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Keller Williams adds Zestimates to their website

Yes, that's right. You're not imagining this. Keller Williams, the 4th largest brokerage in the US, added a home valuation module to their homepage where potential clients can see what their home is worth according to Zillow (and Cyberhomes).

Why would they do this you might ask? Two reasons:

1. Consumers want this information.

2. It's a great "conversation starter" to try to get consumers to contact a KW agent from the website.

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Posted by Spencer Rascoff on 01/20/2009 11:41 AM

Comments (47)

home values, widgets, zillow, keller williams

47 Comments on Keller Williams adds Zestimates to their website

JAN

Wow - that is pretty amazing - I still have found Zillow to be off the mark quite a bit (no offense) - so that is surprising to me...

Good for Zillow and Cyberhomes, if they convinced KW to add their valuation to KW websites and give them credence. Is there a disclaimer that a live KW agent may not agree with the values provided by this means?

That's great, but I have found that zillow easy to use and pretty intuitive. Sometimes the values are high. I have found zillow to be a useful starting point on occassion.

Hmmm...Wonder why KW hasn't informed us of this? I just tried it out with a home. The two values are $100,000 apart. That's a bit much.

Am I reading the numbers on the picture correctly? $791,500 for Zillow vs. $607,335 for CyberHomes. That's a pretty wide margin.

Does Zillow use actual MLS sales data or manual entries by agents ?

Here in Texas, that's a BIG mistake, because since we're a nondisclosure state, the Zestimates tend to be off by ten, 50, $100,000 in either direction, in mly experience. When, of course, the "comps" are on the same side of town, even.

I thought it was our fiduciary responsibility to give accurate information to our clients?

So in this case a good agent is worth somewhere in the neighborhood of $184,135?

Why such a large range?

Colleen- There is a big statement below that says "Need assistance interpreting? Contact a real estate agent." There are some other disclaimer, if you do try out the functionality quickly on kw.com you'll see them. But typically people are going to be looking up home values for homes that are not yet on the market (they are just beginning the process) so individual agents aren't too involved at this point.

Meyer - That is exactly what the Zestimate is for, a starting point. And KW is using it as a hook to use and stay on their site until you are ready to work with KW agent.

Don- It just went live, I am sure communication is coming.

Don and Tim - Even more reason to employ the services of a real estate agent! :)

Haha, I guess I should have paid more attention to the screenshot that I chose! It is a large range indeed.

The screenshot is from my in-laws house in Los Angeles and I guarantee you that the Zestimate is very close to the market value. Cyberhomes is waaaaay low on that one. Trust me. Their house just appraised at almost exactly the Zestimate amount.

Jamie - We get data from a number of sources. In some cases we are using MLS data, in most cases we are using public record information. We also have a few brokers who send sold data feeds and in some areas we are buying the data. A lot depends on what is available in the particular county.

Tricia- Yes, non disclosure states can be tough, but we do our best to get information in other ways. For example, we have contracted with MLS's in some areas of Texas to use sales data for computation. We also use public record data on loan amounts to impute loan to value ratios. So there are other sources for us to pull from, outside of public records. You can visit this chart to see exact how accurate we are in your county.

What do you mean, you have "contracted with MLS's in some areas of Texas"? As a nondisclosure state, I know that there are some very real restrictions on who a real estate agent can give the information they have by virtue of the MLS to without getting into real trouble. For Zillow to get that information via the MLS and distribute it to one and all would seem to be a violation of the nondisclosure status much worse than the ones that any individual agent could get in trouble for (sending out a postcard with sales prices on it, for example, it a definite no-no. Publishing the sales prices on the internet? I can't even begin to imagine the trouble an agent could get into for doing that).

Could you clarify, please? And is TREC aware of this?

Spencer - Keller Williams did the right thing. It shows they are out there using the new technology. Zestimates are amazingly inaccurate, especially in this market, but...you are correct...it does create the need for interaction with the customer. It's inaccuracy becomes a great tool.

I'm curious how ALL of the concepts will exist in say 5 years.

It doesn't make sense. Zillow has been know to be off and by lots.

Our websites allow you to optionally display Zillow Zestimates including charts and comparables below your listing. Even though some Zestimates are off, we have had some agents say they are right on and have helped sell a home. We plan on adding a Zillow Home Value widget soon.

Ultra Agent Websites

Tricia - We are members of these MLS's which allows us to use sales records in the course of our business (in this case, calculating Zestimate values) but obviously does not allow us to distribute that data (and we don't.) This is analogous to how you would use (but not publish) this recent sales when doing your CMA. Sorry, I don't have the info to speak to TREC directly, but I would guess they do?

To all regarding accuracy, maybe reading this post will help - How Accurate Are Zillow's Estimates? But the idea is exactly what others have described here, give some information as a starting point, something that the user can use and still remain anonymous. When they are ready for more spot on info, that's when they need to engage a real estate agent. In the mean time, it is a reason to continue visiting the KW site.

I think having Zestimates on our KW site is great! (And I can't stand Zillow!) But the truth of the matter is, our customers and clients are going to Zillow every day thinking they are getting solid information. It is our job, our fiduciary duty, as Realtors to educate our clients. Part of this is showing them how incorrect things like Zestimates really are. Show them real comps, then compare them to what Zillow says - which is often off by ridiculous amounts! I feel by appearing to embrace a company that is revered by the masses, then proving how wrong it can be, what we are really proving is our worth as agents!

When Zillow first came out, my brother called me all excited because he knew how much my house was worth. He was looking at my tax value. That is what Zillow had picked up. The fair market value of my house at that time was $40,000 more. I just laughed at him because I could not convince him that Zillow was wrong. In his town, Zillow had apparently gotten his home value right so he would not believe me. I have a hard time getting clients from other areas to understand that the values on Zillow are not correct. The consumer doing research only believes what they read. I was a KW agent two months ago when it was announced at a Dave Jenks Shift Book Tour that they were going to add this to the websites. I thought then that the clients would just be harder to work with.

I just checked and Zillow finally has my value right but it lists my home as 2174 square feet and it is 1756 square feet. Go figure. Sorry Zillow staff but if it isn't right don't put it out there.

I wonder how much Zillow paid KW to place this on their site.

Roland-

Drew from Zillow here. No dollars changed hands -- we don't pay other sites to use the Zillow API. You can take a look here to see the benefits of using the Zillow API.

Here we are ranked #29 with KW internationally and this is the first I have heard of this. Crap, we could be #28. This is a great idea to go with the flow as it tells the world we are not against shopping on the internet, we are for it. I can think of a zillion things against zillo, but the public thinks it has credibility so we have to deal with that reality.

Hi Spencer: How would I do this for my website?

Paul

Paul-

All the information regarding the API program is here (you'll probably need your website provider to implement the functionality though). If you're looking for a simpler way to add zillow data to your site, take a look at our widgets.

I agree with some of these comments, it is a great conversation starter so long as it is not off by too much. Depending on your market, it may be off quite a bit and may actually have a negative affect on sellers.....deterring them from inquiring further.

KW.COM added this to their national site. There is an "opt-in" button for the individual market centers to add this feature to their local websites. Check with your broker if you're a KW agent to find out if they've added the feature. Our's here in A2 has not.

Anyone can add a valuation widget to their own website. I question though adding one to the KW site as both Zillow and Trulia are close and also Way off at times! If they wanted to really give consumers some bang for their attention why didn't they go with a valuation model from Fidelity or First American?

That would be some added value there! Get a free home valuation that is "ACCURATE"...just log in with name,phone number and email and you can have it....along with checking the box that an agent will be contacting you shortly and that you certify that you are not under buyers broker agreement currently.

Rick

Hey Zillow -

Are you guys showing a profit yet? Lots of VC out there right now!!!

Ii'd be pretty leary of this. I'm not a big fan of Zillow Zestimates. Since the public is allowed to input their own data, the numbers are often unreliable. And even if we relid on the tax rolls, the data would still be unreliable. Our tax assessor's site has a lot of erroneous information.

Sorry. I don't mean to rain on your parade. I just don't trust the public data. Nothing can take the place of a CMA that's been done by a professional, who actually sees the subject property, and really knows the surrounding area.

This just makes us KW agents look like fools.

That is very interesting ! Shows the growth of the online sites !

I am glad it is KW and not RE/MAX. All this is going to do is create confusion more than already exists. If Zillow and the rest of these computer driven evaluation models were more accurate then I could see the benefit.

As professionals we are still left to do battle with the stubborn consumer who believes the zestimate is accurate. Let me add that I have seen Zillow's zestmate come in way under the true fair market value but the clients we are left to do battle with are the ones that have a ridiculous over inflated Zestimate.

I have found Zillow to be way off mark in REO and Short Sale driven markets where the numbers are significantly skewed. I will give kudos to the idea behind creating interest in the site. It is true that nowdays the tech saavy consumer is checking out the internet prior to making initial contact with an agent.

I actually like using zillow and using our John L Scott and Top Producer stats to compare notes , I even suggest Redfin. It all comes down to who your clients trust

Unfortunately I have found the majority of Zestimates are either way high or way low compared to a local realtors cma.

... and it really complicates some conversations with consumers who think because its in print on their computer that it must be accurate.

I like the idea of accurate prices readily available, but 'accurate' is the question here ....

I just noticed it on the KW.com site last week and it is so interesting to me... I know it opens the doors for conversation, but sellers can often get quite frustrated if a Realtors comps don't align with what they found on the internet (and vice versa). I guess we'll see how it goes!

Zillow is a bit off in our area -- but that said , it is a number that consumers know and ask about.

JAN

This is great!!! I always bring Zillow information to my listing appointments. Why? because my every listing appointment I have been on in the two years zillow has been part of the discussion. Now the zestimates can be, high, they can be low andsometimes they are right on, but I bring the MLS closing data and discuss values.

It's funny how my competition hates Zillow, when the consumer loves Ziillow.

Spencer, yes consumers want INSTANT info even if it's not very accurate. So if you don't give it to them, they'll go somewhere else first. Smart move by KW. They are always leading the pack!

Join my NEW group for professionals who work from their home office at http://activerain.com/groups/virtualoffice

Regina P. Brown

Rick- Thx for the comment, but wanted to correct that Trulia does not actually do valuations. Interesting that you say Fidelity is more accurate, as they are the parent company of Cyberhomes, the other company used in Spencer's screenshots. I can't comment on how accuracy among the sites compares, as Zillow is the only site that actually publishes what our accuracy rates. Also, thx for the check box suggestion, that gives us something to think about.

Eric- As a private company, we don't share our revenue numbers. But I don't think we will be trying to raise any more VC money at this time.

Lisa- In some counties the public data is great and in other the opposite situation exists. This is why we don't have a 'one size fits all' way of calculating Zestimates. Actually we have over 300,000 variations of the formula, to account for many of the differentials that exist across the county. In some places we rely heavily on the tax roll and in others we may rely more on transactional data. At the end of the day, you are right that nothing can take the place of a professional CMA. I think KW knows this which is why they are choosing to put this hook on their site to get people to keep coming back, knowing that eventually people need for a professional to get involved when they are actually ready to move.

Thanks to all for the comments. Yes, Zestimates can be high or low, but at the end of the day they are just a starting point. It is something that allows the home shopper/seller to remain anonymous and begin collecting information until they are ready to expose their identity and engage a professional. This is now a feature that they know is on KW.com and may keep them coming back to the site until they are ready to do just this.

I know I have said this a few times on this post, but it is worth repeating- if you want help explaining why a Zestimate may be off compared to your CMA, I highly encourage you to use this accuracy chartfound at the bottom of each page on Zillow and a link to it exists behind every Zestimate. On the chart you can drill down to your county and see margins of err and the percentage of times a Zestimate is within 5,10 or 20% of the sales price. I think this chart can go a long way in explaining to the consumer what exactly a Zestimate represents.

Those who have said that Zillow is popular with the public are so right. This month we will have approximately 7 million people visit the site. There is definitely a hunger out there for this type of information and being able to collect it on your own terms. The odds that these people will eventually end up using a real estate professional are extremely high, we are happy to at least get the conversation started, and now KW is too.

Drew: Thank you. I think you guys do great work!

Spencer, I would have to disagree since I find the information from Zillow (at least in my area) to be grossly incorrect. Of course it would be a good conversation starter but seems a little misleading.

Zillow is popular because it provides quick and ez information to the consumer. The quality of the information has proven to be irrelavant as Zillow has grown and has brought itself to a playing level against other big sites like Realtor.com.

Yes, the estimates are usually WAY OFF, especially in Texas.

Zillow has similar ideas of its competitors. Sell to agents & loan officers. Why not? Realtors will pay for anything once, maybe twice! Especially if they are desperate for business. As long as the consumers keep clicking, Zillow will survive. That is unless they need REALTORS AND LOAN OFFICERS TO PAY THEIR BILLS!

If anything, I'd like to think that Zillow is making their market place more of a challenge, which hopefully will create better products for agents if they choose to "buy" anything that is being currently offered. Good competition only helps the consumer, right?

The consumer determines everything sometimes, regardless if we like it.

Hey Spencer and Sara,

I think it is great that KW put this on our sites. The whole office can opt out and each agent can opt out if they want. Zillow is much closer to accurate in our area (NWMLS - Seattle Tacoma Everett) than you were when you started. Sometimes still off.

The bigger point is that nearly every person that I talk with when taking a listing in this part of Washington State brings up the zestimate and a couple of others. Our consumers are hugely internet savvy, so that allows me to show my "hyper local market knowledge." And then continue to discuss the huge amount of internet and other social marketing we do to sell their home, that most other agents and companies don't know about or don't do. I consider it a win-win for both companies and my clients and our agents too.

List and Sell (and know your market numbers) Gary @ RentonHomeFinder.com Renton WA KW