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How Bad Are Zillow “Zestimates”?

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Re: How Bad Are Zillow “Zestimates”?

#71

Post by teuobk »

exhilaration wrote: post #56
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.

Incredible -- I just did the same, and my house's "zestimate" went up about $20,000.

Of course, if I compare my house to actual sales in the neighborhood over the past few months, that's probably 10% high, so correcting Zillow's data about my house made the zestimate less accurate, not more.

Re: How Bad Are Zillow “Zestimates”?

#72

Post by dforrestwilson1 »

mcherm wrote: post #63

I am quite disappointed in the research that went into this article. (1) Author discovers that Zillow has a specific claim about accuracy: "around 90% of the listing Zestimate is “Within 20% of Sale Price” of the home". Author then gripes that this is "a really large margin for error". Really? Because I was prepared to praise Zillow for such honest and clear reporting. It only costs a few hundred dollars per home (Zi…

Yeah people dump on Zillow quite a bit. Probably because home values can be a very emotionally stirring event.

Zillow's aggregate economic data is solid, often a better predictor than the Case Shiller Index. I expect that Zestimates will improve over time as the data trickles down and lessons are learned.

Re: How Bad Are Zillow “Zestimates”?

#73

Post by bertjk »

ensignavenger wrote: post #32
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.

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).

This is correct; you don't do an appraisal before getting a house, you get an appraisal before getting a mortgage. Typically you also get reappraised every time you refinance, and often the bank pays for it.

Re: How Bad Are Zillow “Zestimates”?

#74

Post by kelukelugames »

dforrestwilson1 wrote: post #72
mcherm wrote: post #63

I am quite disappointed in the research that went into this article. (1) Author discovers that Zillow has a specific claim about accuracy: "around 90% of the listing Zestimate is “Within 20% of Sale Price” of the home". Author then gripes that this is "a really large margin for error". Really? Because I was prepared to praise Zillow for such honest and clear reporting. It only costs a few hundred dollars per home (Zi…

Yeah people dump on Zillow quite a bit. Probably because home values can be a very emotionally stirring event. Zillow's aggregate economic data is solid, often a better predictor than the Case Shiller Index. I expect that Zestimates will improve over time as the data trickles down and lessons are learned.

This is correct. I used to work at Redfin and estimates are a sore point for homeowners. It's one large pissing contest for their egos. Everyone has the same complaint, "Why isn't my home priced as high as that one?!?"

Re: How Bad Are Zillow “Zestimates”?

#75

Post by joeax »

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…

My bro-in-law became a real estate agent a couple years ago. Recently we were discussing Zillow, and he went into a tirade about how terrible it is. I just mentioned that it's a good tool to gauge the price trends of my neighborhood, but he began countering with canned, carefully scripted responses that sounded like indoctrination from his broker/employer. I just sighed, before the topic turned to how important it is to pay the full 6% when listing your house.

The real estate industry is one of the most protectionist industries out there, and any threat of disruption, no matter how minor, is met by an army of vitriol.

Re: How Bad Are Zillow “Zestimates”?

#76

Post by joeax »

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…

> Oddly, my mortgage guy never looked at Zillow (that I saw) for figuring out values, so shrug.

A few years back I called Wells Fargo to get some info on refinancing, and the first thing the loan agent did was get on Zillow to calc the existing LTV.

Re: How Bad Are Zillow “Zestimates”?

#77

Post by teuobk »

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?

Re: How Bad Are Zillow “Zestimates”?

#78

Post by byoung2 »

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.

Exactly...looking at a neighborhood of $500k houses, a fixer-upper vs a recent remodel could easily change the price by 20%, and Zillow obviously doesn't have attributes for the condition of the house.

Re: How Bad Are Zillow “Zestimates”?

#79

Post by SoftwarePatent »

This article deserves the heavy criticism it has received here. I'll go further and say it is part of a trend you might call skepticism gone wrong. This is a intellectual movement that "throws the baby out with the bathwater" because they are so skeptical that they don't believe anything!

Many authors in this vein have read about, for example, cognitive bias, the many invalid results in scientific journals and the hoax/fake news/infowars trend. They see every human action as a result of bias, every result as invalid, and every news article as part of a misinformation campaign.

Having the most accurate possible understanding of the world we live in is only possibly by trusting information sources which deserve it, understanding the limits of what "quick and dirty" statistical analysis is capable of, and recognizing when people are influenced by bias, and also when people are acting with full awareness of bias.

Re: How Bad Are Zillow “Zestimates”?

#80

Post by eanzenberg »

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.

Terribly scary that a huge financial decision would depend on giving signing up and giving data to some website.
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