Considering a Zestimate doesn't take into account anything about the aesthetics or actual character of the house, being off by 20% doesn't seem like it is that much. People respond to more than just the pure square footage and neighborhood. The Zestimate should be taken as nothing more than a directional starting point for someone who doesn't have the time to actually look at neighborhood comps.
How Bad Are Zillow “Zestimates”?
31–40 of 208 posts
Re: How Bad Are Zillow “Zestimates”?
#32Earlier quoted context omitted.
No one takes a Zestimate seriously in real estate (not realtors, not banks), so there's no need to create a free competitor. Financing still lives and dies by the professional appriasal; as long as banks prefer that, Zillow has zero pull.
Unfortunately I wasn't able to afford to have a professional appraisal done for every house my realtor showed me. I'm glad you were in a different position.
You usually do a professional appraisal after you have a house under contract, to verify that it is worth what you were willing to pay for it- this is usually done to protect the bank... though in many cases it may protect you as well, that (protecting you) is not the appraisers job. (At least, in most cases).
Re: How Bad Are Zillow “Zestimates”?
#33While we're at it, lets also figure out why my Zestimate dropped $40k overnight two months ago. If I was planning to sell, I would have a huge problem on my hands. On top of it the Zestimate chart shows no indication that they dropped it $40k. Aiming to fix the number is a fool's game : my "private home estimate" on my owner dashboard is 23% higher. Its a worthless number, and they should stop trying to manipulate th…
From time to time, Zillow rejiggers (that's a technical term) their algorithm, resulting in sudden readjustments of estimates. Given that the Zestimate itself is presented as a fairly wide range, the error margin is hardly hidden. Also, it is important to remember that no appraiser from Zillow has actually looked at your house; the data is drawn entirely from sales data, public records, and volunteered information. S…
point taken, but two observations:
1) its ridiculous to also "fix" the zestimate history. Put the old one in the history, and explain near the chart what rejiggered.
2) The market in my immediate area, as evidence by the comps from zillow and the sales prices in the newspaper, has only increased. The conservative comps are near the old zestimate - this is a suburban area. The wild ones are higher than my private estimate.
Re: How Bad Are Zillow “Zestimates”?
#34I don't know how accurate these things are, though my gut tells me not to trust them. That said, as a recent home-buyer, I can state without uncertainty that real estate agents hate Zillow, and Zestimates in particular.
Re: How Bad Are Zillow “Zestimates”?
#35Earlier quoted context omitted.
Unfortunately I wasn't able to afford to have a professional appraisal done for every house my realtor showed me. I'm glad you were in a different position.
Comparables are what a Zestimate is without the BS "special sauce" that Zillow makes you think exists. Comparables are free, and based on existing property market data (typically sold similar properties looking back a certain period of time). https://www.biggerpockets.com/rei/real-estate-comps-house-va... Yet again the tech community believing a problem exists to be solved that has already been solved. > In most mark…
In most markets comparables are acquired through an MLS database, and access to MLS is usually not free.
You can hire or become friends with a real estate professional that pays for access to MLS (or become one yourself).
But before sites like Zillow, there wasn't anything like it easily available to the average person.
Re: How Bad Are Zillow “Zestimates”?
#36Earlier quoted context omitted.
Unfortunately I wasn't able to afford to have a professional appraisal done for every house my realtor showed me. I'm glad you were in a different position.
You usually do a professional appraisal after you have a house under contract, to verify that it is worth what you were willing to pay for it- this is usually done to protect the bank... though in many cases it may protect you as well, that (protecting you) is not the appraisers job. (At least, in most cases).
When I bought my house a year ago the bank sent someone out to appraise it.
Re: How Bad Are Zillow “Zestimates”?
#37More comprehensive studies have ben performed: https://www.washingtonpost.com/news/where-we-live/wp/2014/06... I just bought a home myself and looked this up, but the takeaway is that the Zestimate is within +- 5% 50% of the time. So, not that accurate. Are people really using it in negotiations though? I'm sure people do, but you'd have to be pretty uninformed to do so, and I'm also sure you're real estate agent wou…
Yeah, but how accurate are appraisals? Several years ago I was reading about an analysis that found that Zestimates were about as accurate as appraisals are 80%+ of the time.
If appraisals are not accurate, then what is the definition of 'accurate'? Appraisals are what the lender relies upon to verify the mortgage amount. I also highly doubt that number.
Re: How Bad Are Zillow “Zestimates”?
#38Interesting. While I agree the results are likely to be inaccurate, this case study targets only the three largest cities in the US. Urban centers probably aren't the best population from which to sample. In a case like this, we'd probably want to use locations based on number of home sales; and even then, we'd need to account for the amount of time between homes changing hands i/e houses that are flipped. There's li…
I'd guess part of why those cities were chosen were to have enough data points to draw conclusions, since all the examples are from a narrow time frame.
Re: How Bad Are Zillow “Zestimates”?
#39Considering a Zestimate doesn't take into account anything about the aesthetics or actual character of the house, being off by 20% doesn't seem like it is that much. People respond to more than just the pure square footage and neighborhood. The Zestimate should be taken as nothing more than a directional starting point for someone who doesn't have the time to actually look at neighborhood comps.
Isnt that what it is marketed as? I found it useful as a starting point when shopping.
Re: How Bad Are Zillow “Zestimates”?
#40Thought exercise: if you were Zillow, what additional data would you need to make the estimates more accurate? And where would you get it?