How Bad Are Zillow “Zestimates”? • Hacker News Board

Re: How Bad Are Zillow “Zestimates”?

#111

Post by cema » Mon, Dec 05, 2016, 6:34 PM UTC

arthurgibson wrote: post #102

bshep wrote: post #101

Earlier quoted context omitted.

As an example of above, A couple of years ago my wife and I were selling our home and the appraisal came back lower than agreed sale price, we asked appraiser to pick different comparables and the appraised price went up 10-20k

Thats interesting, why would the seller have any control over the appraisal? The mortgage broker who requests the appraisal is typically working with the buyer.

I don't think this is "control", the appraiser [sp?] did not have to agree to do that.

Re: How Bad Are Zillow “Zestimates”?

#112

Post by honkhonkpants » Mon, Dec 05, 2016, 6:34 PM UTC

EpicEng wrote: post #100

honkhonkpants wrote: post #52

Earlier quoted context omitted.

The job of the appraiser is to write down a number as large as or larger than the amount to be financed. They know this and they know the number in advance. What they do is not rigorous.

Certainly you can influence the appraiser, but the way you state it is nonsense. Their job is also to provide feedback to the buyer, they won't just pull any number you like out of a hat.

Appraisers absolutely do pull numbers out of hats, because appraisers who regularly fail to write down a large enough number will stop getting calls.

Re: How Bad Are Zillow “Zestimates”?

#113

Post by joshuaheard » Mon, Dec 05, 2016, 6:35 PM UTC

I use Zillow to give me a ballpark number for prices in an area I don't know well. My experience is that they are usually within 20% of the market price, which coincidentally they say on their website. For a free automated service, Zillow is great. If you want a better number, do your own comp analysis, or hire an appraiser.

Re: How Bad Are Zillow “Zestimates”?

#114

Post by jaclaz » Mon, Dec 05, 2016, 6:39 PM UTC

geekamongus wrote: post #34

I 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.

Yes, sites like those - even if with "wrong" info, alter the information asymmetry that estate agents had and that used as part of their profession.

Only seemingly unrelated, just in case, the classic from Frakonomics:

https://www.wired.com/2005/05/realestate/

Re: How Bad Are Zillow “Zestimates”?

#115

Post by Spooky23 » Mon, Dec 05, 2016, 6:40 PM UTC

In New York Zillow seems to be very dependent on property tax assessment data, at least in my region. They also don't have a good way to distinguish between neighborhoods well.

That said, they do a pretty decent job overall. Property valuation is art and science, and is probably a lot easier in a place like LA with lots of tract homes built in similar timeframes to similar spec.

I live in a city founded in the 1600s. Housing within a 5 block radius is built between 1890 and 2016. It's not a market with a lot of flipping, so it's hard to value as a house that looks like mine (reasonably modern internals) may have 1960s kitchens and bathrooms.

Re: How Bad Are Zillow “Zestimates”?

#116

Post by baus » Mon, Dec 05, 2016, 6:41 PM UTC

toomuchtodo wrote: post #27

drewbuschhorn wrote: post #19

Earlier 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.

I don't think appraisers can use MLS listings exclusively when valuing a property. The primary source is typically public records data.

Re: How Bad Are Zillow “Zestimates”?

#117

Post by leviathant » Mon, Dec 05, 2016, 6:43 PM UTC

mholmes680 wrote: post #5

While 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…

I paid $265,000 for my house, which at the time had a Zestimate around $500,000. After our purchase, the Zestimate slowly rose over $950,000. While I understand we got a good price on our building, I knew the Zestimate was garbage.

A couple of weeks ago, the Zestimate dropped to $435,000. This would definitely be closer to an accurate value, but there's also no record of the recalculation at all in the graph.

At this point, it's basically noise.

Re: How Bad Are Zillow “Zestimates”?

#118

Post by bshep » Mon, Dec 05, 2016, 6:43 PM UTC

cema wrote: post #111

arthurgibson wrote: post #102

Earlier quoted context omitted.

Thats interesting, why would the seller have any control over the appraisal? The mortgage broker who requests the appraisal is typically working with the buyer.

I don't think this is "control", the appraiser [sp?] did not have to agree to do that.

You are correct they didnt have to agree to change anything. But there were other houses that were closer ( one of the comparables that he pcked was in a different neighborhood and was waaay cheaper ) and houses that were more similar so we pointed that out. He agreed and redid the estimate with houses that were closer both on distance and in size/amenities. All of this was throught the realtors ours and theirs.

Re: How Bad Are Zillow “Zestimates”?

#119

Post by zrail » Mon, Dec 05, 2016, 6:45 PM UTC

teuobk wrote: post #77

intrasight wrote: post #13

Better question is "how bad are the compared to those of professional appraisers who look at half a dozen comprables?" An even more important question is "how biased (based on who is paying) are those professional appraisers?"

Isn't it strange how the appraisal always seems to come in just a little above where it needs to be in order for the financing to be approved?

An appraisal is telling you what the market will bear for a particular property. What better indication of the market value than the most recent price agreed to?

Re: How Bad Are Zillow “Zestimates”?

#120

Post by [deleted] » Mon, Dec 05, 2016, 6:45 PM UTC

teuobk wrote: post #77

intrasight wrote: post #13

Better question is "how bad are the compared to those of professional appraisers who look at half a dozen comprables?" An even more important question is "how biased (based on who is paying) are those professional appraisers?"

Isn't it strange how the appraisal always seems to come in just a little above where it needs to be in order for the financing to be approved?

[deleted]