I'm not a fan of Zillow. I've said it before, and I'll say it again. Zillow Zestimate accuracy is horid in most areas, yet sellers love to believe that thier home is actually worth what Zillow says it is.
In a featured post, Greg Nino out of Houston wrote a few days ago that he HATES Zillow and I for the most part agree with him. I've written several times on my Dallas real estate blog how much I dispise the Zillow Zestimate in Dallas and how Zillow Dallas accuracy is way off.
The fact is, however, that the Zillow Zestimate is becoming a popular source for home sellers, so it is important that we know how to approach the Zillow Zestimate accuracy argument when it comes up.
I was running into it so frequently that I started adding this script into my listing presentations so that I bring it up BEFORE they ever mention Zillow. It was extremely helpful and makes them a lot less defensive because they haven't actually MENTIONED the Zestimate yet so they don't have anything to get defensive about (although you can certainly see them start to squirm when you bring it up). So I wanted to share with you my script for my sellers when they bring the Zestimate to me:
Go to the Zestimate page located HERE and allow the seller to look at the numbers. If you want to break it up by county or if you don't live in a major metropolitan area listed, you can download the Excel spreadsheet here.
"Look, Zillow tries to be honest about how well they do on their Zestimate accuracy. They rate their accuracy on a 1-4 scale, 1 being the worst, and 4 being the best. You can see that their accuracy in Dallas is rated as a 2. According to Zillow's own statistics, only 22.5% of homes will actually sell within 5% of the Zestimate price. Only 44.5%, still less than half of the homes, will sell within 10% of the Zestimate. What is even scarier is that nearly 30% of homes will sell for 20% or MORE off of the Zestimate value. That means if you trust the Zestimate, 3 out of 10 homes will be priced more than 20% away.
Now, Mr/Mrs Seller, the Zestimate on your home says $300,000, correct? By Zillow's own statistics, you have a 3 in 10 chance of that being off by more than $60,000, and only a 2 in 10 chance that the Zestimate will be accurate within 5%, or within 15,000. By Zillow's own statistics, you can see that you have less than a 50/50 chance that your home will sell within $30,000 of that Zestimate home price.
Now, Mr/Mrs Seller, I know that $30,000 is a lot of money and so is $60,000. Heck, even $15,000 is a lot. It is money that you would love to have in your pocket. It is money that I would love to put in your pocket, but unfortunately our market just won't support that type of valuation. Zillow knows this, and that is why they publish these statistics on the Zestimate accuracy.
Now we will click here on this link that says "What Is A Zestimate." Zillow clearly states here that:
"It is a starting point in determining a home's value. The Zestimate is calculated from public and user submitted data; your real estate agent or appraiser physically inspects the home and takes special features, location, and market conditions into account."
If you would prefer to go 2 out of 3, you definitely can hire a licensed appraiser to come out and give you an appraised value on your home. These appraisals generally cost about $350 or so, but it would be well worth it to make sure that you are not leaving money on the table and at the same time ensure that you are not wasting your time having your home on the market while it is significantly overpriced."
The key to this script is to not become confrontational. Stay cool, calm, and collected and use Zillow's website against them. Go to the Zillow Zestimate Accuracy page live on your laptop or iPad during the listing presentation and go through the different statistics with them. Zillow has all of the statistics that you need, right there on the site to disprove the Zestimate theory. Use it to your advantage. If the sellers are still insistant on that number, it may be time to cut them loose because their home won't be selling any time soon. And perhaps in 6 months when their listing expires from the agent who agreed to list it at the Zestimate price, they will come running back to you saying you were right.
If you are not a real estate agent and somehow stumbled upon this post about the Zillow Zestimate Accuracy, I hope you have realized that the Zestimate is not accurate in most cases. If you are in the Dallas area and would like to get an ACCURATE picture of what your home is worth, please don't hestitate to contact me.
***ALL LINKS TO ZILLOW ARE TAGGED WITH A NOFOLLOW CODE. FIND OUT WHY THIS IS IMPORTANT TO YOU AS AN AGENT***
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