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Zillowing the Zillow! (A Realtor's Foray into the World of On-Line Guestimates)

By
Real Estate Broker/Owner with Lola Audu~Audu Real Estate~Grand Rapids, MI Real Estate

  Zillowing the Zillow!

  Yep, I actually decided to do this.  You may ask, exactly what I was doing.  Well, zillowing is a verb I've invented to describe the action of going on-line to check your home value through a site called zillow.com which will give you what is known as a zestimate of your homes value.  Since, as far as I can tell from my research and dictionary searches, both zillow and zestimate are not established nouns in the English language, this calls for an invention of a verb to ascribe meaning to the actions performed in tandem with these newly minted terms.

Being a real estate broker, I make it my business to be astute about the correct valuation of property.  This activity can be described as capricious as it involves the skills and investigatory acumen of a statistician, the nuanced inclinations of a researcher and the exquisite artistry and discriminatory palate for distinction and public sentiment of a gossip columnist to determine what any given home listed in a community should be listed for at any particular period of time.  Oh, I forgot to mention, the skills of a politician to deliver this information when it is not presumed to be very palatable to a seller's sensibilities with dexterity and hopefully persuasion strong enough to create a saleable listing!

So, my zillowing began on-line in the most obvious place, I zillowed my own home.  After all, this was one place that I could presume a high level of expertise having supervised the construction details a few years ago.  I was surprised to find that with 67 Million homes being searched by the Zillow, they could not locate my home.  I was perplexed; even Map quest now knew that I existed and certainly every catalog company, utility company and junk mail company known to man seemed to have no problems whatsoever locating me.

Undaunted, I zillowed a neighbors home to check to see whether my entire community had somehow been the victim on an on-line alien abduction and Voila, I found out that my home was indeed on zillow.com, albeit with a wrong address.  Apparently, although our address had been changed by the county several years ago, the zillow computers had not registered this fact.  This gave me some concern as proper identification of the parcel or property you are marketing or selling is Real Estate 101...thou must not sell thy neighbors property inadvertently by virtue of improper identification.

alien abduction

Relieved to have located my home, I checked the zestimate.  it was duly noted that as I, the homeowner, had not updated my data zillow.com was doing the best it could with the information it had access to.  Obviously, they had not yet contacted me and I was pleased to see an invitation to update my information to improve the accuracy of the database. The two most recent sales had occurred within the past 3 years and the home that had sold just prior to my home being built was now just a little under a decade old. 

I was surprised to see how arbitrary and sometimes downright inaccurate the analysis of my neighborhood was.  The homes that were given as comparables were often much older bungalows, literally light years apart in terms of value, so much so that any appraiser worth his license would have been embarrassed to list them as "comparables".  My much newer home with more square footage was tens of thousands of dollars below the value of a home that was significantly older but which was the most recent and appropriate comparable.  I noted ruefully that it would have been nice if our county property tax assessor agreed with the zestimate when it came time to pay my property taxes, but alas...he was not fooled. 

The most extraordinary surprise occurred when I tried to correct what I knew to be obvious flaws in the zillows zestimate from an intimate knowledge of my home's interior and layout.  Zillow.com had invited my input as the homeowner and I was happy to perform this community service.  My attempts to enhance the accuracy of the zestimate ended up deducting a whopping $60,000 off my value.  Now, I knew that I was dealing with a remarkably deceptive system which was purporting to provide a level of information and knowledge that it could not consistently deliver and most disturbingly might not accurately evaluate even when it was given additional data. 

This gave me real pause for concern.  I thought of all my clients who had or were in the process of selling their homes and future homeowners who would be marketing their homes within the next year.  How could they sift through the overwhelming media hype and reach an appropriate conclusion given what I as a seasoned professional had just experienced first hand.  It should be noted, that Zillow.com does recommend that you consult a Realtor and now I knew why.  Serious financial damage could occur to a most valuable asset, your home equity, if you came to the wrong conclusion. 

Recently, I came upon this post on a Blog from an individual who deals with condominiums.  Apparently, if you own a condominium, Zillow.com can only evaluate your entire building and gives this as the value of your unit.  Hmm.... This also creates a challenge if your zestimate includes such a building as a comparable due to its proximity to your home location. 

Well, I decided to test my zillowing skills on a number of my listings, holding the zestimate with the respect I would give to a proverbial "grain of salt".  Sometimes, Zillow's zestimate indicated that I was on target with regards to pricing and sometimes it decided I was not.  The comparables used to make this determination were sometimes not even in the same community or neighborhood, which made it amazing that they sometimes got the average prices right! 

What concerned me the most was the prices I saw for homes sold by Homeowners on-line through Zillow for 50% or less than their neighborhood.  And, there were a significant number of these in their database.  I wondered if these former owners truly understood the extent to which they had lost money.  This is even more disturbing given the foreclosure crisis in many parts of the country. I am sure that if I had gone to any of these owners and said, here's a bucket full of dollars equivalent to half the value of your home, would you like to join me in a money burning party or perhaps we could just throw the money out your windows, they would regard me with something several degrees below disgust.

Obviously, I do not know the details of the homeowners who choose to sell their homes so far below market value, perhaps they weren't even humans...maybe they were organizations such as banks who were ridding themselves of foreclosed properties.  However, I am reminded that my obligation as a professional Realtor to my home owner/seller is to sell their home for the highest possible price, at the least inconvenience to them in the least possible time is an increasingly valuable service.  For in zillowing, I learned that data can mislead, and there are some things a computer just can't do right if at all!

For further research on on-line services to assist in the determination a home's value, you may investigate the links below:

http://www.housevalues.com/

http://www.homegain.com/

http://www.realestate.com/

http://www.zillow.com/

Or you can contact me on-line at http://www.auduhomes.com/  or info@auduhomes.com to obtain professional counsel regarding a wise approach in considering how best to utilize information and technology to market your home intelligently. This may include an on-line marketing service as a part of your strategy.  We will work with you to determine what makes sense for your home in your community!  Lola Audu, CRS GRI an associate Broker with Audu Real Estate has earned the prestigious E-Pro Designation from the National Association of Realtors for competence and training in on-line transactions

Comments(7)

Renée Donohue~Home Photography
Savvy Home Pix - Allegan, MI
Western Michigan Real Estate Photographer

No comments yet?  WOW!

This is proof positive that computers cannot replace the human eyeballs or brains.  I do believe zillow is a lawsuit waiting to happen.  What happens to people who act as licensees when they are not?

Jan 04, 2007 02:16 PM
Beth Larsen
RE/MAX Sedona - Sedona, AZ
Sedona Arizona
Well written Lola. I too ran the "Zillow Zestimates" for my home and neighborhood...proving as you did what we already know....raw data without market knowledge is like.....uh, uncomposted manure. Not immediately useful as it is, and if you use it on your carefully tended garden, it could get "burned".
Jan 04, 2007 05:25 PM
Lola Audu
Lola Audu~Audu Real Estate~Grand Rapids, MI Real Estate - Grand Rapids, MI
Audu Real Estate~Grand Rapids, MI ~Welcome Home!

Beth, I'm intrigued that you had the same experience with your own Zillow estimate that I did and...being in a completly different area of the country.  I wonder how common this.

Lola Audu, CRS GRI

www.auduhomes.com

Jan 05, 2007 01:37 AM
Lola Audu
Lola Audu~Audu Real Estate~Grand Rapids, MI Real Estate - Grand Rapids, MI
Audu Real Estate~Grand Rapids, MI ~Welcome Home!

Renee,  in the state of Michigan you can do up to 5 transactions a year without a license.  Our Board has exploded in numbers over the past few years.  It will be interesting to see how organizations like Zillow.com and other Internet Brokers affect the market.  Interesting analogy about the compost....

Lola Audu, CRS GRI

Audu Real Estate

www.auduhomes.com

Jan 05, 2007 01:46 AM
Beth Larsen
RE/MAX Sedona - Sedona, AZ
Sedona Arizona

From comments I've read on Real Talk and ePRO Talk Lola, fairly common. In some areas, the data seems to be better than others, and I would assume it will become more accurate as time passes. HOWEVER, it is still raw data...Zillow doesn't go on tour, Zillow doesn't know about quality of finishes, Zillow doesn't know about all the upgrades an owner may have added (OK, sometimes without permits ;^), Zillow doesn't know one house has power lines in the back yard, another one has an unobstructed view....yada, yada, yada. Elsewhere I read someone (I think it was Jay Thompson) used the term"UnZillowable" to describe the intangibles that add to value. That kind of says it all.

What I did find about Zillow was if you knew what adjustments you needed to make, and know the market, you can come close (but only with adjustments). I also found that their "comparables" were terrible...somehow they managed to miss some that by all rights should have been there, and offered much less appropriate properties. Go figure.

Jan 07, 2007 09:48 AM
Anonymous
lola audu

Hi Beth,

good to have you back.  "zillowing" & "unzillowable", we are definitely creating a new lexicon.  Perhaps, most importantly, there is a growing awareness of the truth as we re-define the context of our industry.  I was training a new Realtor recently and she also had the same experience.(inaccurate data and comparables)  Reading some posts on-line at Active Rain was very helpful to her as she felt quite intimidated when she first came upon the site. 

I agree with you that the model should improve over time, but there are so many intangibles, (which simply cannot translate over cyberspace) that will continue to create huge potential mis-interpretations.

The great news is that it is creating a differentiation for the first time in a very clear way about the value that a Realtor brings to the transaction.  Sometimes the best things come in the most "unexpected" packages!

Lola

Jan 07, 2007 10:24 AM
#6
Beth Larsen
RE/MAX Sedona - Sedona, AZ
Sedona Arizona

Amen to that!

;^)Beth

Jan 07, 2007 11:25 AM