how accurate is zillow's property estimates?

Asked by Dowtin, silverspring Thu Oct 11, 2007

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Erin Stumpf…, Agent, Sacramento, CA
Thu Oct 11, 2007
BEST ANSWER
Here is my answer cut and paste from a previous thread regarding Zillow...

Zillow seems to be the new real estate magic pill for most internet-junkie, novice real estate enthusiasts. Frequently I get asked to do property CMA's (Comparative Market Analysis) by those who are thinking about listing their home for sale. My CMA process goes something like this...first I have a thorough conversation with the homeowner regarding physical condition, features, amenities, location, etc. Then I scour the MLS and tax archive data for comparable properties that are currently on the market, pending sale, and sold within the last 6 or so months that are in the same tract / neighborhood (same neighborhood is critical). I zero in on market conditions for the individual tract / neighborhood the home is in (also critical). I drive by the house. If I have not already seen the comparable properties in person (I preview and tour A LOT of property in my home areas), I drive by and if possible I tour those too. Once I have done all of these tasks, I create a detailed report for my prospective client. I narrow down a price range. This process takes a few hours. Then I present the report and price range to my client in person at their home, where I zero in on an exact suggested listing price.

"I looked up my home's value on Zillow and..." has become my least favorite phrase as of lately. Just the other day, I worked for several hours on a CMA, and presented a price range of $375k - $389k. After actually touring the home and seeing things like the master bedroom was really large for the area and type of house, that the electrical panel had been upgraded, recessed lighting in the living room, neutral decor, and new high-quality granite counters in the kitchen, I felt confident in my analysis and suggested a listing price on the high side of the range at $385k. "But Zillow says my house is worth $428k!"

Zillow.com is a site that, by using some proprietary combination of databases, algorithms, and who knows what else give a "Zestimate" of a property's value. Yep - it's the magic pill for some, and the poison pill for me. What Zillow does not take into account: remodeling, upgrades, views, landscaping, nearby schools, unique architecture, a recent death on the property, the crack house next door, smell, traffic noise, a main/busy street, funky wallpaper, barking dogs, etc.

Doing a CMA is really an art rather than a science.

I will give credit where credit is due though - Zillow does have some neat mapping features, which I will admit are pretty useful.
1 vote
Jason S. Ger…, , 92024
Thu Oct 11, 2007
Dear Dowtin,

Lots of real estate professionals are quick to dismiss Zillow. Many do so for legitimate reasons, many do so because like so many web sites, it empowers consumers with information and potentially erodes the power realtors have in the market. My take is simple. Whether you're buying or selling a property, the more information, analysis and data you can collect on that property before entering into a transaction, the better. Zillow often provides a lot of useful information about properties and thus it is a helpful tool for both buyers and sellers. However, Zillow's "zestimates" are exactly what they say they are...estimates of the value of a house and nothing more. The only way to truly know the value of a property is to put it on the market, expose it to as many potential buyers as possible, and see what happens. A house is only worth what someone is willing to pay for it, plain and simple. If you're selling a home and you find a buyer willing to pay you 25% more than the valuation set by Zillow (or any other appraisal source) then guess what, Zillow is inaccurate. If the best price you're able to fetch for your house on Zillow is equal to the "zestimate" then Zillow suddenly looks like a prophet. So use Zillow as an information source, nothing more. Before selling your home, sit down with a real estate professional, look at recent comparable sales in your neighborhood, look at how other comparable homes on the market are priced, select a price in line with the comparables and then put up a "for sale" sign and expose it to as many buyers as possible. You'll find out pretty quickly what your house is truly worth.

This is just one real estate professional's humble opinion but I hope you found it helpful. If you or anyone you know is looking to buy or sell property in San Diego County, please feel free to e-mail me at jason.gerlach@gmail.com or call me at 1-877-804-7373.

Sincerely,

JASON
Web Reference:  http://www.jasongerlach.com
2 votes
Sylvia Barry,…, Agent, Marin, CA
Thu Oct 11, 2007
Not accurate. There are many, many houses in a certain area. Zillow took the recent sales records and the tax record for the house to get the sf, number of bedrooms, bathrooms, etc to come up with an estimated value for the house you are interested in.

Some of the problems - not enough sample for accurate estimate, the tax record does not tell you the condition of the house, the exact location of the house (one side may back up to open space, means $$$, the other side does not), view vs. no view, condition of the house, upgrades, floor plan, etc. Each can make a big difference on the price of a specific house.

I keep a close eye on zillow, and I go in and request estimates on houses periodically. They still have a long, long way to go.

Sylvia
2 votes
Steve, , 32818
Thu Oct 18, 2007
The data zillow uses for the estimates is accurate. Basically they use tax collector and property appraiser data to come up with the values. So if the property appraiser says the property's assessed value is 250k, this is part of the equation for coming up with the estimate. I have read threads where people blast zillow, but they are using the same data that an appraiser would use as a base for valuing a property. What it is valued at and what it will sell for are two different things. I am glad zillow created the service, because it put information in the hands of the consumer
Web Reference:  http://zoglist.com
1 vote
Mr.P, , Arizona
Fri Oct 12, 2007
I am quite confident, after further review. That the only thing good about Zestimates is the publicity that it generates for Zillow. Even though it appears to be mostly negative. It does strengthen Zillows on online rankings.
They have achieved success through failure
1 vote
Marty Kaiser, Agent, Orlando, FL
Fri Oct 12, 2007
Hi,

Zillow enables you to get a very general overview of a particular area or home price but is an innaccurate method to receive a current valuation on a property. A skilled realtor will do an in-depth assessment of your property and compare it to other similar homes in your area that have recently sold, are presently under contract or are for sale. In addition, that agent would need to view your home to evaluate it's present condition, upgrades etc. Also, a skilled neighborhood specialist has an intuitive feel for your community, current market trends, specifics of competing homes etc. in arriving at a proper price and marketing methodology for your home.

My recommendation if you are considering placing your home for sale or refinancing it is to speak with several realtors who specialize in your area and will review a detailed marketing assessment with you at no cost or obligation.

Sincerely,


Marty Kaiser
Broker/Associate
Orlando, Florida
407-595-9700
1 vote
Deborah Madey, Agent, Brick, NJ
Thu Oct 11, 2007
Zillow is a fun site to play with, but far from an accurate source of information on which to base decisions as serious as the purchase or sale of a property.

Realtors use recent comparables, as well as current active comps and recent under contract sales when advising sellers about pricing. Realtors also do a physical inspection of your property, and have been in many of the competing properties it he neighborhood. Zillow relies only upon public records, and algorithms that are still being adjusted.

Zillow doesn't know if your family room has rust carpet and 1970's brown paneling or if it has awesome wood floors in impeccable condition. Zillow doesn’t know if your home is tidy with a great floor plan or has extensive deferred maintenance.

Imperfect algorithms and lack of physical inspections limit the ability of Zillow to provide accurate Zesitmates. Still, it can be fun to play on their site.
1 vote
Patti Pereyra, , Chicago, IL
Thu Oct 11, 2007
Very NOT. Seriously, it's more miss than hit and it would be dangerous to rely on their estimates to either price your property or make an offer. To quote Ute: "So far, there is no reliable automated system to replace the expertise of a knowledgeable real estate professional".
1 vote
Brett Dunne -…, Agent, Upland, CA
Thu Oct 11, 2007
Dowtin:

On a scale of 1 to 10...about 2.5.
Web Reference:  http://www.daybreakgroup.com
1 vote
Ute Ferdig, Agent, Auburn, CA
Thu Oct 11, 2007
Hi Dowtin. Zillow's estimates are based on public records and they are more accurate in some areas than others. I would definitely not rely on their zestimates to make an offer on a property as the Zillow estimates do not take differences in features, property condition and other things that require adjustments into consideration. So far, there is no reliable automated system to replace the expertise of a knowledgeable real estate professional. I wish it were as easy as entering an address online and up comes the value. It would make my life a lot easier.
Web Reference:  http://www.go2kw.com
1 vote
Croixwood2002, Home Buyer, Annandale, MN
Thu Feb 16, 2017
Others who have experienced either wildly different zestimates or zestimates entirely wrong contactme. I am going to collect the thousands of harmed individuals and develop a class action lawsuit against Zillow and or Trulia which is owned by Zillow. They have a completely flippant attitude to their zestimates. In fact many professionals use their zestimates as a start point of value. They are also using lower zestimates to direct you to their agewnts that have paid a fee for leads from Zillow. This obviously creates a circumstance where people need to use the services of their agents. basically Zillow is scamming agents and home owners.

Contact me at croixwood2002@yahoo.com
Tom Huffman
0 votes
Sam, Home Buyer, Placentia, CA
Wed Aug 5, 2009
The website zillow is one of the main sources of estimating any house.because estimating a house needs 1-check the most recently sold house. 2-check the conditions of the house 3-any benefits like big back yard,gate or a good view.for example,a house in zillow estimated $400, so you can go to check the house and put all the other factors bestide estimating the value of the house in zillow.
0 votes
J R, , New York, NY
Thu Oct 18, 2007
Erin wrote:
"I looked up my home's value on Zillow and..." has become my least favorite phrase as of lately.
~~~~~~~~~~~~~
Mine is "I had an appraisal last year. . . " usually for a home equity loan, and we know how accurate those are.
0 votes
J R, , New York, NY
Thu Oct 18, 2007
In my town the assessed value is a fraction of the market value. Ziillow uses refi, mortgage and public records for it's data here. It is totally inaccurate when valuing properties near the water.
0 votes
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