The Zillow buzz
The real estate community was a buzz at the launch of Zillow.com in 2005. The prospect of receiving appraisals (Zestimates) with a few keystrokes was exciting. It was fun to type in your home address or the address of your former boss or local politician. Zestimates provided the ability to be a voyeur into the homes and finances of others. But how accurate were those findings?
Can you Trust Zillow’s Accuracy?
Zillow services are not totally helpful because a certain portion of the information provided is inaccurate. In checking properties very familiar, it was noted that in one case the property pictures were quite accurate. The taxes, floor coverings, square footage and heating were inaccurate. The floor covering was listed as carpet, hardwood and vinyl/linoleum when it is actually carpet, hardwood and custom tile. Listing electric baseboard heat instead of gas-fired hot water makes an expensive difference in heating costs. Another random property was listed as a townhouse when it is a custom duplex. There is a major difference between a townhouse and a custom duplex.
Where does Zillow receive its information?
Zillow is known to scrape information from other data bases such as the assessor’s office, public records, and multiple listing sites. Though some of the information is correct, it cannot be relied upon as totally accurate. Zillow is aware of the inaccuracies. They do provide the ability for an owner to correct some information. Since some of the Zestimates are significantly inaccurate, use the data with caution. Checking with a licensed Realtor is always a wise decision.
How could these inaccuracies be a disservice to you?
During low volume sales periods, it is extremely difficult to locate comparable sales. When the real estate market crashes, and it seems to crash and peak like a thriller roller coaster, the comparables are scarce and skewed. If the last sale was six to nine months ago when the market was at the top or the bottom, that sale is hardly applicable to the current market value.
The market value is what someone is willing to pay for that specific property at this moment in time.
As a seller, relying on the last sale price which was at the top of the market can create false expectations. Listing a property at an unrealistically high price frequently results in the property being on the market for an extended period of time as well as showing significant price reductions. This results in a frustrated seller and a frustrated Realtor.
As a buyer, if the comparable for the Zestimate was taken from the bottom of the market, the buyer is likely to make a lowball offer in the belief that the seller is overpricing the property. Only in a high volume market are the comparables in the Zestimate relatively likely to have validity and reliability.
Checking with a licensed Realtor who knows the market and can explain the fluctuations creates more accurate expectations. Use Zillow only as a relative idea. Checking with a licensed Realtor for the complete facts will save the buyer and seller from excessive Tums, gray hair and frustration.