Beware of the Zestimate
Posted Apr 12, 2007 @ 7:07 pm, Viewed by 1326 Visitors, Read 1364 Times.It was late last night when I first went to Zillow.com. That was part of my problem. As a REALTOR® I thought it might be a good idea to add my profile to the popular website. Kind of "if you can't beat 'em, join 'em" mentality. OK, I did it to see if I got a backlink. No, really, such a popular site might actually bring some traffic.
As I entered my profile I saw the "add a listing" feature. I decided to try it with one listing I have where my sellers have a contingent contract on another property and need to sell. I'm trying to do whatever I can to market their place.
It was easy enough to enter and I pressed the Publish link. To my horror I saw the list price of $349,900 followed by the zestimate of $262,733!
Today, I tried removing the listing. There was no option to do so. I deleted all the data and photos I had entered. I was able to withdraw the listing and it seems that it cannot be found by a buyer search, even though it still exists on the site.
I did some further investigating. Believe me, trying to search for information on Zillow gives so many links and blog posts in communities like Active Rain and on the search engines that it's difficult to sort through. I did find a blog post on the Internet somewhere that was helpful.
The writer pointed out that you can adjust price by using "Seller's Estimate." This requires the seller to claim the property and then start entering upgrades with prices and also allows you to choose comparables listed on the site.
It took a learning curve for us to figure out the upgrade feature and we were finally able to choose other listings that were in the same subdivision. See, that was part of the low zestimate - they were using properties in a completely different subdivision that was truly comparing apples to oranges. There were already 4-5 listings in the same subdivision so why they had to go out of it doesn't make sense, especially when the prices were so much lower.
But even with adding the comparable listings, the "estimate" still was too low. We ended up going back to the upgrades and pushed the price up but we shouldn't have had to do this if the zestimate had used only those listings in the proper subdivision to begin with.
Here's the example: My listing is $349,900. Other listings in the subdivision ranged from $334,000 - $452,200. Yet the zestimate stayed at the original $260+ price while showing the "Owner's Estimate" at $344+. To make matters worse, the Value Range still showed from $228+ to $317+ That range is still under what the lowest priced unit sold for in that subdivision according to Zillow. ????????
Once you hit the Publish button, you're stuck with the zestimate for that property, no matter what you do later. So if I left that property to show as a For Sale listing, it would be priced at $349,900 with the above mentioned zestimate and value range. Now isn't that just great for buyers to see?
Someone else said she always shows buyers an article stating how bad Zillow's zestimates can be. But the truth is, people want to believe what they see. I would bet you most buyers want to believe that if Zillow says it's only worth $262,000 then it must be overpriced - by quite a lot!
While posting and questioning about this I was given a link to a Zillow complaint filed last year by the National Community Reinvestment Coalition, a non-profit organization in Washington, D.C. They filed a complaint against Zillow to the FTC. I've done a bit of research but cannot find out what happened with the complaint.
My suggestion is do not give Zillow your listings. If you feel the need to add one, do not hit the Publish link until you see what the zestimate is. I'm not sure but I'm thinking you can up the zestimate by using the "estimate" features, although I'm not 100% sure. I'm not going to waste any more time trying to experiment. This is just a warning for anyone else thinking of adding a property to this portal. Wish I had done more research before I added my listing.
.jpg)
Specializing in the Southwest Suburbs including Tinley Park real estate. Search for Orland Park homes for sale.
Rate this Post!
Share this Post
Print
Social Bookmarking13 Responses to “Beware of the Zestimate”
Great post.
Great read Judyo. Thanks for posting the blog. I agree with you about the Zestimate. Luckily my only listing is in a brand new development so they the Zestimate is unavailable. 
Ryan, I didn't mind Zillow either because I treated it like a "joke" if sellers or buyers brought it up. It is very easy to prove if you're able to show a buyer or seller the facts from our local MLS. It's just a shame that once you enter a listing you cannot change that zestimate. Now that's OK if it's higher than your listing, but to be more than $87,000 too low it makes the listing worthless. Who wants to advertise a listing with that kind of discrepancy? (Although I noticed another listing priced in the $400,000's that also had the same low zestimate). It looks terrible! Makes the agent look like an idiot and the sellers look greedy for anyone that doesn't know how bad Zillow's zestimates can be. Imagine a buyer hearing from a friend about how great Zillow is. They check it out and start looking at properties. They write up a low offer telling their agent that Zillow said it was only worth x amount. Now the agent has to do even more work debunking the zestimate. I wasted a lot of time myself making the mistake of putting the listing in. Lesson learned!
Ha! I bet that has happened to. I can just see the dissapointment on the buyers face when they learn the truth. "But zillow says its only worth...." I can't find any info on that lawsuit either. Let us know if you find something.
What I did find were a couple of responses on Active Rain from my post there by two Zillow "employees." They haven't found this post yet. They said we shouldn't worry about a low Zestimate, that we can explain it to our buyers and sellers and that it is explained on their site. So keep the listing up because having listings on their site will bring traffic - even if the Zestimate is $80,000 off (in the wrong direction). Obviously, they are and have never been real estate agents. They also tell us to keep adding listings to help them update the Zestimates and make them more accurate. Then they should pay us to add our listings, right?
Thanks for the heads up, I was about to go out there and set up an account. I will check the zestimates first. I just did my house for grins! Oh my!
SVRPaul
Judyo, Getting information is easy... anaylzing information properly is a completely different story. Even then... you can give a homeowner the spot on price and most of them still will not know how to "market" their property for sale which is completely different then "listing" a property for sale.
OK, so I tried checking my own house. It's up there twice for some reason with two different Zestimates. Boy, did I get ripped off when I bought it 5 years ago - LOL! The highest Zestimate is still $65,000 under what it's worth today and is less than what I bought it for 5 years ago, in an area showing constant annual appreciation. What a farce!
SVRPaul
LOL!! Mine is $180,000 below value!....I'm wondering if the big surge of real estate foreclosures is because homeowners are doing Zestimates and saying forget it... here are the keys!
Wow - that's the highest difference I've seen in my limited time over there (and reading what others say). Again, I just don't understand why the people at Zillow refuse to understand why we're so upset about these huge disparities and why we might not want buyers to see (and inevitably believe), such false data.
Thank for the heads up Judy. P.S. - Those that have viewed or commented on the article, it would be polite from time to time to rate the article. JMHO
SVRPaul
Judyo, Mine showed up so low because it is using vacant lots and condos outside of our neighborhood as comparables. Memphis... thanks for reminding us that we need to vote on articles we read.
REW Blogs User Stats
Currently Online Users:
0
Total Users:
2,524
Entries:
8,161
Unique Views:
7,970,476
Total Views:
8,406,936
Total Comments:
9,998
Total REW Points:
510
Judy Orr is in her 24th year as a REALTOR® in the southwest & near west Chicago suburbs. Judy mainly works in southwest Chicago, southwest & near west Cook County and northeast Will County. Read More
View My Listings
Contact Me
RSS Feed- This User's Stats
-
Blog Entries: 63Average Blog Rating: 2Unique Views: 43,103Total Views: 44,779Comments Posted: 250Comments Received: 195REW Points: 0
- Friends
-
Top Rated
REW Blogs RSS Feed
I actually like Zillow. They make my job easier. You can point out how clueless, off base and innaccurate they are and you can actually and quite easily prove your value to a skeptical prospect. As for their value to consumers - there is none, other than perceived. It seems they are pulling a fast one over the eyes of some people simply by claiming that they think REALTORS charge to much for our information. Now you see exactly what you get when you don't get information from a local REALTOR who actually knows what they are doing. I will see if I can find out some info about that lawsuit as well. Could be interesting...