Home >> Real Estate Articles >> Inaccurate Zillow - Zestimates
Inaccurate Zillow - Zestimates
When “CBS This Morning” co-host Norah O’Donnell asked the chief executive of Zillow recently about the accuracy of the website’s automated property value estimates — known as Zestimates — she touched on one of the most sensitive perception gaps in American real estate.
Zillow is the most popular online real estate information site, with 73 million unique visitors in December. Along with active listings of properties for sale, it also provides information on houses that are not on the market. You can enter the address or general location in a database of millions of homes and probably pull up key information — square footage, lot size, number of bedrooms and baths, photos, taxes — plus a Zestimate. Shoppers, sellers and buyers routinely quote Zestimates to realty agents — and to one another — as gauges of market value. If a house for sale has a Zestimate of $350,000, a buyer might challenge the sellers’ list price of $425,000. Or a seller might demand to know from potential listing brokers why they say a property should sell for just $595,000 when Zillow has it at $685,000.
Disparities like these are daily occurrences and, in the words of one realty agent who posted on the industry blog ActiveRain, they are “the bane of my existence.” Consumers often take Zestimates “as gospel”. If either the buyer or the seller won’t budge off Zillow’s estimated value “that will kill a deal.”
Back to the question posed by O’Donnell: Are Zestimates accurate? And if they’re off the mark, how far off? Zillow CEO Spencer Rascoff answered that they’re “a good starting point” but that nationwide Zestimates have a “median error rate” of about 8%. WHOA. That sounds high. On a $500,000 house, that would be a $40,000 disparity — a lot of money on the table — and could create problems. But here’s something Rascoff was not asked about: Localized median error rates on Zestimates sometimes far exceed the national median, which raises the odds that sellers and buyers will have conflicts over pricing. Though it’s not prominently featured on the website, at the bottom of Zillow’s home page in small type is the word “Zestimates.” This section provides helpful background information along with valuation error rates by state and county — some of which are stunners.
For example, in New York County — Manhattan — the median valuation error rate is 19.9%. In Brooklyn, it’s 12.9%. In Somerset County, Md., the rate is an astounding 42%. In some rural counties in California, error rates range as high as 26%. In San Francisco it’s 11.6%. With a median home value of $1,000,800 in San Francisco, according to Zillow estimates as of December, a median error rate at this level translates into a price disparity of $116,093.
So what do you do now that you’ve got the scoop on Zestimate accuracy? Most important, take Rascoff’s advice: Look at them as no more than starting points in pricing discussions with the real authorities on local real estate values — experienced agents and appraisers.
This is extremely important to know. So many people feel that Zillow Zestimates are accurate. Please check with your real estate agent or an appraiser to make sure your home is priced correctly. Source : LA Times
Visit my website for additional information about Real Estate and our Central Ohio Market! www.DeLena.com
People Also Read
The Selling Process - Today
You might think that selling your home would be an easy process… 1) Call a Realtor, put sign in the yard 2) Magically a buyer comes along offers you what you want 3) They get their loan approved for your asking price 4) Off you go...
Before You Let Your Home Go Back to the Bank
Fannie Mae has launched a new website to help homeowners who are behind on their mortgage payments. The website, www.knowyouroptions.com has useful information and resources to help home owners avoid foreclosure. The goal is to help homeowners stay i...
Setting Clear Expectations
Short sales are not for the faint of heart of heart or for the buyer who needs to be in a home in a specific time period. Short sales are for buyers wanting to buy a home below market value. The difference between a foreclosure ...
Home Decor Ideas
Thinking about surprising your sweetheart with a room makeover for Valentine’s Day ,or any day for that matter? When it comes to décor, men are not from Mars, but they may be from Home Depot, while women are from Lowe’s. Here are tips to make sure ...