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How Bad Are Zillow “Zestimates”?

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Re: How Bad Are Zillow “Zestimates”?

#51

Post by yoloswagins »

ensignavenger wrote: post #35
toomuchtodo wrote: post #27

Earlier quoted context omitted.

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.

Or they can be acquired via county assessor data, for free, from the court house. From the county assessor, you'll get sold price, deed type, beds/baths, and high level sundry information.

Re: How Bad Are Zillow “Zestimates”?

#52

Post by honkhonkpants »

ensignavenger wrote: post #18
EpicEng wrote: post #2

More 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.

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.

Re: How Bad Are Zillow “Zestimates”?

#53

Post by toomuchtodo »

yoloswagins wrote: post #51
ensignavenger wrote: post #35

Earlier quoted context omitted.

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.

Or they can be acquired via county assessor data, for free, from the court house. From the county assessor, you'll get sold price, deed type, beds/baths, and high level sundry information.

This works for historical data analysis, but falls over flat for trying to ascertain asset prices in markets, due to how much more quickly the MLS data is updated compared to public records (although, to Redfin's credit, they provide both the MLS record and public record for property events for completeness).

Some properties are only on the market for hours/days; you'd never have a chance as a market participant if you only relied on stale public records.

Re: How Bad Are Zillow “Zestimates”?

#54

Post by 20years »

Realtors 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 blaming Zillow & Zestimates for their own weaknesses. It is getting old.

Re: How Bad Are Zillow “Zestimates”?

#55

Post by gedy »

drewbuschhorn wrote: post #12

I bought a home last year, and each realtor I talked to brought up how terrible Zillow was before I ever mentioned it. If you look at the WaPo article all the comments are by other realtors, so I'd take those comments with a grain of salt. Oddly, my mortgage guy never looked at Zillow (that I saw) for figuring out values, so shrug . I'm sure the data is inaccurate, but it's somewhere to start the conversation and let…

I found and bought a house through Zillow and the selling agents were really irritated by this, and in many cases would ignore the Zillow agent (who was great). I think a lot of this is the fear of competition and the threat to their bottom line

Re: How Bad Are Zillow “Zestimates”?

#56

Post by exhilaration »

donmaq wrote: post #3

SF Bay area, I've had 3 formal house assessments, & each time they "start with" Zillow et al to look at "reasonable values in the neighborhood". Which seriously affects your ability to refi, etc. So Yeah Zillow has an effect. It's worth it to create a login & enter in your upgrades, so your ZESTIMATE goes up.

It's worth it to create a login & enter in your upgrades, so your ZESTIMATE goes up.

Very nice, thank you, my Zillow estimate is now $5965 higher. We have no intention to sell but if we do, at least I can start the negotiations at a higher price point by pointing to Zillow.

Re: How Bad Are Zillow “Zestimates”?

#57

Post by achileas »

drewbuschhorn wrote: post #12

I bought a home last year, and each realtor I talked to brought up how terrible Zillow was before I ever mentioned it. If you look at the WaPo article all the comments are by other realtors, so I'd take those comments with a grain of salt. Oddly, my mortgage guy never looked at Zillow (that I saw) for figuring out values, so shrug . I'm sure the data is inaccurate, but it's somewhere to start the conversation and let…

There are competitors that work more closely with realtors and also competitors that compete with just the zestimate, such as Smartzip.

Re: How Bad Are Zillow “Zestimates”?

#59

Post by kosei »

Neliquat wrote: post #39
kosei wrote: post #31

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.

Isnt that what it is marketed as? I found it useful as a starting point when shopping.

Exactly. I think the writer is taking issue with trying to use it as a more exact science, and calls it out for being within 20% of the sale value 90% of the time, which I think is pretty reasonable considering the high amount of subjectivity in home purchasing.

Re: How Bad Are Zillow “Zestimates”?

#60

Post by sixdrum »

The Zestimate for my house is incredibly close, within $2k of a recent appraisal. There are a lot of comparables in the area, so they have a decent amount of data to work with.

I have a friend who just bought a 3,000sf house on 1/2 of an acre in Lexington, VA for $31k. Zillow has it at $400,000. He's either incredibly lucky and should buy me a beer, or Zillow is the worst. Leaning towards the latter.

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