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Rick Obst's Blog

By Rick Obst | Real Estate Pro in Eugene, OR

Zillow's Zestimate Is Too Low! What Can We Do About It?


Part of my virtual assistant job is to communicate with my Realtor clients' sellers about our online marketing program for their home.

I'll write about the single property websites created, syndication to dozens of real estate websites, the frequency of postings to craigslist and other sites, number of page views, and include links to many of the sites where the property is listed.

Recently, a seller responded that the list price is substantially above the Zestimate on Zillow.  He asked if this would hurt the home's marketability on Zillow and if there was anything that could be done.

We can't change the Zestimate, but Zillow does offer a homeowner or agent opportunities to affect the Zestimate's calculations.  As Zillow writes:

Zestimate is a starting point in figuring out the true value of a house. For one thing, the amount of data we have affects the Zestimate accuracy. If your home facts are incorrect, you can update your facts, which may affect your Zestimate value. Also, we've never been to your house, never seen your expertise with colors and landscaping. So we've given you a way to consider them (and other things) in calculating a home's value.

Beyond this, the homeowner and agent can offer their own opinion of value and the justifications for a different value.  To learn more, go to http://www.zillow.com/wikipages/Create-Your-Own-Estimate/.  These opinions are made public on Zillow for all prospective buyers to see.

The agent and I were able to respond to the seller's worries by adding new facts about the property, its location, and unique features.  We explained why the property should be valued higher than the Zestimate.  The seller was pleased at our

Comments

By BeachBrokerBill,  Tue Dec 21 2010, 15:44
Zillow's estimates are irrelevant. Whether the seller is getting offers is the key and that is dependent on numerous factors, none of which have anything to do with Zillow. If you don't get offers, it isn't because of Zillow, it is because you have priced the house too high relative to the market. Zillow doesn't determine the market.
By Rick Obst,  Tue Dec 21 2010, 16:53
Bill, Zillow's estimates are irrelevant as long as people give them little credence. If buyers base their offer in part on a Zestimate it needs to be countered. A "low ball" offer means little to a seller. There is a lot of home inventory sitting on the market that is appropriately priced. Being able to justify the listed price is good and I'm explaining how Zillow allows homeowners and Realtors to do just that. Thanks for your comments!
By John Souerbry,  Wed Dec 22 2010, 06:13
Is Zillow a licensed appraiser? It certainly collects a lot of data, but the method of establishing value isn't transparent enough to say whether or not its estimates are valid. As a broker who negotiates based on desirability, not appraisals or CMAs, I don't allow Zillow estimates to become part of any discourse on a sale, regardless.
By Sean Farley,  Wed Dec 22 2010, 06:30
Agree on what is above, but we all know that Perception can become.......reality. Then it is our job to explain the nuances of a given market and section of a market. For ex.. My hometown of Waldwick NJ, is considered a starters to a mid-value market in Bergen County, NJ. It's values are drawn up as it is surrounded by high-end markets like Ridgewood, Wyckoff, HoHoKus, Saddle River, Allendale and Upper Saddle River. This is one of the many items the Zestimate does not reflect. As well, Waldwick is broken down into sections of desirability. One of these sections is the Crescent Section of town and is considered a more desired section as it has larger average lot sizes, sits on the Wyckoff and Allendale borders and the developments, for the most part, are younger in their build time period.
Again, these are factors the Zestimate does not take into affect. When presenting values to homeowners and/ or buyers, I simply tell them to take this Zestimate as a start point and with a grain of salt. The plus minus on these valuations can be quite off from what the property will sell for.
By Earl w/The ParkHouse Team,  Wed Jan 12 2011, 08:58
The simple way to handle the issue is have the house appraised by a licensed appraiser. Copy it and show it to people who come to look at the house. Publish it online if you want to. Remember, the appraised amount is all that a lender will make a loan for anhow.l
By Lyle Wolf,  Wed Jan 12 2011, 09:48
It is amazing to me that clients will reject a valid CMA done by a Realtor who has real local market knowledge and focus on a Zestimate which is a concocted number often from incomplete data (especially in New Jersey) that can be easily off by 20%. Just because Zillow publishes estimated prices on their Internet site does not mean they have any relevance to a home's actual value. Earl makes a good point. Will any lender give a mortgage on a Zestimate?
By Liane Jamason,  Sun Feb 13 2011, 06:54
While I generally like Zillow, I hate the Zestimate. Here in Tampa, it has a 14.6% margin of error (of course this is printed in tiny print way at the bottom of the Zestimate page). However buyers and sellers tend to think Zestimates are the word of the housing gods. I've updated my listings facts on Zillow and it still hasn't properly affected the Zestimate and I feel they negative affect our businesses and the local real estate market. Read a post I wrote about this very topic here and Zillow's reaction to it: http://www.lianejamason.com/real-estate-news/post-5/
By Pauline Vargo,  Sun May 18 2014, 16:03
In Pennsylvania my county only appraises properties every 30 years , so Zillow and Trulia are using Old data to estimate a homes value. My home is $100,000 lower on both sites than it was appraised at by a local Broker in 2010.

It would certainly help if ALL Counties would reappraise properties every year to give accurate data but that does not happen since it costs Millions to do such reappraisals for an entire County.
By percherongal,  Sun May 25 2014, 19:06
Its odd, Zillow has my house at this outrageously high estimate. We bought the property on 2 parcels (5.66 acres and house and an adittional 14.18 acres) for 118,500. Zillow estimates my house and JUST the 5.66 acres, to be worth 289,000. This is an absolute joke. The guy before us bought it for 120,000. How are they coming up with this?

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