FAQ: Why can't I offer the price I see on Zillow?
Zillow is a site that can be a lot of fun, but the price "Zestimates" are simply estimates, based on public records NOT on first-hand knowledge. Their algorithms can't factor in neighborhood conditions, amount of interior upgrading/remodeling (or not!) and a host of other factors, especially how competitive and fast-moving the real estate market might be in a specific area. If you want to buy a home, you need the advice of a real estate agent knowledgeable in the area or you're likely to be left in the cold. Take a look at some of these examples, and then you decide:
Sales Price: $1,000,000
Sales Price: $1,207,000
Sales Price: $ 825,000
Sales Price: $1,177,400
Sales Price: $1,162,800
Christiansen Group Realty (260)704-0843 - Fort Wayne, IN
Christiansen Group Realty
Zillow is a joke. Everytime I have a buyer tell me they were looking at that site, I tell them to RUN the other way.
May 30, 2012 10:11 PM
Bucci Realty, Inc. - Melbourne, FL
Eighteen Years Experience in Brevard County
Interesting examples. I see the sales prices was always higher. I am certain the reverse can be found as well.
May 30, 2012 10:19 PM
Woodbridge, VA
Your Commercial Real Estate Link to Northern VA
Lottie, a perfect example where the Zillow Zestimates are no more than guestimates of value. Market value can only be determined by good comps.
May 30, 2012 10:37 PM
Lakeshore Realty 208-714-4109 - Hayden, ID
North Idaho Realtor, Serving Coeur dnullAlene and Hayden Lake
Lottie, Thanks for the data showing how far off Zillow is. We have only ourselves to blame for this problem. If the MLS (which we own) was not giving away all our listing data for free, Zillow would not exist in it's current form. Then prospective buyers would have to go to broker or agent websites in the area they are interested in moving to.
May 30, 2012 11:37 PM
Retired - Kirkland, WA
Phil Leng - Retired
Hi Lottie,
That is brilliant!
It is clear that your market has taken off and the algorythms have not caught up.
Phil
May 31, 2012 12:26 AM
Long & Foster Real Estate, Inc. - Crofton, MD
Maryland Real Estate & Military Relocation
EXCELLENT way to refute Zestimates... I love it! This may be a step that gets added to my arsenal for situations when buyers are hung up on the Zestimate of a property. By the way, sometimes the Zestimate is higher, MUCH higher, than the sale price, so it's important to show those, as well. They still help make the point that Zestimates are not necessarily an accurate reflection of market value.
May 31, 2012 01:15 AM
Compass - San Francisco, CA
Helping make your real estate dreams a reality
Jane - sometimes a picture really is worth a thousand words
Jim - in your area too, huh?
Jennifer - I don't know Street Easy. Maybe you could enlighten me?
Lenn - I bet that was an interesting study
Andrew - some brokerages have pulled away from sending their listings out to 3rd parties
May 31, 2012 01:50 AM
Compass - San Francisco, CA
Helping make your real estate dreams a reality
Morgan - here too
Eric - and it's our job to help buyers and sellers realize that
Joy - you're welcome :)
Barbara - hopefully a picture really is worth a thousand words!
Praful - I hope it helps
May 31, 2012 01:54 AM
Compass - San Francisco, CA
Helping make your real estate dreams a reality
Judi - I've gotten in the habit of taking a screen shot when I take a listing.
Joan - maybe these examples will help you make that point to your clients.
Jon - it must be working, because lots of people check Zillow
Jeff - your bottom line is spot on!
Francine - I think we need to let people know that Zillow is a fun site, but not to take the Zestimates seriously
May 31, 2012 01:59 AM
The Gatti Group at Keller Williams Realty - Louisville, KY
Lottie,
Great post. I have been seriously thinking of pulling my listings from any syndication sites like zillow. I see no value that they provide us. The info is stale, inaccurate, and they use it to get agents to advertise on their site.
May 31, 2012 02:04 AM
Compass - San Francisco, CA
Helping make your real estate dreams a reality
Doug - an appraiser has a difficult job, to be sure. But a 'live' appraiser can at least factor in things an algorithm can't address.
Hello George - you've just described the problem beautifully!
Meryl - I don't know how they could be anything else.
Christiansens - I'm hoping this post will show my clients why they can't use Zestimates
Gary, I'm sure you're right. These are just my examples in our fast-moving real estate environment on the San Francisco peninsula. When I have first-hand examples of over-estimating, I'll post them, too.
Michael - too many intangibles go into a selling price for this type of valuation to be credible.
May 31, 2012 02:08 AM
Compass - San Francisco, CA
Helping make your real estate dreams a reality
Wayne - that's beginning to happen. A large firm in the San Diego area recently did just that
Phil - our area is, indeed, a strong market. These examples were from both 2011 and 2012.
Margaret - thanks for you kind words. I'm sure Zestimates can be higher than the sales price - real estate IS local, after all.
Larry - you're not the only one thinking along those lines.
May 31, 2012 02:14 AM
Aspire Home Real Estate 209-404-0816 - Modesto, CA
Realtor - Stanislaus ,Merced, San Joaquin Counties
Lottie - I havn't checked out Zillow in a while but usually around here they have been way over. Maybe things have changed since I last looked.
May 31, 2012 07:08 AM
Compass - San Francisco, CA
Helping make your real estate dreams a reality
Jim, I'd be interested in learning how the Zestimates are doing in your area. Real estate certainly is local!
May 31, 2012 07:21 AM
Remax Estate Properties - - Palos Verdes Estates, CA
Palos Verdes Real Estate Blog
The problem is that Zillow.com completely ignores the fact that you simply can not estimate a propertys market value given the limited public information available, such as the age of the home, location, number of bedrooms or bathrooms, or square footage. Many factors such as whether it has been remodeled, the desirability of the floor plan, proximity to schools, street appeal, etc. have a huge impact on market value. Only an experienced real estate agent or appraiser, taking all factors into consideration, can provide a property owner with an accurate estimate of a propertys value. I have seen many instances where Zillow.coms valuations are 50% or more inaccurate, with many of their valuations appearing to be almost random. Zillow.com has not ever set foot in any of the property's they are providing an estimate of value, so how can they possibly represent that they have any idea what the property is worth?
For instance, Zillow.com values the home across the street from me at a price approx. 40% higher than my home, although it has approx. 22% less square footage, one less bedroom, a less desirable floor plan, a smaller yard, and no ocean view, which my home has, and although recently remodeled, my home has also been remodeled with a much larger new kitchen. Zillow.com also has another home across the street from mine at a valuation at least 40% lower than its true market value, because zillow.com completely ignores the fact that it was recently completely remodeled inside and enlarged.
The business model of zillow.com simply can not provide accurate market value information, as the public information which it uses tends to lag the market, and most importantly, they are completely ignorant as to the unique qualities and details of each home that it appraises. Has it been remodeled? Does the floorplan work well? Are the bedrooms too small? Are the bathrooms and kitchen well designed? How large is the backyard and is it nicely landscaped? Does the house enjoy good curb appeal and attractive and well maintained landscaping? How well maintained is the home, and does it have any issues such as mold, old roof, or other deferred maintenance? All of these factors are important to evaluate in determining a propertys market value, and zillow.com simply can not do so. Only an experience real estate agent or appraiser, taking into consideration all of a propertys unique characteristics can help a client estimate a propertys true market value.
I have actually been contacted by people who have used the listing information on my website and compared it to the valuations used by zillow.com to try and estimate whether a property is over or undervalued compared to its listing price. This is like playing russian roulette with a fully loaded pistol.
When I am working with a buyer or seller, I provide my clients with a Comparative Market Analysis that includes only those homes which through my years of experience I believe are directly comparable to the subject property I am evaluating, taking into consideration all of the factors affecting a property's market value. Many of the property's included in the Comparative Market Analysis I have personally visited while they were on the market, and I am able to truly evaluate all of the unique characteristics of each of the properties in order to come to a reasoned estimate of value of the subject property.
Anyone using zillow.com as fact, may as well be using a Ouija board. Another good web blog that discusses this issue about how Zillow.com is a fraud is http://www.bloodhoundrealty.com/BloodhoundBlog/?p=134
May 31, 2012 09:16 AM
United Real Estate - Phoenix, AZ
Your REALTOR® For The Valley Of The Sun
Don't get me started on Zillow! The Zestimates are almost as accurate as a monkey and a dart board!
Jun 03, 2012 03:47 PM
Compass - San Francisco, CA
Helping make your real estate dreams a reality
Maureen, thanks for the link to the BloodhoundBlog - his pictures told a great story. I think this is the way we need to get the message across to people -- pictures.
Jun 03, 2012 09:15 PM
Compass - San Francisco, CA
Helping make your real estate dreams a reality
Nancy, all over the country Realtors® agree that Zestimates are of no use to people. Now it's up to us to get that message out to buyers and sellers.
Jun 03, 2012 09:16 PM
BMC Real Estate - 209-910-3706 - Stockton, CA
The Mother & Daughter Realty Team
Exactly! The best comment on this post is the monkey and dart board reference! Thanks Nancy! Made my morning.
Jun 03, 2012 10:50 PM
Compass - San Francisco, CA
Helping make your real estate dreams a reality
Rainmaker
1,951,949
1,951,949
Lottie Kendall
Helping make your real estate dreams a reality
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