It’s no secret that roughly 90% of home buyers use the internet to search for homes. Some of the most popular websites are Trulia, Zillow, and Realtor.com. All of these sites are very user friendly and I can understand why buyers use them. Unfortunately, time and time again, I find that Trulia and Zillow are not very accurate. One of the most frustrating things to me about these sites is that they include homes that are not for sale. All too often, clients of mine will send me an email with a list of homes they want to see and when I try to pull them up in the MLS, they’re not actually listed.
Today I’m going to pick on Zillow. From the Zillow website: “It starts with our living database of more than 110 million U.S. homes – including homes for sale, homes for rent and homes not currently on the market. Add to that Zestimate® home values, Rent Zestimates and lots of other useful information you won’t find anywhere else, and as a result, consumers are given an edge in real estate.”
Really Zillow? Are consumers given an edge? I think it’s causing confusion and frustration. Consumers are all too often disappointed when they find out the home they found online is not actually for sale. And then there’s the Zestimate. How I despise you, Zestimate. In all honesty, the Zestimate is a good tool if consumers understand how it’s calculated and how it should be used but instead, too many consumers treat it as if it were an appraisal.
Here’s another excerpt from Zillow: “The Zestimate® (pronounced ZEST-ti-met, rhymes with estimate) home valuation is Zillow’s estimated market value, computed using a proprietary formula. It is not an appraisal. It is a starting point in determining a home’s value. The Zestimate is calculated from public and user submitted data; your real estate agent or appraiser physically inspects the home and takes special features, location, and market conditions into account. We encourage buyers, sellers, and homeowners to supplement Zillow’s information by doing other research such as:
- Getting a comparative market analysis (CMA) from a real estate agent
- Getting an appraisal from a professional appraiser
- Visiting the house (whenever possible)”
The Zestimate is simply an estimate. It doesn’t take into account the fact that one home had granite countertops while the other home had laminate. It also doesn’t know that there were nightmare renters with their 2 dogs and 3 cats living in the house that completely destroyed the carpet, smoked in the house, and knocked holes in the walls.
This is what I think the Zestimate is really useful for. If you live in a neighborhood where all of the homes were built by the same builder and the interior finishes and lot sizes are very comparable, you might get good results with the Zestimate. Let’s say you’re thinking about listing your home for sale but you’re only willing to sell for X amount. Enter your address into the search box. You’ll see the Zestimate for your home and if you scroll down, you’ll also see a value range. The results will also include recent sales in your neighborhood that you can compare your home to. If you like the Zestimate and value range, then contact a Realtor to find out exactly what your home is worth.
Let’s take a look at some examples of how the Zestimate compares to the actual sales price. The Zestimate for 3005 NE Hope Dr. in Bend is $207,567.
Let’s look at another example. The Zestimate for this home in The Parks at Broken Top is $418,808. The Parks is exactly the type of neighborhood in which I would expect the Zestimate to be pretty close to actual market value.
It sold on May 1, 2013 for $399,000. That’s actually a pretty good Zestimate in my opinion. The home was originally listed for $435,000. After a couple of price reductions, they got a full price offer.
Next I chose a home on Awbrey Butte where the level of quality and interior finishes can vary quite a bit, but of course the Zestimate doesn’t know that. The Zestimate for 3205 NW Colonial Dr. is $737,062.
This house actually sold on May 21, 2013 for $885,000. What do you think, close enough? Of course not!
I have plenty more examples but I think you can see that the Zestimate can either be too high or too low, or on occasion, fairly accurate. If you’re a buyer, you really shouldn’t be using the Zestimate to determine what you want to offer for a home. If you’re a seller, you can’t expect that your home is going to sell for the Zestimate. The Zestimate is just an estimate.
Zillow has some great features. I particularly like the map search and neighborhood search options. There is also good information in the forums and Local Info section of the website. However, if you want the most accurate information about home values in Bend, Oregon, you’re better off contacting a Bend real estate agent like myself.