I just read an Inman article titled, "How to Explain a Zestimate to Your Client". Many agents/brokers in real estate feel that Zillow and it's "Zestimates" are the bane of the industry. I've got to say that these so called estimates can present a huge challenge to real estate professionals because of the mindset that they implant in to our clients.
The article focuses on Sellers and how they will see a Zestimate on their home and automatically come away with "Well, that's got to be the value of my home". Ugh, no Mr. Seller. Not only is it possible that it's not the value of your home, in many cases it's not even in the same stratosphere of where your list price should be. Zillow says that we should explain to our sellers that there is a 20% +/- range of accuracy and I've seen instances where the Zestimate isn't even in that range. Naturally, we should be armed with a Market Analysis that we can show to the Seller- that's a given.
Zillow also suggests that we need to explain how the longer a property is on the market- the lower the offers will come in....blah, blah, blah. Sellers are so used to agents telling them that they you can almost see them physically shut down when those words begin leaving your mouth. It's true and I don't care how good you are at explaining- they don't want to hear it.
The last suggestion made by Zillow is to get the seller to agree to automatic price reductions. This may/may not work depending on how receptive the seller is. At the very least, you'll need to mention to them that you'll list it at the higher price (even though you've shown them why that's not a good idea) and try to get it sold in that range. If you're not seeing an offer within the first couple of weeks, depending on the market, then we'll need to revisit the list price and reduce as necessary.
What this article doesn't address is the flip side of Zillow's attempt to make our lives a little more difficult. That's how these "values" affect our Buyers. We've all seen it- the Zestimate that shows a home with a lower value than what recent comps will support. Do you think any amount of talking to that buyer is going to convince him/her that they should offer more than the Zestimate? Let me answer that for you- NO.
So, I for one, am going to have handy Zillow's fine print on the accuracy of their Zestimates so that at the very least, I can show it to a Buyer and Seller the next time that I'm challenged with it. One more thing in my arsenal....