When I asked a buyer how they were coming up with the numbers when they made offers on the last three houses they liked and lost, the answer astounded me. In each case, the offer had no relation whatsoever to the listing price and seemed to make no sense at all. It wasn't as if any of them were within $10,000 of the asking price, or $5,000, or anything else that might have given me a clue. They looked at me, wide eyed and said they based it on Zillow's Zestimate.
It took me back to my days at Sotheby's. Whenever there was a major auction, the press was there in full force. All the major news services were represented, some reporting on the spot coverage, others writing their articles, yet to be printed. One evening, during a very important and well attended auction, people were spread out in three rooms to accommodate the huge numbers. I watched and listened as one reporter made a statement live that was absolutely untrue. It was a mistake, to be sure, but it was broadcast on a major network on television, thereby giving it credibility. I would have been hard pressed to convince anyone who heard the report that the information was wrong.
It is the same, I'm afraid, with sites like Zillow. Because it has authority status by sheer numbers of visitors alone, people believe what they find there, right or wrong. I can't tell you the number of times I have to caution both buyers and sellers to take the data they find with a grain of salt. Sellers are often expecting inflated numbers based upon an erroneous Zestimate, seemingly in their favor, while buyers sometimes have to lose a few properties before they let go of their instinct to follow the numbers they see. As for the couple in this story, they finally got it, and their next appropriately priced offer bought them a house they loved.