My neighbor approached me the other day and remarked, "Did you notice what zillow said about us?"
I wasn't aware he was on speaking terms with Zillow... or that my name had somehow been brought up in conversation... so I played along, "No... what's Zillow been saying?"
"Zillow says your house is worth $41k less ever since the bank accepted the offer on that corner house. They say my house is worth $38k less."
OK.
I don't really have a bone to pick with Zillow... but my neighbor is not too happy with them right now.
Knowing I'm an agent, my neighbor wanted my opinion. These are the things I shared:
- It's difficult to know exactly what any home is worth right now. In some neighborhoods there are so many bank owned properties that the "new retail" value is the price of the latest sold property... even if it's bank owned.
- Zillow provides an approximation of value. They aren't as accurate as a licensed appraiser who will be able to take into account all factors. Sometimes their figures are high... sometimes they are low. Often they won't have some essential information, such as how many beds and baths a home has. However, they are a pretty good gage for a "ball park" figure. They aren't pulling prices out of thin air... they have a methodology and a formula- but a consumer will want "someone in the business" to give them richer information to help judge values.
- The values are never written in stone. They change each day... especially as new data arrives. Every sale changes the comparisons.
Has Zillow been talking about you? What do you have to say about them?
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Chuck Willman is an Arizona based real estate agent. www.AZvest.com
Hi, Chuck. Zillow has been a particular thorn in my side for some time now. They have no clue. They are a web-based appraisal tool that does not take the local economy or neighborhoods into account. They started very broadly-based and still, while they get press, do not have any idea of what is happening. First they didn't take ban-owneds into account and now their parameters make no sense at all.. Hopefully they will go away........VERY SOON.
I don't know if Zillow is going to go away, but it is really off in Flagstaff. Perhaps because we don't have mass subdivisions with many houses of the same size and floor plan.
Hey Chuck... good or bad, blessing or curse, right or wrong, I think Zillow is here to stay. I know that more than one lender uses Zestimates for obtaining a ballpark ideaof a given property's value. A large brokerage firm (Keller Williams maybe?) recently added Zestimates to their national site. Zillow has become a household name in a very short time frame, and I don't think that would have happened if Zillow was totally full of crap. So... any agent/broker can fight them all they want, but I personally think the response you gave to your neighbor (second bullet) was right on. In fact, that's VERY close to what I tell my clients about them. Nice post!
Hi Chuck,
You have a great attitude and your understanding & explanation of Zillow is perfect! You're right; it is an extremely difficult market in which to price homes - especially ones that sell. And our estimate accuracy is also certainly challenged by the scarcity lack of sales records. Please let your neighbor know that our algorithms actually exclude foreclosures and bank-owned transactions. The bank sale on the corner is not to blame for the reduction in our estimates. That may not be good news.
You are also correct that in many markets, you unfortunately won't sell unless you price your home to beat the competition and that does unfortunately include the bank-owned home on the corner. I can't wait till this is over. Thanks for not shooting the messenger! ;-)
Suzanne,
In January, Zillow had it's biggest month ever with 7,5 million unique visitors. Our site has expanded way beyond Zestimates. Did you know, for instance, that your buyers can now get custom anonymous mortgage quotes in minutes from thousands of reviewed lenders on Zillow? Our lenders have quoted borrowers more than a million times in less than a year since Zillow Mortgage Marketplace launched. And did you know that your listing information can actually correct your seller's Zestimate if their public records are incomplete or incorrect? I think that if you take Chuck's approach and have an open mind to Zillow, you may find some of the value there that your clients do. Please take another look.
Randy - thanks! Nice, thoughtful comment! Chuck's response was right-on.
FYI - the previous comment was also mine. Didn't see I wasn't logged in!
Suzanne- For them to go away they'd have to figure out a way to alienate their 5 million+ monthly visitors. I'm pretty sure they're here to stay. I don't expect them to be 100% reliable... how could they be? The data requirement is absolutely huge- and those who know their neighborhoods will continue to be a more valuable asset. I don't see them as a threat- they're just one more service seeking to prove themselves relevant.
Ann- I suspect that your assessment is quite accurate. In the absence of information, it becomes more difficult to provide reliable data. Where there's more activity the numbers become a bit more real.
Randy- I think you summed up my personal opinion pretty succinctly.
David- Thanks for visiting. I appreciate opinions from all sides... consumers, corporations, competition, etc. I've been following Zillow ever since I saw pre-launch press. I think your organization has succeeded in many regards and has found room to improve in other areas. I guess my advice is to keep the emphasis on the accuracy. This market rewards those who prove to be most reliable... we certainly have had a lack of accurate information from many sources in the past couple years... so, to the extent that your data proves itself you'll probably find converts among the fence sitters.
Be aware that if you update data on Zillow in order to get a higher zestimate, you may unwittingly raise your property taxes. Even founder Rich Barton did not update his data until he put his home on the market.
http://cli.gs/U0ApGM
Seattlepi.com post on the subject: http://seattlepi.nwsource.com/business/285883_zillow21.html
With real estate prices dropping or unknown, agents & Zillow are not able to give an accurate price on property. Its here to stay & its saves time for people.
JF- I think many have noticed that if you "correct" the zillow data by providing more accurate information- such as number of bedrooms- the value of the home may go down. This process could be to your benefit from a property tax standpoint but most home owners don't want that sort of accuracy if they plan on listing. It's one of those silly things... we can't have it both ways.
Derrick- I agree. The information is quick and there is reasoning behind it. Any valuation can be disputed. And... every valuation changes as new listings go on the market and existing listings sell... so- this is just one more service to provide a "snapshot" of one moment in time.
I checked my house on Zillow just last week. I was pleasantly surprised that it went UP in value compared to what they said it was worth last summer.
Heck, I've seen appraisers differ on values by many, many thousands, what can I expect of this Mr.Zillow, an automated system? Ballpark, Mr. Zillow has had a good track record, but lately, with the Real Estate "deep plummet", even Mr. Zillow has had a hard time ascertaining correct value...
Top of the board on the Optimist Group. Let's see what the other members have to say about it!
Zillow says our home is worth $260,000some. Ain't no way it is going to get that price in my town in this market. If someone offered me $250,000 I'd take it in a hurry. Zillow has never been very accurate here.
At least your neighbor knows to talk to you about his home value, for the real expert opinion. Zillow is good for starting a dialog.
Chuck - informing you (after the fact, oops) your post on zillow talking has been reblogged - inspired by marti garaughty and February's " Link Love" Challenge. Cheers to a Happy Valentine's Day to you and your beautiful family!
Chuck, it's funny that Zillow is so popular, but at the same time I constantly read complaints from homeowners and how the value on their home on Zillow should be higher. I tend to agree with you, as well as Mirela. I have had appraisers on a townhome, during the same period of time, have a difference of value on a $170k property of tens of thousands of dollars. One appraiser valued it at $170k, and the other appraiser valued it at $190k. Zillow is the same way, just a measuring tool. With the way the market is right now, it is very difficult to determine value. Some neighborhoods are actually increasing in value while other subdivisions have dropped 40-50% in value since last year. You just have to take each transaction as it's own thing.
I receive calls everyday from friends and neighbors with comments like this. So many, It should be my blog for the day.
I will have to check my price on Zillow.