Zhat Zood Zis Zit, Zreally?

By
Real Estate Agent with RE/MAX Top Properties

Lyn Sims wrote an interesting blog the other day about an email she recieved from Zillow that I HIGHLY recommend you check out. I had a comment for her and a bunch more to say/ question but didn't want to highjack her blogged thoughts taking them in a direction of my own.

A little background for those readers that don't know- zillow.com is a real estate community in which home sellers (both real estate brokers and owners) can advertise their homes. I've been a member for a while and have my listings posted there.

Recently a client of mine mentioned that he'd be attempting to sell his home in a year or so and that Zillow's Zestimate (yes, everything's with a Z) had told him it was worth x amount of dollars. I warned him not to put too much stock in that as a house in my area of Diamond, IL was 'zestimated' at $230,000 and worth maybe $180,000 about a year ago (that's 28% and 50 grand high for the record).  

The Zestimates are pretty horrible. Staying away from specific houses- here are the numbers touted for accuracy in the Chicago-Naperville-Joliet, IL region (and a chart for all major metropolitan areas): 30% are within 5% of the Zestimate, 52% are within 10%, of the Zestimate and 77% are within 20% of the Zestimate. You'll find those stats are very similar in the other areas as well...

Those are good?

If I listed homes and sold fewer than 1 out of every 3 within 5% of list price, I'd be ashamed of myself....If I could only get half sold within 10% of list price- I'd be out of a job!!! And don't get me started on 1 out of every 5 houses being 20% off----come on.

So I ask, What good is it (OR Zhat Zood Zis Zit to be more appropriate)?

In zillow's defense, there are areas on the site which tell you where to get more accurate portrayals of a house's value and that zestimates are a starting point....but that begs my REAL question.....WHY EVEN OFFER A ZESTIMATE? Most of them are very inacurate and cause REALTORS agony in having to explain why they are so off...so what's the benefit of even having it? The non-REALTOR users of the site don't like them either. Check the zestimate section of their discussion boards and you'll find these topic starters (JUST from today):

**My home at 632 Macadamia, 92870 has a Zestimate of $547K while the EXACT SAME MODEL 3 doors away (1507 Victoria, 92870) has a Zestimate of $711K!  There is no difference in the condition of the two properties (actually, mine probably has mre upgrades). Some differences are understandable, but that negates the credibility of Zillow.  I'm not sure what the problem is, but your assistance in correcting my Zestimate will be greatly appreciated.**

**The price you list our home for on here is too low.  Not as nice homes as ours are listed on your site higher.**

**My place is a top floor condo with wiews, totally remodel by an architect. A real gem. Zillow Zestimate is $673/sq. ft. while other comps are an average of $940 per sq. ft. Just wandering how Zillow determinated it for my place considering that none from Zillow visit it. This blind way to Zestimate has the risk of pricing a Ferrari car the same than a Fiat.**

**am the owner of 270 Lafayette Street, Unit 2 in Salem, MA  01970.  Our Zillow Zestimate shows our purchase price from 2005, but does not include it in the Zestimate.  The explination for why it's not included is rather vague and this was your normal run-of-the-mill real estate transaction.  We are currently selling our place and I want to ensure prospective buyers get the most accurate information possible.

Please explain! THIS ONE CAME WITH ANOTHER USERS RESPONSE OF:

**Hey same for me.   Zillow will do nothing to fix mistakes,   in a week or so a staffer might just grace you with a stock response.   (thank god for cut and paste )**

This all boils down to one point. If you must use it, use Zillow for what it's good with, finding properties...but leave the valuation of your home to the professionals!

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Jim Ludes is a REALTOR with Century 21 Coleman-Hornsby in Grundy and Will County, IL. If you have a question about real estate that he might be able to help with, email him at Jim@JimLudes.com or call/text at 815-712-7786. If you'd rather observe from afar or become friends first, check him out at:

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The Ninety-ninth Percentile
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Anonymous
Joseph Ferrara.sellsius

re: Zillow error rates

How does one know whether the zestimate on a "specific" house is in the 5%, 20% or 50% error group?

You can't tell UNLESS.....

You ALREADY know the value.

So, zestimates are useless as to specific homes.

Hire a pro who knows the market, the home and the "unzillowables".

http://tinyurl.com/26vx5z

 

Jun 09, 2008 03:13 AM #1
Rainer
11,519
Drew Meyers
Geek Estate - Seattle, WA
Drew Meyers

Drew from Zillow here. Please see my comment over on Jim's other blog.

Joe-

We agree on one thing -- as you know, Zillow recommends consulting a local real estate professional for a more accurate home valuation before making a financial decision. A Zestimate is a starting point -- not something that takes the place of a CMA or appraisal. I'm sure you've read this page before, but anyone that has not can read more about zestimate here :)

Jun 09, 2008 04:27 PM #2
Rainer
46,117
Greg Zaccagni
The Federal Savings Bank - Wheaton, IL
Illinois Mortgage Lender

It's also frustrating for mortgage lenders because the rates, terms & eligibility for a program can change dramatically with these variances.

www.MortgageAdvisor.info

 

Jun 26, 2008 12:54 AM #3
Rainmaker
1,504,355
Lyn Sims
RE/MAX Suburban - Schaumburg, IL
Schaumburg IL Real Estate

Jim & Joe Ferrara@sellsius:  I would have welcomed any comments from you both on my Zillow post.  Your numbers and calculations would have gladly been appreciated and ADDED to the debate.  I find their numbers totally ridiculous and as all Zillow coordinators love to point out - 'consult a real estate professional'.  I'm sure when they are selling the advertising on their site, they leave that disclaimer out.  I welcome a future zzzesty debate with these bozzzzzos, hope you will join me.  I liked the 'germanesque' accent.  In my mind I was picturing Colonel Klink.

Jun 29, 2008 07:50 AM #4
Rainmaker
245,358
April Hayden-Munson
Brookfield, WI
Brookfield Wisconsin Real Estate

Jim - Nice post/both blogs --- I think the public will get frustrated with Zilloooowww - One can only hope they'll look at an appropriate source for their home's value - a real estate professional

Jun 29, 2008 08:41 AM #5
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Jim Ludes

Grundy/Will County, IL REALTOR
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