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Please Flag this under: Hilarity... Countrywide Loss Mit uses ZILLOW

I was on the phone with a mitigator at Countrywide, discussing 2 of the listings I have that they are the lender on. I was trying to be sly and find out what the BPO had come in at (they wouldn't tell me, so I was trying to ask different hi/low questions to get a hint.) and get a guage on how acceptable the offers I had submitted were.

I was just about to give up when he said: "We use Zillow to value homes, how is your offer compared to Zillow?"

I couldn't control myself, Bad Andy had taken over and blurted out: "You've go to be kidding!"

oops, remove foot from mouth and try to regain control of the conversation...

I pulled zillow.com really quick and told him that Zillow was way off... it said the value was over $300,000, and I've had the houses on the market for almost 6 months, starting at 279, then 269, then 259, and then 239. Since day one I've been getting offers between 180-220.

$300,000 my butt!

This is the intelligence level of the people we're up against! If someone at Countrywide would sit down and compare 10, yes, just 10 of their recently sold REO properties to what Zillow SAID they were worth, they'd probably see that Zillow is nowhere close to reality.

Andy's Billion $ bank bailout:

According to RealtyTrac.com, in the month of February there were 290,631 foreclosure filings in the US.

If a lender rep pulled a Zillow on each of them, they spent over $363,000 in February alone...here's how:

290,631 X 5 minutes = 1,453,155 minutes spent on Zillow / 60 minutes = 24,219.25 hours.

Even if the average mitigator makes $10/hour, when you add in taxes and bene's it's about $15.

24,219.25 hours x $15/hour = $363,288.75 in wages to search the totally useless Zillow site.

and that's not even counting office space, desks, telephone lines, computers, internet access, etc!

Hey Countrywide, if you (or any other lenders) are reading this... What buyers are willing to pay in the open market is the value of the house! We just want to make your job easier and not have the buyer, seller, you, and I wasting a bunch of time! (by the way, we've had this FULL FILE in at countrywide since December 2nd! Still no answer!)

Thanks for listening to my rant.

Andy

p.s. Seriously, hit the little red flag by the "comments" section and flag this under "hilarity", I know it's not really funny, but "imbecility" was not a category to choose from!

p.p.s. To subscribe to my weekly e-zine, visit www.AndyTolbert.com

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Posted by Foreclosure Specialist Andy Tolbert on 03/16/2009 05:48 PM

Comments (148)

Short Sales in the Sales Strategies / Tactics Channel

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148 Comments on Please Flag this under: Hilarity... Countrywide Loss Mit uses ZILLOW

MAR

WOW! Unbeleivable. I wonder if they use Zillow to issue mortgages? I think I'll have some of my clients try to get some from them!

Somehow I actually don't find this very surprising.

What to me is more alarming is that the banks haven't grasped that we are in a declining market, in other words, the longer they wait to make a deal, the less the property is going to be worth.

ohhh wow! I see exactly what you mean in my area too. I noticed zillow compares waterfront to non waterfront houses in the lake norman area (it can't tell) and it messes up the values pretty bad. It also does the same thing with lots/land. The only time it works pretty well is in an established interior neighborhood.

Oh MY!!!! I needed a good laugh... Sad, but funny. BTW, loved your math!

GREAT POST!!!!

That really is unbelievable. Zillow in our area can vary (both high and low) by up to 30% from what I have seen. Really unreliable.....

There would be lots of unzillowable things about a foreclosure wouldn't there? More than the average home. A classic from 2006 unzillowable to coin a phrase

Andy, Anybody with any brains knows that sometimes Zillow is close and sometimes it's way off base. To actually rely on it in our market, with everything moving so fast and every neighborhood different, plain ignorance.

I don't understand BPOs, either. So often the banks hire someone who's new to the business and is doing BPOs as a way of breaking in. How does that protect anybody? Why don't they just pay an appraiser?

Exactly when are these banks going to get their act together? Because the fast they do, the better it'll be for everyone concerned.

Hilarity is right! but no shock there.

I love Zillow (JK) if I add or subtract just a half bath on any home in my area the value fluctuates approx $50k! Can you imagine??? Everyone in town would be adding half baths!

Does anyone understand why there are so many issues getting short sales approved when you have the inmates running the insane asylum!! That has got to be the line of the year and I thought I had heard it all!!

The 1st thing I would have done is copied him with the small disclosure statement that Zillow makes regarding values. I am not sure about Florida but I think in Mass it is 65% of the time the Zillow value cabe be off as much as 30% from the true value.

Hey Andy,

This is just awful! I can't believe they would use Zillow for home values, I am sick to my stomach right now... No wonder these banks are failing, they can't even do a little work to save there butts. UGHHH This makes me so angry....Your rant was much appreciated!

-Lisa

Geez, no wonder the banking business is such a mess. How horrible!

I can't get my jaw off the floor. And you are right... that stupidity is what we are UP AGAINST!

You know, I took my 82 year old mother to the doctor the other day to find out why her memory is failing. When I asked for a diagnosis he cracked open a fortune cookie.

All I could do when Andy screamed that they use Zillow to establish value was laugh. It is insane that we have people in power to make decisions regarding both the Bank's and the Seller's future on absolutely false information. I don't know how many of you have actually looked at the way Zillow values property but they seem to take every property within a 1.5 mile radius (both low end and high end, waterfront,etc...) and throw it in a blender to come out with the average dollar per square foot. Last time I check that was totally against Appraisal Standards. It just goes to show how the 2 different sides of a institution never talk because the Mortgage side would laugh in your face if you try to use Zillow.

I should be shocked, but for some reason, I am not. This really explains a lot. I always thought some moronic reasoning existed in most loss mitigation departments, this just confirms my suspicions and why things are so jacked up.

This is the firast time I heard of a bank using zillow. I hope all of the Loss Mitigators are not using this to get value.

Andy,

Please keep RANTY ANDY...... hopefully SOMEONE at the banks will start to listen!!!!....

Kathy Opatka Re/Max OCEAN CITY< MARYLAND

I would laugh if I wasn't so upset - didn't we say this would happen? Has anyone notified the press on this moronic development? Egad!!!

That's just one more reason why my short sale is taking F O R E V E R through Countrywide.

I have one with Countrywide, they would not tell me the BPO value. I did ask for an interior BPO because the house is in poor condition and they said they would. Now I just have to hope I don't get an awful agent doing the interior BPO.

As I was reading your post, my lender called. We both got a good laugh - and it gave me a chance to chastise her for not having her pic on facebook.... for crying out loud, get with it!

So why don't they use the Zillow site to make new loans? I mean if the site is so accurate for establishing value why would you need appraisers at all? The fun just never ends.

That is just amazing! Unbelievable....if only they would use a few of their brain cells! I submitted an offer on a short sale a few months ago, the offer was 6000 over the asking price but because we asked for 3000 in closing costs the bank rejected our offer and accepted one that was 3000 under the asking price but didn't want closing costs. No surprise at all that the banks are failing!

I have been trying to convince my clients that Zillow is skewed and to take their numbers with a grain of salt. I never would have that mortgage companies would use the information from Zillow.

And we wonder why the banks are in the shape they are? Any real estate professional (with an emphasis on the word professional) would not consult Zilow. Countrywide is obviously trying to cut corners, but they are only shooting themselves in the foot.

Thanks for posting. I always wondered when ZILLOW would come up and bite us in the butts. Hmmm . . . WHAT? Countywide is too "frugal" all of a sudden to either hire a bona fide BPO, or hire an appraiser? No wonder the listings sit . . . and sit . . . and sit.

Just goes to show how uneducated some people can be. I've had people argue the same thing with the property appraiser's value. The property appraiser says it is worth $200K but comps all around it are selling for $120K.

I'm sorry, I don't think it's funny. It's downright pathetic and scary. What is going on in this world?

I'm stunned. This explains EVERYTHING!

Hi Andy, it's David G from Zillow,

Loans can neither be approved nor denied based on Zillow's Zestimate value. If your clients are ever denied financing on the basis of a Zestimate value please send me the loan officer's contact details so that I call and set them straight. It's not uncommon for lenders to cite Zillow but I find the reason they do that is typically to show the homeowner a tool that they can also access from their own desktop and not to take the final call on a loan application. In your case with the Zestimate above market value this is obviously not a worry.

Lenders have many proprietary tools just like Realtors do. Zillow is an AVM (automated valuation model.) AVM's have long been used in lending for ballpark estimates when appraisals aren't required. Lenders typically have access to at least one commercial AVM and often more than one. I'm 99% certain that Countrywide loan officers have access to AVM's. The fact that they're using Zillow is in fact a very favorable comment on Zillow's relative efficiency and accuracy when compared to the industry-leading commercial AVMs.

I guess that's why Countrywide ended up where they did...

Thanks for the info.

John Keene

Crazy times. Sorry Judy I have to disagree. Most want agents with 2 years experience and any way I would rather use a new agent who is diligently working and searching the MLS than someone sitting behind a desk relying on Zillow numbers. At least they are serious about their future and doing research the right way. Just my opinion. I think it is a valuable tool for teaching and learning about the real estate market in a new agent's career. This is kinda like the board members of an insurance company deciding on to treat a patient. Let the doctors do the doctoring.

Having done 5 short sales with Countrywide, I can believe it.

You mean to say that Countrywide does not do BPOs or licensed appraisers? That's ridiculous. Funny/serious post.

Carrie and Kathy Sampron Unbelievable! I hope this is an anomoly.

Hey All, thanks for the comments, you've made my day! Especially after spending all morning on the phones with Countrywide, Saxon and others trying to get status updates! AAAARRRRGGGHHHH!

By the way, notice that comment #30 is from David G with Zillow!

David: I think you misunderstood, it isn't about loan officers using Zillow, it's about their short sale department using it to determine whether our offers are acceptable or not. When the Zillow is high (like it is in a rapidly declining market like Florida and others) the bank looks at that value and then turns down our offers because they look very low comparatively. Then the seller loses their house to foreclosure because the bank wouldn't accept the offer, so the fact that banks are being stupid is INCREASING the foreclosure problem when we have ready-willing-able buyers but the Loss Mit departments think they can get better. Then we see the same house hit MLS 3 months later for 10-30% less than our offers were for!

Please take note of the comments from real estate pros to this post and realize that Zillow and other tools like it are not a realistic picture of our rapidly changing market today.

Trust me, when Zillow and other similar services first came out I was VERY excited that I would have one more tool in my arsenal, and I actually DO use Zillow all the time, but NOT for the Zestimate... I use it to find comps and then through that info, MLS, and public records, I ascertain my own "Exactimate" for my clients.

Obviously a hot button topic based on the comments!

WOW!

I would like to say that I am surprised but I can't. not at all since we are talking about Countrywide.

I had 3 offers on a short sale house that they held the mortgage on, and evrytime they said that the offer is too low that was all last year and the homeowner still lives in the house and Countrywide does not get any mortgage payments for at least 2 years now.

Kelsey: They do BPO's, they've already done THREE on this property since I submitted the full file on December 2nd!

I still don't have an answer on the short sale!

I've already lost that buyer (Can't imagine who wouldn't want to wait over 90 days in a declining market!) and found another one.

yes folks, you read right, THREE BPO's, and know they're assigning my clients file to YET ANOTHER mitigator...I wonder if they'll order another BPO too! The house has gone down 15% in value since December 2nd...

And we wonder why the lenders are going broke!

OK, a friend of mine mentioned this to me on Face Book. I thought she was trying to be funny. I even checked my calendar to make sure it wasn't April 1st. She sent me over here. I see that she wasn't joking.

<shaking my head> I really don't know what to say. I really don't.

Even Zillow admits that their estimates are a guide and the client should consult with a real estate agent. Having a lender even think about it is beyond belief. This is not a knock on Zillow as Zillow will even not their success rate of their valuations. I guess that confirms we are truly in wacky times...

With a variable (according to them) 30% DIFFERENCE, Zillow will be off on that $300,000 home by about $90,000. That is enough to curl anyones hair. In our area Zillow is so off based they are laughable... Shows you what the media and advertising can sell to the public.

Interesting in that I was messing around the Better Business Bureau site and put in Zillow's name. Needless to say I was shocked at the rating it got. Give it a try and see what comes up. What a laugh in my opinion. Our state association´s contracts now have a clause in their listing form where sellers can prohibit their homes being seen on sites that do auto-valuations.

Hey Andy, love "exactimate" ... get that trademarked while you can.

I get it and the exact same feedback applies. Zestimate values can not be used to determine the final word in short sales or any other financing scenarios. If need be, I will haul out the legalese to explain and ensure that the mitigator won't try it again; just get me involved.

This does not surprise me at all. The loss mitigation department should be called the equity losing department as their constant delays on short sale files are costing them a fortune. I had a file recently that I worked on for 14+ months. Countrywide took over 5 months to respond to offers in a declining market and the buyers were long gone by the time the repsonses came in. My last offer was submitted at FMV with a buyer that was willing to wait. CW decided that this had been going on to long and they let it go to a Trustee sael. I spoke to the REO agent and they will be pricing the proeprty for less than my last offer. BTW...over the span of 14+ months the $390,000 property is now worth 50% less!

Wow...if they could get the appraisers to use zillow...and I could get a home equity line based on that value, I could use that money to buy several investment / income producing properties and then do the same thing with them...I could have an empire within 6 months! Bwwwaaahhhhaaaahhhhaaahhhaa!!! (read: evil laugh) Thanks for sharing that...unbelievable!

Sounds like Zillow. They are always wrong and no one seems to be aware of it except us agents that are out in the trenches daily. Usually they are low in our area so that works in our favor.

Hummm

Even Zillow would admit they are only estimates on the tax records.

Sounds like a lazy processor.

Andy - How cheesey! Next thing you know, they'll be getting their valuations from the Psychic Hot Line. Ralph

This one is just too good to pass by without commenting! What in the h*** is going on at Countrywide? When you think they couldn't get any worse, something like this pops up. Unbelievable.

Those people are just order takers and get paid minimum wage and are not qualified to give you value...using Zilllow proves the theory that they just aren't educated. I can say alot more regarding time and lost time but I won't.

I'm not sure which is sadder: the fact that they actually admit to using Zillow or the fact that most of us don't seem to be in complete shock over this development. Why would they listen to an experienced agent who is familiar with the local market when they can turn on the computer and go to a national website which doesn't take into account such important features such as neighborhood, road noise, convenience to area attractions, etc.

This only makes sense!! Because I deal with these guys everyday and they are always a mess. Not willing to spend $100 on a BPO to make a decision worth thousands.

In all of my 30+ years in the busines, I have not found a substitute for common sense. Instant evaluations are juat like instant coffee. Not the real thing. Too bad Countrywide has a bad rap, they used to be reliable and respected. Tsk,Tsk.

Do you think Zillow helps CEOs value their worth for bonuses? That would explain the huge disconnect I feel everytime I hear about some dude with a $700,000 a year salary who needs to be paid $2,000,000 not to go work for the competition who, BTW, are already in bankruptcy!

That's like if you look at "Kelly blue book" for a car value...and expect it not to be overstated...and we wonder why we are where we are today

Evening Andy, Hilarity it is ! Hilarious because Countrywide would resort to using something notoriously incorrect ! Amazing, just amazing !

Andy - You are speaking my language! Countrywide is the bane of my existence! I had a cash offer on a duplex within 7 days of putting it on the market - only 10k below asking price. It took them 4 months to approve it. Too bad it was 2 weeks AFTER the buyer's walked! They've lost at least $40k on this one deal due to dropping prices! Not to mention the lost mortgage payments!

You mean the prices on Zillow are not correct? wow who knew.

That's about as funny as getting a desk review done on one of your appraisals when the appraisal was done by an appraiser who has luved there for 30+ years and has 32 years experience appraising. They pull out this nonsense AVM and try to say the value of the highly accredited appraiser is wrong. Stupid I tell ya...

There was a time when I used to wish that buyers, coming to see my listed properties, did not know about Zillow. At that time selling prices were higher than what Zillow would show.

Personally, I use Zillow for trends and not necessarily specific valuations.

I am so amazed that real estate "professionals" don't get it. Zillow is the future of valuations. All the bank has to do is to apply a factor. For example, Zestimate says $300,000, apply 0.70 factor and work with $210,000. $300,000 x 0.75 = $210,000.

There...the banks have eliminated the need to get that silly BPO done, and have eliminated all the time and expense of getting the BPO. Banks have used real estate agents as their foot soldiers to drive the mortgage business. Even in 2008 agent assisted house sold for 26% more money than a FSBO, and NAR is very proud of being a seller-representing organization. Thus generating more interest revenues for the banks. http://www.realtor.org/research/commentary_falling_fsbo

Real estate agents MUST understand that banks don't care about them when they show up as buyer agents. Heck, banks don't care about the buyer either. Bank of America is amusing itself with one of my buyers. :)

If the Real estate industry did not wake up to the clear and present dangers, real estate agents will have to wake up and smell the stench of "irrelevance" very soon. This industry has thrived on the idea of hiding information from buyers. In the age of total disclosure of Facebook, Twitter, MySpace, secretive MLS' may be toast.

NAR will have to show respect to the all-empowered buyers, or...

Lee

BankFreeInvesting.com

Lee Ali is the author of "Crowdfunding: The Solution to Eliminate Booms and Busts in Real Estate Forever!”

They have to be kidding-- but of course they aren't -- what a joke...

Andy- Countrywide just keeps getting worse as they keep making their new short cut changes, that end up taking longer than ever before. They are absolutely the worse out of all the lenders. At least at the others we know the chain of command and can reach the people at the top. Our top people we had at CW quit! They could not even take it anymore! Katerina

Now I've heard everything....

That's absurd. And we wonder why Countrywide of all the lenders out there is one of the worst to deal with when it comes to short sales and loan modifications?!

Ugh. This is despicable. I cringe everytime I get a short sale from Countrywide... I always know we are in for ride!

Besides, for those of us who were active in the 2000-2006 market, an appraisal is what a bank wants it to be. :)

Hi Andy -- I wanted to laugh and cry at the same time. The insanity never ends. I have had some very, very bad experiences with CW that would make one's head spin 360 degrees, multiple times, but this one takes the cake!

Think about it, these are the same banks who by their own admission can't value the mortgage backed securities on their books (which is their business) so it's no wonder they can't value their bank owned properties.

A bank owned property has a stigma - a well maintained home not in foreclosure (which Zillow would use for a "Zestimate") is worth more than a winterized foreclosure which is offered 'As Is'.

Kent Davis

Hi Andy, This is both hilarious and yet frightening!

YOU HAVE GOT TO BE KIDDING ME! Wait, that's what you said. That really does take the cake. Could it possibly be true? I'm blown away.....

Everyday there is something else that shows how messed up the system is.

Andy: You got my flag. Hopefully someone from Countrywide takes this posts back to the office for the weekly office meeting. Interesting numbers you presented in the money spent on searching Zillow.

Zillow in my world is never close to reality. Texas is a non-disclosure state. I'm not sure what use it is for anyone in Texas.

That does not surprise me at all. I submitted an executed purchase and sale agreement along with a COMPLETE AND THOROUGH short sale package with all requested documentation on 10/05/2008!!!! In fact it was sent several times. Then today we receive a fax stating that Citigroup is aware we would like to do a short sale and basically requested another complete package containing all of the same documentation previously submitted. Who is running these companies and why are they getting more bailout money??????

Zillow is a wonderful site but you should never use anything but sold properties to find your value. good job countrywide

Oh my God.

ZILLOW and other such sites are wraught with GENERALIZATIONS. Non specific ways of determining value. It truly creates all kinds of issues.

YOU HAVE GOT TO BE KIDDING ME ! I have heard of Counrtywide AKA Bank Of America doing so silly things.. Now this tops the cake

I always tell my sellers and buyers not to use Zillow to get the value of the home. Let's see, I know they need a bailout to keep afloat with all those issues.

Spencer from Zillow here.

Countrywide shouldn't be using Zestimates, in my opinion. Zestimates are meant as a starting point to determine a home's value. A real estate agent or an appraiser will give a more accurate opinion of a home's value than Zillow or ANY automated valuation model. Zestimates are meant for consumers, not lenders. Lenders have their own AVMs and that's what Countrywide should be using.

While we're on the topic, here's more information on Zestimate accuracy.

Another REO agent in Las Vegas refers to loan mitigators as 'paper hats' ... because that's what they were wearing in their prior job. Unfortunately your example is widely symptomatic of the greater short sale market.

With all the emotional outpouing against Zestimate, Zillow must be on to something. :)

At this time, I don't use Zestimate for valuations. I use it for trends.

What Zillow is doing is the future of real estate valuations. It is just a matter of time. Zillow is one of the companies which WILL define how the real estate will be done in the future.

Lee

BanksFreeInvesting.com/blog

How does a "normal" person survive in these places? Anyone with half a brain sees that they need to clear out inventory and if I worked at Countrywide I would be racing to do it before anyone else! Thanks for the laugh!

Andy - I couldn't resist checking out your post after reading the title. IMHO this is the icing on the cake to the insanity that has taken over at Countrywide. They get a bailout from the government, sit on the money and now want to use Zillow to determine value instead of paying a licensed appraiser? When does the greed end?

Zillow's popular with many consumers, I guess this isn't too surprising, but it's often not accurate enough.

I cannot believe the management at Countrywide would support the use of Zillow valuations. Unbelieveable!

That is unbelievable - Zillow of all things... I am not a big Zillow fan myself. I would have been laughing my A** off!!!

We have had a short sale file with Countrywide in process since November, and we still don't have the final word on it. NOTHING surprises me with them anymore.

MAR

Hi Andy!
I had a call from a guy at Zillow wanting me to buy an ad. I told him that the day that Zillow valued my own 4BR/3BA, 3000+SF home (with 2 family rooms, a den, a bonus room off of the garage in one of the most sought after neighborhoods in Sacramento) at $365,000 when it was really worth a minimum of $700,000 was the day I decided I would have nothing to do with Zillow! His answer? "Historically, we are on average within 10% of market value." I just wonder what market he is referring to! Shame on any professional that uses Zillow for valuation!

Oh. My. God.

Andy, I once worked at a company where we developed Nanny Cams. Our lawyers made up print the disclaimer "for entertainment purposes only" on the web site and on the product itself, in big bold letters. We didn't want to get sued when people relied on our product for something important, and they blamed us for a bad thing happening in their life after using our Nanny Cam.

Does ZILLOW have the same disclaimer? If not, they should. Doing a recent "test" of Zillow, I found that 80% of the "Zestimates" were way off base. In other words, it should include the disclaimer "for entertainment purposes only".

Zestimates have their place. I like to run them myself, I think it's fun! It just isn't a tool which the professional real estate industry should rely on for professional purposes. Zestimates should be ranges instead of values, anyway!

This is why computers cannot replace Humans. Interpretation of the information is a keenly human skill. This is the reason why appraisals cost between $350-475 for a "professsional" to complete. We need Human Professionals paid a reasonable fee for their effots to provide quality results. This is why Desktop appraisals and AVM's are no longer valid for most transactions. Interpretation.

Andy;

I would venture to say that the three BPO's were all lower- and therefore the zillow figures just looked better to them. I have done BPO's for several reo company's and they just do not like to hear the truth when what is owing is about 1/3 higher than my BPO values (which are based on comps-no older than 3 months)

That is an eye opener! Zillow is way off the area sale comps. Great post. It really summarizes the frustrations of working with short sales.

Countrywide never ceases to amaze me. They (B of A) deserve to crash and burn. They can't even get out of their own way to get some money for their fallen assets. You're correct, if the offers come in at 180-200, the properties can't be worth much more than that, can they?

Andy,

OMG! Thank you so much for a good joke first thing in the morning! Best of luck on the listings.

I think many of these lenders are taking their cue from Washington as it seems no one wants to deal with good old fashioned Common Sense anymore. Just one more reason we should be fighting like crazy to get more senseable people in the industry and the White House.

It's no wonder many of us can't get sales and we have such a backlog!!! Way to go Countrywide, you got my BONER of the YEAR AWARD!!

Yikes! I should add this to my list of 10 common misconceptions about buying foreclosures...the misconception that BPOs are done by a real person!

One has to wonder if they are trying to take the easy way out when it comes to property valuations!

Zillow is not only off in their valuation of homes, but also in their reporting of data! Weld County, Colorado was said to have the highest rate of foreclosures in the nation not long ago. Turns out, Zillow was reporting the data more than three times over. We are a trustee state, so foreclosures go through three stages before actually being foreclosed. All three stages were reported as foreclosures, including properties that were redeemed...

Are you kidding me. Now I understand why an offer we had on a property was turned down based on recent comps we were dead on yet their "appraisal" came in at $230 and I wonder how any appraiser could get that. I understand now.

Zillow is hit and miss for our area. It doesn't seem to show all of the foreclosures. I think it's unbelievable that a business would rely on that as the "sales" price. A current market price is based on what the same type of house is currently selling for. I heard some of the banks regularly use Zillow for pricing. Funny thing is when things were up and I worked in the bank, we couldn't use Zillow (it was too unpredictable). It also doesn't give you a clear value when their are mixed use areas (manufactured homes within range of site built homes).

Andy, Thanks for the blog and also for your comments to some of the responses. Employees at any lender are scared to death of making a mistake and being fired as many of their co-workers have been. They will not make a decision. As a result, paper gets shuffled and misplaced. We get frustrated and apoplectic. Have a nice cup of tea, sit on the mountain and enjoy the view and dance in the rain.

Andy - You simply couldn't make this stuff up! It reminds me of a "stupid crook" story!

Unbelievable. Makes me wonder if the bank we were dealing with last summer was using Zillow for its BPO when it turned down a $640,000 cash deal (that would have negotiated higher) on a $715,000 note and let the house foreclose and just come back on the market last week at $534,000. What are these people thinking????????????????

Andy ... I just can't even believe that someone would use Zillow as a reliable source!

I've never trusted Zillow...they have always been way off when I look at them. Sometimes it even had closed property values incorrect( dont know if they've changed that or not). But I have sellers tell me that Zillow said this/that, and I'm like, their values run on some kind of equation, not comps that sold here in the area! If a bank is using that as their valuation, we are in such big trouble! They already don't know a great offer when one hits their desk...particularly in short sales!

I feel sorry for the Zillow guy, who has probably been reading all these responses. How must he feel knowing that almost all of these were NOT favorable towards his company? Oh well, guess they need to figure out how to make their information truly reliable. :-)

Thanks Andy. Needed the laugh.

The same Countrywide that has all of their properties in our county listed with brokers in different MLS's. No one here even knows they are on the market. And the same Countrywide that got a home here back in foreclosure on Aug 12th of last year. That same home remains unsecured, out in the country, and has not to my knowledge appeared on any asset manager's radar screen.

I was hoping our county assessor would use Zillow as the base for my property tax bills! Why is it the Assessor's office chases sales in a good market for determining value and totally ignores the changes in the market we have experienced in the last two years.

Again great article Andy-retweeted on twitter yesterday. I happened to blog about zillow just the other day-I have serious concerns about the "valuations" they are doing. I'm truly not trying to put these guys down. I think they are well meaning but any so-called professional who would use them for such important transactions should be SHUT DOWN immediately especially if they are getting bailout money. He're the article if anyone's interested. http://appraiserdesk.wordpress.com/

Don't you love when Buyers look at Zillow and it only is relevant to them if the zillow est is less than asking price. If it's more, they never say that Zillow must be right and they'll pay more than asking. Lots of cases in our market where Zillow is too high (for properties with a difficult location/access/condition issues) or too low (recent superb remodels, large lots, etc.) compared to nearby comps. Funny how that works.

Does not suprise me at all! Countrywide is one of the hardest to deal with. What blows my mind even more is that Countrywide took bailout money from the federal govt. last fall and rather than loaning it to home buyers they purchased paper from other banks! I know of 3 loans specificaly that Countrywide purchased from Greenpoint Mortgage last fall. The properties these loans were for had been under a purchase and sale contract for 3 months waiting for a very small ($8K) short sale approval from Greenpoint. Greenpoint never approved the short sale and I got one emplyee from Greenpoint to admit that they did nothing for 2 months on these files because they knew Countrywide was taking over the loans. Countrywide is now holding the loans and the houses have dropped in value another $40,000 each. And what do you know...Countrywide has had the short sale packages for 3 months themselves now with no news of approval anywhere in sight. Rediculous!

That explains all, I had to pass this onto some former CW people....even they laughed. No wonder it has taken at least 6 months to close a deal

Seriously - you just encountered this? You get what you pay for. All the mortgage holders pay minimum wage plus bonuses- they don't have anyone who knows what they are doing. Only how ot read a chart or look up info on line. They dont want to hear from us because we know the truth!

Andy, I have to think whoever you were talking to at Countrywide was pulling your leg or giving you a bit of the Blarney this St. Patrick's day.... Countrywide has their own proprietary software through Landsafe.... I think it's called ValueFinder or something like that.

Good luck with your short sale.

SoCalAgency.com

Wow - now I know why it took over three months for Countrywide to give an answer on a short sale and then they counter offered with a higher price. They were waiting for the Zillow "Zestimate" on the house to go up in price because they know that all of today's savvy buyers base their offers on Zestimates. That explains the mess the banks are in!

The banks need to get their acts together on these short sales. There is going to come a time that the buyers are going to forget the short sales and just wait for them to go to foreclosure at a lower price. The time frame they have to wait would probably be about the same either way.

It would be hilarious if it wasn't so sad. I'm sure that someone there at Countrywide thinks they are saving the company a lot of money because Zillow is free & BPO's cost them around $150 & appraisals are about $300. But what is the real value of an experienced quality valuation? The real value of an accurate valuation can often be way larger than the small fee to get it done.

In a declining market like we have in many areas, extra time on the market costs thousands of dollars. If by using zillow or an inflated BPO they set their price too high & sit on the market for even 2 months longer, they may loose several thousand dollars while they save $150 or $300. Multiplied many times over that probably adds up to millions lost. WOW, I wish I could charge a percentage on what I could save them, I'd be rich in no time.

I'm a certified residential appraiser & real estate agent of over 20 years. I've appraised hundreds & hundreds of REO properties over the years & probably saved my clients countless money when they took my advise. Far too few bank people have any idea what goes into a thorough & accurate valuation analysis & how that can help them net more. Oh well, in a perfect world the most valuable people would make the most money. That's why I also sell, not enough money in full time appraising with all the supposed know it alls getting their valuations from Zillow & who knows where. They get what they pay for.

Great one Andy. I had a short sale offer on one in Fresno county. The bank said no we are foreclosing on it. It went REO within 2 weeks and it is being sold much lower than the offer we had in. If you add foreclosure costs to this, it's a wonder we aren't giving them more of our tax payer money. I did find out however that the other agent is sewing for the commission as we had a ready, willing, and able buyer and seller and the bank denied the offer. PS they request a 14 day or sooner escrow and this was WAMU file.

OMG !!! and this was the first lien holder ? Wow. I have had that fro mthe second lien holder when they don't want to spend money on a BPO, they cam back with a value from zillow that was 40 % more than the market value and the BPO the was done by the first lender . I told him even if that was the case you as the second woud not get a penny more since it still be a short sale it woud be the first to make the difference. So I had to send them 20 comps to prrove my case.

That's insane....the blind leading the blind????

MAR

I would laugh, but I just can't. Short sales are just a mess, who knows what else is done within the walls of the lenders. Zillow valuations are on both sides of the middle, either high or low. We always have to remind that buyers who hang on Zillow a lot that they are just that ESTIMATES and automated at that. (just what our Zillow guys said above). Of course you can throw in the mix the buyers that look at the last sold price of the house or the county assessment and base their price on that! Which can be way off too. ~Rita

That is unbeliavable! Is bad enough that home owners believe Zillow's values but now we have to deal with lenders on this too, no wonder we are in the mess we are.

I am not surprised. I was ask to use information from Trulia for a BPO.

This explains why negotiating a short sale with CW is next to impossible.

Andy,

At first I was amazed by this but now I am wondering if or not we can use this as an opportunity. Zillow is and always has been way off the mark. I don't even know how many hours I have wasted proving their information wrong to potential home sellers. I have had to tell clients that if they relied off Zillow estimates they were outright fools and they figured out what I meant when I showed them actual sold comparables. My question is, what other entities are using Zillow for home valuation? Our tax assessors by chance.

Perhaps we collectively can persuade each of our boards to give our clients the option of whether or not their property info is released to companies that provide AVM's.

David G, from Zillow's response necessitates this as he has proven that their data is being used on a wide scale basis, even though Real Estate professionals know that their data is flawed beyond belief.

That is amazing they can rely on such a useless tool. When I train agents I basically boil it down to how the asset manager feels for the day. I agree that this might be something we take advantage of. Prior to presenting an offer it would be advisable to see what Zillow says so we know what Countrywide is looking for.

Dear Andy,

Crazy, crazy! I have found Zillow to be all over the place.

Sometimes their estimates are too low.

Thanks for sharing.

Barbara

Thank You Andy. This sure explains a lot. But it's scaring me, too. My mortgage is with C'wide. :(

Looking at the overwhelming response you've received on this post from professional Realtors and Appraisers all over the country, it's clear that this is a very real problem and that lack of any professional and experienced people handling these files at the lenders and mtg servicers is clearly a big stumbling block to resolving this crisis. I've lost count of the number of times I've heard an agent or professional investor say that they've made offers on short sales, never got a response, and months later found the property sold after foreclosure for many thousands less than the short sale offer.

How can we get the attention of people who can do something about this? Are there any people who can do something about this?

"For lack of a nail the shoe was lost. For lack of a shoe the horse was lost. For lack of a horse the battle was lost.... And all for the cost of a three penny nail."

Soldier On!

Lea Lagueux

Tampa, FL

Andy, that is amazing. I can't believe they are using Zillow - real estate is local! I guess they don't get that. Thanks for this interesting post. Bonnie

So sad and so bad. It is no wonder our beloved country is in the shape it is now. At our office we do not support Zillow by adding to their database, etc. The data they have is not only held out by Countrywide to be viable but by many in the public sector as well. Praise be to our MLS systems where the REAL numbers are kept!!

Shocking but not surprising. Fortunately, we are a rural resort market where Zillow isn't much of an influence.

This would be funnier if I wasn't working a Short with Countrywide right now....

Want to hear one that is funnier than you would expect, the loan officers are using Zillow too. Two weeks ago I got a call from a hard-money lender who needed comps on a refi because our area is not covered by Zillow and he had no where else to turn. This lender deals with billions of dollars of private investors money daily and he depends upon Zillow. I use Zillow, I like Zillow, and Zillow is not a problem, it is public perception that going around Realtors is a smart, money saving manuever. The truth is that facts like this should be exploited by the NAR public ad campaign with the perspective of how Realtors could expedite this housing problem if we were not avoided by all!

I know for a fact National City Mortgage does something similiar to this. They pull 10 comps and thats your price. What happened to doing appraisals?

Leslie

And we wonder why Countrywide failed...

MAR

My Countrywide short is coming up on a year now. The value of the house hasn't been the problem, though. They just keep asking me to re-send documents I've already sent. How about we all share with each other which banks are easy to work with, and we can stop wasting our time on the others?

Hi Bad Andy,

I guess I am Bad Tamara :-) I tell my real estate college class that zillow is not even an option and not to mention the word in my class.

oh vey!

Great post, by the way and congrats on the feature!

MAR

Whoo Hooo! I've been saying that Zillow is most always wrong since the first day I heard about their existence. It breaks me up when I hear a buyer or seller quote their statistics. I go there and check them out once and a while after I have done a complete CMA, so I KNOW they are wrong! There will never be a replacement for a boots on the ground Realtor. I salute all you hardworking brokers. This too shall pass.

I want to stick needles in my eyes when a seller says "Well, on Zillow..." They may be okay for a cookie cutter tract home with average ammenities, they're just throwing numbers at the wall.

My own home didn't even exist on Zillow until last year! And by the way, it was built in 1990- you'd think they had their records up to date before then. Another rental we own is consistently valued at 25 -30% over what it should be.

I had several offers where the lender told me their BPOs came way higher than the market value of the home. I kept assuming the bank was using either agents that are not familiar with Chicago area or new agents in the business.

I always have to send them my own CMAs and work with them to convince them which of the prices is closer to the real value.

This is some information!!!

APR

In the last month I've noticed that they are using a computer system to determine value, and have actually declined some short sales without the BPO. I guess we just have to roll with the punches.

APR

WOW Andy, I can hardly believe my eyes! I can't fathom the idea that Countrywide actually thinks Zillow is the best way to determine the market value of their pre-foreclosures... that's absolutely ludicrous!

APR

I had two short sales submitted and got denied by BofA the very next day as they thought the value should be X dollars. I asked how they got that number without a BPO and they said that they couldn't tell me. I am guessing Zillow.com now!

JUN

I guess we have to be prepared. Go on zillow and do an zestimate. This way you can hit the nail on the head when trying to get what the bpo came back at. You can tackle it in a different way.

SEP

Thanks for the tip. I'm starting the process on one now.....I better check ZILLOW.COM before I engage with the loss mitigator! lol

SEP

Judy you ask why a BPO and not an appraisal...my answer: penny wise, but pound foolish!

Zillow is zometimes close, zometimes far off the mark...and zometimes just DEAD WRONG.

It sure doesn't make things easier, though.

OCT

I knew it!! This makes perfect sense if you've done any Countrywide/BOA short sales! I have attempted about 10 over the past year and a half, and only 2 have closed. The others were flat rejected before they would even look at the file to review a repair estimate or any other pertinate documentation, much less order a BPO to see a more accurate view. RIDICULOUS!

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