FAQ #7 - Why Can't I Offer the price I see on Zillow?

FAQ: Why can't I offer the price I see on Zillow?

Zillow is a site that can be a lot of fun, but the price "Zestimates" are simply estimates, based on public records NOT on first-hand knowledge. Their algorithms can't factor in neighborhood conditions, amount of interior upgrading/remodeling (or not!) and a host of other factors, especially how competitive and fast-moving the real estate market might be in a specific area. If you want to buy a home, you need the advice of a real estate agent knowledgeable in the area or you're likely to be left in the cold. Take a look at some of these examples, and then you decide:

2812 Monterey, San Mateo CASales Price: $1,000,000
1925 Belmont AvenueSales Price: $1,207,000
122 HillcrestSales Price: $  825,000
368 Lakeview WaySales Price: $1,177,400
97 Hilltop DriveSales Price: $1,162,800

--- Come for a visit; Stay for a lifetime!

Lottie Kendall, Realtor®

Today | Sotheby's International Realty

San Carlos, California, 94070

CA BRE#01215160; 650-465-4547

Lottie@LottieKendall.com;

www.LottieKendall.com

www.SFCondosForMe.com

 

 

Comment balloon 38 commentsLottie Kendall • May 30 2012 09:23AM

Comments

Wow, Lottie.  This is a great way to show proof positive that Zillow's estimates are definitely not something to be taken seriously. 

Posted by Jane Peters, Connecting you to the L.A. real estate market (Home Jane Realty) over 5 years ago

Great post Lottie.  Zillow's "zestimates" are pretty much a joke as you pointed out so well.  

Posted by Jim Patton, Realtor - Stanislaus & Merced county Realtor. (Century 21 M&M - 209-404-0816) over 5 years ago

I find Zillow estimates to be so far out in left field.  I think Street Easy is a lot more reliable with their figures and inventory postings

Posted by Jennifer Chiongbian, Real Estate Broker - NYC (Specializing in all types of Manhattan apts & townhouses) over 5 years ago

I have reviewed ( for my MLS ) a series of AVMs and none are worth 2 cents. 

 

Posted by Lenn Harley, Real Estate Broker - Virginia & Maryland (Lenn Harley, Homefinders.com, MD & VA Homes and Real Estate) over 5 years ago

Since many feel this way, it's up to each of us to ask our fellow Realtors to stop supporting these 3rd party companies.

Posted by Andrew Martin (REMAX Accord) over 5 years ago

Definitely a good objection handler to know how to approach.  Here in manhattan zillow pricing is all over the place.

Posted by Morgan Evans, LICENSED REAL ESTATE SALESPERSON (Douglas Elliman Real Estate) over 5 years ago

Lottie, as you've said, zillow's Zestimates aren't anything more than a "ballpark" estimate, and that's even a stretch.

Posted by Eric Michael, Metro Detroit Real Estate Professional 734.564.1519 (Remerica Integrity, Realtors®, Northville, MI) over 5 years ago

I love it - thanks for doing that research and sharing.  Zestimates are definitely causing problems. 

Posted by Joy Daniels (Joy Daniels Real Estate Group, Ltd.) over 5 years ago

Lottie -- Your examples speak louder than words. Excellent post to help buyers understand that Zillow is NOT what they should use as their offer barometer.

Posted by Barbara Altieri, REALTOR-Fairfield County CT Homes/Condos For Sale (RealtyQuest, Fairfield and New Haven County CT Real Estate) over 5 years ago

Lottie, way to go - I will use this post to explain both buyers and sellers - that Zestimste is just  another number..

Posted by Praful Thakkar, Andover, MA: Andover Luxury Homes For Sale (eXp Realty) over 5 years ago

Lottie,  

You've taken the time to show how someone should not just offer the zestimae on Zillow.  I love the fact that you had the exact numbers and had captured the screen image of the Zillow estimate.  

Posted by Judi K Barrett, BA, Integrity Real Estate Services -IDABEL OK (Judi Barrett~Integrity Real Estate Services~Idabel, Oklahoma) over 5 years ago

I like zillow, but I don't like the zestimates.. I just wish they would drop them.  lots of great things otherwise!

Posted by Joan Whitebook, Consumer Focused Real Estate Services (BHG The Masiello Group) over 5 years ago

The estimates are there for one reason:  to get traffic numbers.

Same reason that there are Celebrity home articles, Top 10 home stories, etc.

And its the same reason why they display PVA information about properties that aren't even on the market.

 

Its all a means of getting their traffic numbers as big as they possibly can....so they can then try to do the hard sell to Realtors about "get your properties listed on Zillow" and "Get your featured advertising" ASAP  - under the guise of having RELEVANT traffic numbers (read: home Buyers), that clearly isn't there under most circumstances.

Posted by Jon Karlen, Louisville & Shelbyville Kentucky real estate (Finish Line Realty - Shelbyville & Louisville Ky Real Estate) over 5 years ago

Lottie

GReat exanmples of where Zillow simply does not cur the mustard. I see examples on the other side, though, too, but more rarely. Bottom line - you need the advice of a knowledgeable REALTOR and a close look at recent sales, not some algorithm that seems to have more innaccuracies than not. But it's important to know what ZIllow says, as bother buyer and listing agent since it will likely come up as an issue.

Jeff

Posted by Jeff Dowler, The Southern California Relocation Dude - Carlsbad (Solutions Real Estate ) over 5 years ago

I love your examples, and how many times do we face clients who quote the "Zestimate" as the honest-to-goodness truth because it was on the Internet.   

Posted by Francine Viola, Realtor, In Tune with your Real Estate Needs (Coldwell Banker Evergreen Olympic Realty, Olympia WA) over 5 years ago

I'm not really sure how anyone can come up with a value these days.  Short sales, distress sales, foreclosure sales, regular sales, tax sales, listings, pending sales all are considered when making an appraisal.  Add in the liability when you're wrong and it makes being an appraiser a difficult job.

Posted by Doug Bullwinkel, NMLS #281609 (Academy Mortgage Group) over 5 years ago

I agree! Especially here in San Francisco where within the city we have micro-markets and many different factors that conrtibute to what would indicate a higher or lower sale price. A home on one side of the block could have great views and a wonderful yard, but you go a hafl block down and you have the muni line that runs behind the house and no view. Same block, same style home but much different values.

 

Thank you for the way you compared the Zillow values to the actual sale price! Great post and keep them coming! 

 

Cheers!

George Langford

Posted by George Langford, Realtor - Zephyr Real Estate (Zephyr Real Estate - Noe Valley) over 5 years ago

Unfortunately, many of the on-line third party real estate estimators are comprised of algorithms and voodoo magic:-(

Posted by Myrl Jeffcoat, Greater Sacramento Real Estate Agent (GreatWest Realty) over 5 years ago

Zillow is a joke.  Everytime I have a buyer tell me they were looking at that site, I tell them to RUN the other way.              

Posted by Amanda Christiansen, Christiansen Group Realty (Christiansen Group Realty (260)704-0843) over 5 years ago

Interesting examples. I see the sales prices was always higher. I am certain the reverse can be found as well.

Posted by Gary L. Waters, Broker Owner, Waters Realty of Brevard, LLC, ... a small office, delivering big service! (Waters Realty of Brevard, LLC) over 5 years ago

Lottie, a perfect example where the Zillow Zestimates are no more than guestimates of value. Market value can only be determined by good comps.

Posted by Michael Setunsky, Your Commercial Real Estate Link to Northern VA over 5 years ago

Lottie, Thanks for the data showing how far off Zillow is. We have only ourselves to blame for this problem. If the MLS (which we own) was not giving away all our listing data for free, Zillow would not exist in it's current form. Then prospective buyers would have to go to broker or agent websites in the area they are interested in moving to.

Posted by Wayne Jackson, North Idaho Realtor, Serving Coeur dnullAlene and Hayden Lake (Lakeshore Realty 208-714-4109) over 5 years ago

Hi Lottie,

That is brilliant!

It is clear that your market has taken off and the algorythms have not caught up.

Phil

Posted by Phil Leng, Phil Leng - Retired (Retired) over 5 years ago

EXCELLENT way to refute Zestimates... I love it! This may be a step that gets added to my arsenal for situations when buyers are hung up on the Zestimate of a property.  By the way, sometimes the Zestimate is higher, MUCH higher, than the sale price, so it's important to show those, as well.  They still help make the point that Zestimates are not necessarily an accurate reflection of market value.

Posted by Margaret Woda, Maryland Real Estate & Military Relocation (Long & Foster Real Estate, Inc.) over 5 years ago

Jane - sometimes a picture really is worth a thousand words

Jim - in your area too, huh?

Jennifer - I don't know Street Easy. Maybe you could enlighten me?

Lenn - I bet that was an interesting study

Andrew - some brokerages have pulled away from sending their listings out to 3rd parties

 

Posted by Lottie Kendall, Serving San Mateo County and San Francisco (Today | Sotheby's International Realty) over 5 years ago

Morgan - here too

Eric - and it's our job to help buyers and sellers realize that

Joy - you're welcome :)

Barbara - hopefully a picture really is worth a thousand words!

Praful - I hope it helps

Posted by Lottie Kendall, Serving San Mateo County and San Francisco (Today | Sotheby's International Realty) over 5 years ago

Judi - I've gotten in the habit of taking a screen shot when I take a listing.

Joan - maybe these examples will help you make that point to your clients.

Jon - it must be working, because lots of people check Zillow

Jeff - your bottom line is spot on!

Francine - I think we need to let people know that Zillow is a fun site, but not to take the Zestimates seriously

Posted by Lottie Kendall, Serving San Mateo County and San Francisco (Today | Sotheby's International Realty) over 5 years ago

Lottie,

Great post.  I have been seriously thinking of pulling my listings from any syndication sites like zillow.  I see no value that they provide us.  The info is stale, inaccurate, and they use it to get agents to advertise on their site.

Posted by Larry Gatti (The Gatti Group at Keller Williams Realty) over 5 years ago

Doug - an appraiser has a difficult job, to be sure. But a 'live' appraiser can at least factor in things an algorithm can't address.

Hello George - you've just described the problem beautifully!

Meryl - I don't know how they could be anything else.

Christiansens - I'm hoping this post will show my clients why they can't use Zestimates

Gary, I'm sure you're right. These are just my examples in our fast-moving real estate environment on the San Francisco peninsula. When I have first-hand examples of over-estimating, I'll post them, too.

Michael - too many intangibles go into a selling price for this type of valuation to be credible.

 

Posted by Lottie Kendall, Serving San Mateo County and San Francisco (Today | Sotheby's International Realty) over 5 years ago

Wayne - that's beginning to happen. A large firm in the San Diego area recently did just that

Phil - our area is, indeed, a strong market. These examples were from both 2011 and 2012.

Margaret - thanks for you kind words. I'm sure Zestimates can be higher than the sales price - real estate IS local, after all.

Larry - you're not the only one thinking along those lines.

 

Posted by Lottie Kendall, Serving San Mateo County and San Francisco (Today | Sotheby's International Realty) over 5 years ago

Lottie - I havn't checked out Zillow in a while but usually around here they have been way over.  Maybe things have changed since I last looked. 

Posted by Jim Patton, Realtor - Stanislaus & Merced county Realtor. (Century 21 M&M - 209-404-0816) over 5 years ago

Jim, I'd be interested in learning how the Zestimates are doing in your area. Real estate certainly is local!

Posted by Lottie Kendall, Serving San Mateo County and San Francisco (Today | Sotheby's International Realty) over 5 years ago

The problem is that Zillow.com completely ignores the fact that you simply can not estimate a propertys market value given the limited public information available, such as the age of the home, location, number of bedrooms or bathrooms, or square footage. Many factors such as whether it has been remodeled, the desirability of the floor plan, proximity to schools, street appeal, etc. have a huge impact on market value. Only an experienced real estate agent or appraiser, taking all factors into consideration, can provide a property owner with an accurate estimate of a propertys value. I have seen many instances where Zillow.coms valuations are 50% or more inaccurate, with many of their valuations appearing to be almost random. Zillow.com has not ever set foot in any of the property's they are providing an estimate of value, so how can they possibly represent that they have any idea what the property is worth?

For instance, Zillow.com values the home across the street from me at a price approx. 40% higher than my home, although it has approx. 22% less square footage, one less bedroom, a less desirable floor plan, a smaller yard, and no ocean view, which my home has, and although recently remodeled, my home has also been remodeled with a much larger new kitchen.  Zillow.com also has another home across the street from mine at a valuation at least 40% lower than its true market value, because zillow.com completely ignores the fact that it was recently completely remodeled inside and enlarged.

The business model of zillow.com simply can not provide accurate market value information, as the public information which it uses tends to lag the market, and most importantly, they are completely ignorant as to the unique qualities and details of each home that it appraises. Has it been remodeled?  Does the floorplan work well? Are the bedrooms too small? Are the bathrooms and kitchen well designed?  How large is the backyard and is it nicely landscaped?  Does the house enjoy good curb appeal and attractive and well maintained landscaping? How well maintained is the home, and does it have any issues such as mold, old roof, or other deferred maintenance?  All of these factors are important to evaluate in determining a propertys market value, and zillow.com simply can not do so.  Only an experience real estate agent or appraiser, taking into consideration all of a propertys unique characteristics can help a client estimate a propertys true market value.

I have actually been contacted by people who have used the listing information on my website and compared it to the valuations used by zillow.com to try and estimate whether a property is over or undervalued compared to its listing price. This is like playing russian roulette with a fully loaded pistol.

When I am working with a buyer or seller, I provide my clients with a Comparative Market Analysis that includes only those homes which through my years of experience I believe are directly comparable to the subject property I am evaluating, taking into consideration all of the factors affecting a property's market value. Many of the property's included in the Comparative Market Analysis I have personally visited while they were on the market, and I am able to truly evaluate all of the unique characteristics of each of the properties in order to come to a reasoned estimate of value of the subject property.

Anyone using zillow.com as fact, may as well be using a Ouija board. Another good web blog that discusses this issue about how Zillow.com is a fraud is
http://www.bloodhoundrealty.com/BloodhoundBlog/?p=134

Posted by Maureen Megowan, Palos Verdes Real Estate Blog (Remax Estate Properties - ) over 5 years ago

Don't get me started on Zillow! The Zestimates are almost as accurate as a monkey and a dart board!

Posted by Nancy Laswick, Your REALTOR® For The Valley Of The Sun (United Real Estate) over 5 years ago

Maureen, thanks for the link to the BloodhoundBlog - his pictures told a great story. I think this is the way we need to get the message across to people -- pictures.

Posted by Lottie Kendall, Serving San Mateo County and San Francisco (Today | Sotheby's International Realty) over 5 years ago

Nancy, all over the country Realtors® agree that Zestimates are of no use to people. Now it's up to us to get that message out to buyers and sellers.

Posted by Lottie Kendall, Serving San Mateo County and San Francisco (Today | Sotheby's International Realty) over 5 years ago

Exactly!  The best comment on this post is the monkey and dart board reference!  Thanks Nancy! Made my morning.

Posted by Rosemary Brooks, The Mother & Daughter Realty Team (BMC Real Estate - 209-910-3706) over 5 years ago

Hi Rosemary -- Nancy has a way with words, that's for sure. :)

 

Posted by Lottie Kendall, Serving San Mateo County and San Francisco (Today | Sotheby's International Realty) over 5 years ago

Participate