Why Zillow’s Real Estate Listings are Incomplete and Not Accurate
Zillow’s Inaccuracies
As a real estate investor, you’re probably always on the lookout for some great deal that will give you good returns. And like scores of other investors or potential home-buyers, you probably rely on sites like Zillow for information of properties that are up for sale and their asking prices. But seasoned investors recommend that you use more reliable channels to check out estate listings and their prices. And the best channel possible is Multiple Listing Services, or “MLS” as they are more popularly known.
Why Use MLS
MLSs (Multiple Listing Service) have been developed after careful study and a great deal of investment. MLS is a common platform where brokers pool the information they have on the real estate available in the market and thus effectively widen their selling potential. Because of this sharing, each broker has access to a wider list of possible buyers.
What’s more, these platforms have a compensation system to reward the broker who can bring in a buyer and assist in sealing the deal. Property owners looking to sell their estate also have access to better and more competitive prices.
Incomplete Information
Sites like Zillow do not have access to MLS listings because they don’t possess the necessary licenses to practice as brokers. Thus, they have to rely on indirect data banks to collect information. This they do by gleaning data either from individual brokers or from separate MLS listings.
As a result, Zillow’s data can be sketchy, and at times, based on estimates rather than on actual and accurate information. Studies have shown that Zillow has only around 80% of the available real estate listed on their site and this means that you’ll be missing out on knowing about at least 20% potentially profitable deals.
Actual Listings
When looking for real estate, you need information about properties that are actually up for sale or “Active.” An “Active Listing” is a property whose owner is considering offers from buyers. And if you put in an offer, chances are, it might get accepted.
Then there are also “Contingent Listings.” These are properties that are being offered for a price lower than the market rate, probably because the owner is in debt and owes more than the price of the property. As a result, he/she must get the sale approved from his/her creditor.
Zillow does not offer you the distinction between Active and Contingent Listings, so when you rely on their listings, it is often difficult to pick out properties that you actually have a chance of acquiring.
Not Updated Regularly
Experienced investors will tell you that you have a better prospect of cracking a deal if you can place a bid within a few days of the property coming into the market. But with sites like Zillow, there is often a delay between the time when the property becomes available and it shows up on their listings.
By relying on Zillow, you could be placing an offer up to 3 months later and your asking price might not be competitive enough to get accepted. Check in with an MLS and you could have information that is not more than 9 days old.
Misinformation
When Zillow lists properties on their site, they also allow brokers to buy ad space alongside these listings. Investors looking for estate are likely to think that the agent appearing next to the listing is dealing in that particular property when that might not be the case. It is always prudent to use your own agent because he/she will be able to work out a better deal for you and maintain fiduciary responsibility to you rather than if you buy through an unknown.
You must also take into account that the values of properties listed on Zillow might not be accurate. That’s because they have their own system of evaluating each property, the result of which they call a Zillow Zestimate which unfortunately, is very often, way off mark.
Thus, the next time you begin a search for real estate to invest your money, be wise and choose an information portal that gives you the right information or better yet consult a Realtor who is a real estate agent with the proper licensing and commitment to upholding the highest standards of the industry.
References–
1. http://northcountyhomesandestates.com/north-san-diego-most-accurate-mls-home-listing-data/
2. http://www.realtor.org/topics/nar-doj-settlement/multiple-listing-service-mls-what-is-it
3. http://www.biggerpockets.com/renewsblog/2012/12/20/searching-real-estate-trulia-zillow/
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