What about those Zestimates? A tale of one listing, two Zestimates

By
Real Estate Agent with Island Sotheby's International Realty R(S): 56519

What about those Zestimates?  Enter: Same Day, Same Listings, Two Feeds, Two Zestimates

When about to sit open house for a listing last week, my client asked me to advertise the open house on Zillow. Unlike primary home markets where buyers often look on Saturdays and Sundays, here, we find that most vacation properties are often only available between guest check out and check in, and it can be any day of the week.  Open Houses can be hard to find, as the resorts don't allow signage.

While looking through Zillow together, my clients and I noticed that all of my listings are syndicated twice.  While I'm not sure why this is, I am guessing that the listings are being fed through my brokerage firm's network of sites and our MLS.  We checked the Zestimates and popularity of their listing and they were shocked by the difference: Zestimate 1: $1,293,865
Zestimate 2: $1,774,332

This is a whopping $480,467 and 45% difference in value for the SAME property on the SAME day at the SAME time. So how accurate can these Zestimates be?  

Same Day Zestimate on a Resort Condo

Photo above is a Side by Side Comparison: Same Listing, Same Day, Same Time, Different Zillow Feed.  Different Zestimate.

I checked listings in different resort complexes and found the following when comparing the Zestimates two listing feeds.  Note: Rank is amongst 20 comparable listings and % Change is the change in the Zestimate over the last 30 days.

Listing List Price Feed 1 Feed 2 % Change
Feed 2 vs. 1
Feed 1
Rank

Feed 2
Rank

Feed 1
% Change 
Feed 2
% Change

Golf 24T1

 $789,000 $770,196  $1,003,815  30%     14 1  -0.03%  +0.50%

Golf 23V3

$929,000 $965,285  $944,976  2%  5  1  -300%  NA
Ridge 1513 $1,225,000 $1,293,865  $1,774,332 45%  18  5  -3.40%  +1.20%
 Bay 19G5 $1,079,000 $1,112,699  $1,068,485  -1%  6  8  -0.50%  -0.80%
 Alii 4-1002 $2,298,000 $2,224,102 $2,104,325 -8%  1  13  +2.90%  -0.40%


Fortunately, my clients had a wonderful sense of humor, and took the 45% difference in valuation in stride. We'd gone over the comparables and market at length, and review it periodically.  They feel they are priced fairly for the current market conditions and given that their villa is in the original condition as built (1980).  

The current market for a 2 Bedroom at their Condominium Community is as follows there:

Active Listings: 6
Price Ranges: $1,225,000 to $1,825,000
Sales Since 2015: 4
Sales Price Ranges: $1,050,000 to $1,480,000

It should be noted that the highest sale on record at this complex was $1,700,000, well below the second Zestimate, in 2005 for an updated villa with more square footage and a more panoramic ocean view.

So How Accurate Can these Zestimates Be?

When receiving calls from Zillow to advertise, I have explained to their sales team that I don't want to advertise as Premier Agent because of the inaccuracies of the Zestimates in my niche market.  To my knowledge the Zestimate algorithm is not taking into account view, location, or interior condition, all of which have a large impact on value.  

The response has been that this inaccuracy provides an opportunity for me to establish myself as a market expert and to give the consumer the correct information.   Providing market information to my clients is a part of my fiduciary responsibility, and I take it seriously.  I do have trouble however, trying to understand why I need to pay to correct information that is not accurate.

I hadn't spent much time on Zillow, as it's busy enough working with buyers and sellers in our market and I try to prioritize my focus on those tasks that need immediate attention.

So, I'm asking the Active Rain Professional Community, What Would You Do? How do you explain Zestimates and your market conditions to Clients, both Buyers and Sellers?

It seems it would be a disservice to a listing to not have listings syndicate to the Zillow site as it does provide exposure and is such a largely trafficked site.  However, at the same time, it seems to be a disservice to have the information vary so wildly from the current market conditions.

 

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Rainmaker
413,580
Lynnea Miller
Bend Premier Real Estate - Bend, OR
Premier Real Estate Service in Central Oregon

Hi Courtney Brown, Realtor (S) Vice President !  We are always working to overcome the unrealistic Zestimates. We do this by showing a true CMA which works via a comparison with comparable properties and not a radius algorithm. Sellers want their properties on Zillow, which we do. But we have to show through true professional analysis that the pricing showed on Zillow is not based on real market value. RPR is a great tool for this. Nice to see you posting in Active Rain!

Jun 20, 2017 09:43 PM #1
Rainmaker
1,554,099
Sandy Padula and Norm Padula, JD, GRI
HomeSmart Realty West & Geneva Financial, Llc. - Carlsbad, CA
Presence, Persistence & Perseverance

All I can respond with, Courtney Brown, Realtor (S) Vice President is "Been there, Done That!" I have had numerous heated conversations with Z and fought with them about their inaccuracies on their Zestimates to no avail. My action has been to avoid direct marketing on Z, but they still seem to capture my listings and I have to demand they remove them from their site. The most recent, their estimate was low 22% , we still sold the home form nearly our list price. Hello Zillow; Are you reading this? Hope you lose the class action suit against you!

Jun 21, 2017 04:12 AM #2
Rainmaker
1,403,310
Jeffrey DiMuria 321.223.6253 Waves Realty
Waves Realty - Melbourne, FL
Florida Space Coast Homes

Courtney...Zillow is truly worthless. You have done a great job of breaking it down...but truth is many of our buyers and sellers believe them because they seem (at first sight) to be unbiased. Great post...you have got it going on here!!!

Jun 21, 2017 08:17 AM #3
Rainer
1,125
Kim Railey
Self-Employed - Dongola, IL

Great post! Thanks for gotting deep into this important topic. You did really good job of breaking zillow down. Keep going and people will keep their ears open.  Take a look at my work on NoNeedtoStudy.com if you don't mind. Take care!

 

Jul 19, 2017 03:33 AM #4
Rainmaker
1,499,587
Inna Ivchenko
Barcode Properties - Encino, CA
Realtor® • Green • GRI • HAFA • PSC Calabasas CA

Information from the sites like Z. is based on a limited set of facts about a house, such as square footage an number of rooms. However, those AVMs may miss important factors, like  a desirable school district, view, noisy street exposure, privacy, etc. You have to compare the subject property to identical or similar and make all proper adjustments since rarely properties are the same( condition, location, layout, sqft, etc.)

Nov 04, 2017 10:58 PM #5
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Rainmaker
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Courtney Brown, Realtor (S) Vice President

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