Zillow and Trulia to merge in $3.5 billion stock deal

Many homeowners or prospective buyers have checked out Zillow and Trulia. The two Internet companies are the largest home-listing providers that aren't Realtor-owned Multiple Listing Services.

And now the two real estate giants are going to merge in a $3.5 billion stock deal.

Zillow and Trulia aren't MLSs, which have the most listings in the country. A Zillow executive told a crowd of real estate agents at a Inman Real Estate Connect event last month that his company is publicly traded and doesn't plan on trying to take over MLSs, but agents in the crowd were skeptical.

The mega deal doesn't necessarily mean consumers will get a lot more listings to view or better information including home value estimates. Those are known as Zestimates on Zillow and are considered unreliable in metro Phoenix and many other parts of the country.

Since Zillow launched during the boom, I have received many complaints about Zestimates. The data is often wrong or incomplete. Unfortunately, some homeowners they were still underwater when their values were much higher; others thought they had enough equity to sell or tap for emergency expense, but the Zestimate amount wasn't available in the real market.

In metro Phoenix, we have much better real estate information available to consumers than Zestimates.

"Zillow's forecasts are for entertainment purposes," said Mike Orr of Arizona State University's W.P. Carey School of Business. "Zillow is not predicting changes in home prices. They are predicting changes in their own Zestimates."

Tom Ruff, real estate analyst with the Arizona Regional Multiple Listing Service's Information Market, said Zillow has been "wildly inaccurate" in tracking and forecasting home prices.

That problem is not expected to change with the merger, expected to close next year.

The deal has been in the works for a while. Trulia CEO Peter Flint said at the Inman conference that it was a prime time for mergers among real estate information providers.

One big concern among real estate agents is whether a much bigger Zillow/Trulia could charge higher advertising rates.

There's been a lot of talk about the among real estate agents on social media. Some are concerned the big listings giants are trying to take the place of real estate agents. And there are angry complaints from some agents about the system that requires them to pay more money to get their information and photos in the most prominent spot next to listings.

Phoenix real estate Tiffany Herrman tweeted: "Not sure what the impact will b. "I am 100% confident people will continue 2want 2do business w/whom they can trust!,"

Tell me what you about the Zillow/Trulia merger. Reach me on Twitter @catherinereagor or e-mail catherine.reagor@arizonarepublic.com.