to Do: Make sure the seller's legal problems won't create headaches for you.

Where to Go: The database site KnowX.com searches for liens, bankruptcy filings and lawsuit records; prices for detailed records start at $7.95. LienFax.com does similar searches but adds data about foreclosures, for $19.95 per search.

Renovation Frustration?

What to Do: Get the lowdown on any improvements to the house.

Where to Go: Your city or county building department should have permits on file that detail any major renovations to your property. Make sure that the current owner has filed the proper permits for any recent projects; otherwise, you may find yourself facing a nasty property-tax hike. Don't feel like hanging around City Hall? For residents of the 16 states it covers, PropertyShark.com will hunt down the relevant permits. The fee: $35.

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