As more and more Buyers and Sellers use the interenet to research their decision to buy or sell property, online sites are claiming to provide useable statistics for consumers.
My gripe is with Zillow which provides Zestimates for properties.
The "Zestimate" is "Zillow's estimated market value computed using a propretary formula".
I have recently found that an increasing number of Zillow's estimates are way off the mark: I had one Seller show me the Zestimate for his property which was over 20% above the realistic market price for his home; and another property's Zestimate was 20% under the realistic market price of that house.
So I checked my own home and found Zillow's Zestimate was a whopping 56% higher than a realistic selling price in the current market.
I'm tempted to offer my home to Zillow at a small discount to their Zestimate.
As long as computers rely on Humans to "think" there will never be an accurate measurement of home values without that human input,. I don't care how advanced the algorithms are on Zillow or any other site that tries to put a value on something they have not personally inspected.
John - I totally agree with you. Computers will never replace Realtors.
They are ceratinly useful for consumers but they cannot replace a "personal inspection".
I go to aillow often and there comps are not reliable..but it gives you an idea of the values...
In my experience Zillow's values are off the mark and are unreliable and poses a problem for us Realtors when working with both buyers and sellers. I agree with the above comments these websites can not replace a personal inspection by an experienced Realtor and only true mls comps should be used.
Lynne / Michael / Hope - Thanks for your comments. It appears we have a consensus.
If only clients would realize they cannot rely on these "automated" values.
I totally agree. Great post.
Stewart - When my clients refer to their "Zillow says dollar value" I tell them that's for the dirt and the box. Zillow has no idea of what's in the box. The Zillow number is based on tax records and recent sales, and until they walk the property and see the inside there is no way they can produce anything other than a guesstimate.
Kenneth - THE Kenneth Cole? :) (I'm sure you're asked that daily)
Norma - You've summed it up perfectly:
They should change the name from Zestimate to Guesstimate.
The Zestimates takea lagging viewpoint and don't take into account the individual condition/location of target homes. If housing were truly homogeneous, this would be a good concept, but it isn't.
Zillow uses public data to arrive at values. In Texas most sold data is private so the system is even more fractured here. You are also on the money about computers and formulas EVER taking the place of a professional realtor.
Thanks -RL
Zillo is a total ZIP! A buyer we had recently was off by more than 60K on a 180K neighborhood. Zillo kept pulling from cheaper homes and condos nearby.
Jim - Did your Buyer accept the facts after you explained them to him?
Hi Stewart: I can't believe that we as Realtors don't have something for consumers that is more accurate to keep them coming to us.
All the best!
A Zestimte is a starting point, and not a replacement for a CMA or appraisal. For background, all of Zillow's Zestimate accuracy statistics on a county by county basis can be found here.
Stewart, I tempted to do the same thing, if the Zestimate for our house were correct, we would sell it.
If a buyer is citing a zestimate, that's nothing more than a negotiation tactic. I'd recommend explaining to them the difference between a zestimate and a cma and back up your argument with real comps for your home. There are likely other factors at play if you are not selling your home -- the pricing and the photography being the two most important things to selling a home (particularly in a buyer's market).
I agree, it's pretty much always off, you need a real person to do REAL comps! I always tell my clients there is a reason it's called REAL ESTATE, no one will buy VIRTA STATE and they should not buy or sell based on a virtual person's estimate on their homes's value.
I have heard a lot of people complain about this. What a mess! I love the comment by anna - it's not virta state! I know a lot of the problems come from foreclosure properties - which is why I usually refer people to Property Maps - www.propertymaps.com - because this site is easier to use - with a google maps/mls tool and says right next to the price what status the home is in. I hope it can help!
Stewart, I am SO surprised that Zillow hasn't paid this a visit with a comment or two. Must be slow for them or they are out making up their numbers again! Have done some serious research in my own area of Northwest Suburbs of Chicago where they are notoriously inaccurate. They honestly say that they can be off from 5 to 30% and have a quick phrase saying that "it isn't ever meant to replace an individual realtor giving market data". Well neither is a Ouija Board I guess! The public just doesn't get it yet and from posts like yours, hopefully they will soon. The Zestimates are just totally irresponsible to the consumer. It's pulling numbers out of a hat.
Stewart, It's kind of fun to monitor these Zillow figures before and after closings. Have seen low estimates that closed for $10,000 more, and have seen high estimates that closed for $10,000 less. Keep enough of these on a list and we can show them to anyone using Zillow as a reference.
Stewart, You are preaching to the choir! I tell my buyers to ignore zillow because their information is almost always inaccurate. I use my house as an example. I know what I paid for it, how much it was appraised for when we refinanced last year and then I show them what zillow says. Case closed!
I think most realtors would agree that the Zillow estimates are pretty silly - while I applaud them for trying to provide a useful service to consumers, it's up to us realtors to provide the true data which we can and do. To me, it's an equivalent of a product sold on TV - looks good on the screen, but underperforms in real time.
Stewart,
Good post and very thought provoking. I think I will blog about the my guess at the future of sites like Zillow. Think Wikipedia?