In the hot west coast markets, Zestimates are usually fairly accurate but often end up low compared to closing due to bidding wars and mania.
How Bad Are Zillow “Zestimates”?
151–160 of 208 posts
Re: How Bad Are Zillow “Zestimates”?
#152Earlier 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).
Well, yeah. Does anyone need an appraiser to tell them how much the house is worth? Don't you look at what is available and negotiate the price accordingly?
Re: How Bad Are Zillow “Zestimates”?
#153Earlier quoted context omitted.
Like the previous reply, I'm going to assume you meant $310k, not $31k, as $31k for that property doesn't make sense based on the factors you listed unless the place is a dump. As to the disperity, this could be easily explained by seller factors. Maybe the house is actually worth $400k, but they needed to sell it, even if less than it was worth (had a contract on another home, home was a foreclosure, etc etc).
I did not drop a zero. He paid cash.
is it a nuclear waste dumping ground? What's the mitigating factor?
Re: How Bad Are Zillow “Zestimates”?
#154Earlier quoted context omitted.
"People" don't. It's a required part of the due diligence to get a mortgage. No appraisal, no loan. For the most part, the banks and brokers re-sell those loans immediately, so they don't stay on their books. All they need to protect them from lawsuits later is proof that they followed the process to the letter -- which involves getting a written appraisal. No mortgage broker or Realtor ever got rich by picking a fig…
Aside from the buyer, who can pay for his own appraisal.
Usually a buyer has already agreed to buy a house at a certain price. So if the appraisal comes back low, the seller doesn't lower the price. Instead the buyer just doesn't get a loan so they don't get to purchase the house they had their heart set on.
Re: How Bad Are Zillow “Zestimates”?
#155Earlier quoted context omitted.
Amazing that people still pay for that.
"People" don't. It's a required part of the due diligence to get a mortgage. No appraisal, no loan. For the most part, the banks and brokers re-sell those loans immediately, so they don't stay on their books. All they need to protect them from lawsuits later is proof that they followed the process to the letter -- which involves getting a written appraisal. No mortgage broker or Realtor ever got rich by picking a fig…
I understand that it's required, and that organizations often follow processes long after they're revealed to be foolish.
But it's been a decade now since the housing bubble revealed that appraisals are meaningless.
Why has no one eliminated them?
Re: How Bad Are Zillow “Zestimates”?
#156Earlier quoted context omitted.
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).
Well, yeah. Does anyone need an appraiser to tell them how much the house is worth? Don't you look at what is available and negotiate the price accordingly?
Banks are the biggest customers of appraisers. In most cases, they require an appraisal before they will lend on a property. As far as what you say- negotiating- yes, most buyers don't get appraisals done as part of the negotiating process. Some buyers do, however, get an appraisal to give them an idea what to ask for. Especially if their home is especially unique (and many people think their home is special, even when it isn't... but that is a whole 'nother ball of wax! :)
Re: How Bad Are Zillow “Zestimates”?
#157Realtors who feel threatened by Zillow love to complain about Zestimates. Zillow has made it clear time and time again that they are not 100% accurate and even allow homeowners to edit them. Zestimates are a tool that homeowners like to use. Zillow knows that. Good Realtors won't feel threatened by it but instead leverage it to provide prospects with a much more complete and accurate estimate. Realtors need to stop b…
Zillow deserves a fair share of the blame because they prominently feature a single number with dollar-level precision and bury the caveats multiple clicks away on a separate page. Some basic UI changes could avoid all of that: e.g. instead of showing $123,456, show a range like $115,000-135,000, and keep the last few digits at zeros based on their estimated error rates. Similarly, their graphs could use shading to m…
> Some basic UI changes could avoid all of that: e.g. instead of showing $123,456, show a range like $115,000-135,000
So true. When you know that you are not displaying an exact dollar amount you should not use exact dollar values. Exact dollar values afford exactness even though the branding is an estimate.
Re: How Bad Are Zillow “Zestimates”?
#158Earlier quoted context omitted.
Aside from the buyer, who can pay for his own appraisal.
Usually a buyer has already agreed to buy a house at a certain price. So if the appraisal comes back low, the seller doesn't lower the price. Instead the buyer just doesn't get a loan so they don't get to purchase the house they had their heart set on.
A friend of mine saved $15K on a house because the appraisal came in low.
If the bank won't write a loan for the agreed price, the original contract is void, since it's contingent on loan approval. If the seller's heart is set on moving, he might well lower the price.
Re: How Bad Are Zillow “Zestimates”?
#159Earlier quoted context omitted.
"People" don't. It's a required part of the due diligence to get a mortgage. No appraisal, no loan. For the most part, the banks and brokers re-sell those loans immediately, so they don't stay on their books. All they need to protect them from lawsuits later is proof that they followed the process to the letter -- which involves getting a written appraisal. No mortgage broker or Realtor ever got rich by picking a fig…
I understand that it's required, and that organizations often follow processes long after they're revealed to be foolish. But it's been a decade now since the housing bubble revealed that appraisals are meaningless. Why has no one eliminated them?
They are required by law or by long-standing policy in a government-run body (which is practically the same thing). Laws DO change to keep up with the times, but they do so rather slowly. In 50 to 100 years, if there is continuous clear evidence that home assessments are highly unreliable and not particularly profitable to anyone, then you should expect them to be eliminated.
Re: How Bad Are Zillow “Zestimates”?
#160Realtors who feel threatened by Zillow love to complain about Zestimates. Zillow has made it clear time and time again that they are not 100% accurate and even allow homeowners to edit them. Zestimates are a tool that homeowners like to use. Zillow knows that. Good Realtors won't feel threatened by it but instead leverage it to provide prospects with a much more complete and accurate estimate. Realtors need to stop b…
Zillow deserves a fair share of the blame because they prominently feature a single number with dollar-level precision and bury the caveats multiple clicks away on a separate page. Some basic UI changes could avoid all of that: e.g. instead of showing $123,456, show a range like $115,000-135,000, and keep the last few digits at zeros based on their estimated error rates. Similarly, their graphs could use shading to m…
There is a range immediatly below the number, which seems pretty reasonable to me. For my place it shows a range from -8% to +10%