How Good Are Zillow Estimates

[fastfunding]

Here's an article from Wall Street Journal
http://online.wsj.com/article_email/SB117142055516708035-lMyQjAxMDE3NzExNDQxMjQwWj.html


---------------------------
http://www.metcapitalgroup.com
Commercial Direct Lender

[Chief Tutor]

Zillow is gracing the cover of this weeks Fortune Magazine:

http://money.cnn.com/magazines/fortune/fortune_archive/2007/02/19/8400262/index.htm?postversion=2007020810

[YourOrlando.com]

For a snapshot, I think zillow is okay. I have seen some of the zillow estimates that were way off the mark, so be careful.

[REbuyersgroup]

Not so accurate. Problem is the time it takes for the property appraiser to update their records and then Zillow to update the database could be months.

As YourOrlando said, good for a quick snapshow, but don't rely on it.

Buyers and Seller like to use it to their advantage. You will see seller say ther home is worth $xxxxxxx but the true market is lower. You may loose the listing because of your honest and true approach to the process. People don't like to hear they are wrong even if they base their opinion on speculative information.

Beware...

[Alpharetta]

My own personal house is off by about 30% in actual value - that means it is a waste of time. I have tried it on a few other houses and seen it be off just as much. The problem is that the information source itself is notoriously bad. The gurus over at zillow know this too.

[ReelDawg]

Junk. If anybody wants to buy my house for what they say its worth, I'll meet you at the bank.

[Housebuz]

Their information is good for initial data to calculate the value of property. However, one has to examine all the particular parameters of a property that are not considered by the zillow methodology. In sum, it is a good start but could be misleading if in the wrong hands.

My 2 cents,

James

[erogers]

There has been a complaint filed with the FTC by the National Community Reinvestment Coalition for inaccurate value estimates produced by Zillow. I usually print out the Zillow estimate for properties when I go on a CMA - many sellers are checking this out and it's good to have that resource as a counter to them saying their homes is worth $X. I'm thinking of putting a mini-powerpoint together with all of the mistakes in my local market that Zillow has made. One CMA I went on the other week, Zillow said the home was worth almost 1/3 more than it was actually worth. Thankfully, the homeowners had no clue who Zillow was but appreciated the fact that I showed them all the available data.

[Housebuz]

It goes to show that real estate, like other fields, required a sophisticated data analytic approach. With all of the myriad factors involved in property valuation it is clear that a single compter based algorithm is not sufficient by itself.

Thanks,

James

[OregonLO]

I'd agree with everyone here. Its OKAY for a snapshot but they can be off and I wouldn't rely on the value. I can get a better idea just by pulling a list kit rather than using Zillow. I never even run a house on zillow...

[sellinggalveston]

Yes propeties in two different neigborhoods may be worth 10's of thousands of dollars more or less... and only local data can show that...then just the landscaping or interiors can change the price up or WAY down!

[bobparker]

The biggest part to remember about is that its accuracy is different in various parts of the country.

I worked at a major mortgage lender working portfolio leads (existing customer loans). Short of it, I was using and internal valuation service (ValueFinder) on over 50 leads/properties a week across the entire country. After 5 months, I got an internal sense of how much variation a would be from an actual appraisal - using a consistent company with set standards leaning towards conservative appraisals. Some areas as right on, some it was conservative, some it was very liberal.

The other key to remember is that being off $10k on an appraisal is not much at all. I have have had reinspections, 2nd appraisals, supervisor reviews and a variety of other examples of 2 professionals looking at a property and their professional OPINION of the estimated market value is can vary over $50,000 depending on ... their bias, what they want their portfolio to look like, how much building there was in the area, if they want a high value or a low value ... I could go on a whole lot more, but ... well - take an appraisers course and you will begin to understand (by the way - take a class, and passing a test just allows them to apprentice, not even fully 'practice').

Underwriters would love to get rid of the human factor in determining the value of a property, so AVM (automated Valuation Modeling) which is a fancy way of describing , is what underwriters want. However, they will not except until the data it (and appraisers) use is much more timely, accurate and detailed. Look at how many people dispute their tax assessment because the information is inaccurate. When MLS listings are 100% accurate and consistent then AVM starts to have a different complexion.

Whenever possible, I tend to rely more on to estimate the value of a property in a given market.

Remember - it is an estimate of what the market will buy a property in a period of time (1-6 months typically). But every sale is to one buy - not a market. So it comes down to what one buyer feels about that property meeting their specific needs at that specific time based on their specific situation. - Some days a McDonald's Hamburger is a great deal (and I would gladly pay 3 times the cost), sometimes it is a really bad deal (and you could not pay me to eat one) - for me. But the market levels out over billions of hamburgers of the exact same burger anywhere in the country that same day, sucks the same moment look how many are sold. Real Estate does not match. No two homes are exactly the same. So estimates are just that estimates - great tools, but only tools.

An appraisal, AVM, CME, MLS comparison are all tools in determining the value of a property to a variety of people. What one person will pay is based on their situation.

posting may not seem clear since system does not allow reference to other websites.

[tarheit]

Of course the results we are seeing from zillow are not just off $10k. They are off 30% or more (ok, that may only be 10k in some neighborhoods where the property values average 30k or less). It doesn't pay attention to condition, geographical area, foreclosures or other discounted sales and other factors. It may do ok in large uniform neighborhoods, but does very poorly here when there is a huge mix. You may litterally have a $50,000 property in the same neighborhood as a $300,000 property. It really skews the results.

It's 'tax assessors value' at the very least is out of date (doesn't match the current value according to the auditor (it's off by 12%). Plus it doesn't take into account that our autditor reportss 2/3 the appriased value. So zillows value of our home is 41% low! (It can't find any comparables which doesn't surprise me as it's a country home and there are few sales in the area)

-Tim

[Business_with_Greg]

Yeah I will meet whoever buys my house for what it says at the bank too. I paid 122,500 3 years ago and zillow says 174k. PLEASE! No Way!

[aprazma]

Zillow seems inaccurate within a particular neighborhood. In the same neighborhood, and even on the same street, Zillow has worse properties appraising at higher values than better properties. For example, a 2100 square foot house with a better location and pool appraises for less than a 1700 square foot house with poorer location, without pool. Obviously, the formula has not done any comparison within neighborhoods to validate their figures.

[joe harris]

Junk. If anybody wants to buy my house for what they say its worth, I'll meet you at the bank.

For the most part, I agree. However, zillow is getting more and more accurate. It is only a matter of time that it will hit the mark. the only thing that zillow will always have a tough time with is specific factors that affect home prices that are not factored in like proximity to a train, or noisy road.

[FlaRent2Ownguy]

Zillow for me in the Lease Purchase , Rent to Own business is simply a rough Idea, tool if you will. IN the S Fla market, they were low, now they are all over the map, as our market is going through changes BIGTIME.

Use Zillow, the way you use a quick Cap Rate on commercial property. 10 min estimate of whether or not you want to look at the deal further.

Good Luck.

[Rich_in_CT]

I've found Zillow to be dead accurate on some homes and off by tens of thousands on others. When shopping for investment properties its a great tool to see if the home is in the ballpark when shopping in a town I don't really know as well as my home turf but it certainly cannot beat good comps at this point in time. I'm hoping someday they improve the system and get the accuracy up but like the article says, a lot of intangible things come into play that Zillow fails to pick up on such as the actual neighborhood.

[jonlarsen002]

Does anybody suggest other online valuation sites or tools that might do the same thing but be a bit more accurate? Or is it just the sort of thing where online public info will only be semi-accurate?

[Alpharetta]

By their very nature it would be impossible for them to be accurate at all. I wouldn't even go as far as to say that they could be semi-accurate. It's just not possible because the way that public information is entered and accessed does not provide for good results.

Just call a realtor...Lots of them will do it for free anyways. Why go through the headache and misinformation?

[wikkideclipse]

By their very nature it would be impossible for them to be accurate at all. I wouldn't even go as far as to say that they could be semi-accurate. It's just not possible because the way that public information is entered and accessed does not provide for good results.

Just call a realtor...Lots of them will do it for free anyways. Why go through the headache and misinformation?

I agree, contact a realtor.

[Jaysonnhs]

This questions just came up last week in our office. We looked at several different sites that claim accurate instant appraisals and discovered that each had their own number and some showed differences of up to $60,000. I'm not sure where they get thier estimates but I've never known any of these services to be accurate most of the time. Basically, don't trust them and don't waste your time. Use a Realtor or Appraiser if you want something that you can count on - they can be fun though!

[72places-Dan]

Jaysonnhs,

Many of them tend to base their estimates on the sales of houses in the same geographic area, or neighborhood. The problem, especially in more expensive neighborhoods, is that most houses are quite different in size, layout, land, colors, accessibility, etc. These sites, such as zillow.com, really have no way to give an honest appraisal because of the simple fact that they cannot identify these differences.

Are these sites a good gauge for giving you a rough idea of what a house might be worth? Maybe. But why disappoint yourself? Why not get a real appraisal from a real appraiser?

Anyway, that's my opinion on the matter. :D

[Jaysonnhs]

72places-Dan,

Thanks for the info. on where these services get their estimates. I only know that we visited several sites and none of them gave the same estimate. I agree - use a professional when in need. Cheers!

[rob22911]

Zillow is hit or miss with me...I never can tell before hand if they are going to be close or not...there are too many factors without seeing the property itself..


(http://www.robsellscharlottesville.com)

[Deana]

The fundamental issue here is that the general public continues to use the on-line environment as a "do-it-yourself" alternative for everything. Shopping, research, and yes, real estate. We know Zillow may not be accurate because we have the tools to compare. But the public is looking for a way to avoid our services and as long as Zillow is perceived as accurate, it will succeed.

All of my listings on Zillow have no other comps. The neighborhoods are new and I agree with the other postings that it will probably get more accurate over time but will never consider all of the issues that go into a thorough comp.

But, again, as long as the confidence is there by the on-line viewer, Zillow will continue to grow and prosper. The better we understand these challenges, the better we can inform our clients.

[beer234]

I've found that if you live in an area where property tax value's are out of whack with real estate values than Zillow is next to worthless. In my area, homes are eight years old and have a mix of original owner and 2nd and 3rd owners. Thus the Zestimates are very erratic as someone who has been there 8 years is valued lower than recent moves and those who've finished basements etc. In the metro areas however I find it gets much tighter though no where near as good as a real CMA.

[sloraider]

Well I can tell you personally, that Zillow has my house at 872k and it just appraised 1 week ago for 648k so that is a fairly big differential.

[Business_with_Greg]

Well, that sure is a jump down.

[California-Appraisal]

I have yet to appraise a house where the value from zillow was within $30,000!

[MIAFORECLOSURE]

well they base their valuations on comarable sales, so I dont think they are very accurate.

[charlieberry]

Zillow is good to get in the ballpark, if you want to zero in on a value, stay the heck away from zillow. I hvae seen the numbers way off in that system before!

[R-Deal]

My feelings exactly.....got an appraisal on one of my properties two weeks ago for 77000.00 and I clicked on a zillow link today and it gave me 67526.00!!! That is quite a discrepancy..... So ballpark maybe....real usefulness, not so much.

[newagentfinder]

Seems like Zillow has a very wide range of values on there. For example, they say that a house is worth on the low end, $280K and on the high end $375K - big difference!

[fractional-homes]

My own personal house is off by about 30% in actual value - that means it is a waste of time. I have tried it on a few other houses and seen it be off just as much. The problem is that the information source itself is notoriously bad.

It is a hit or miss deal. In many occasions we experienced, the prices we close, but the question you always want to ask is: is it close enough? If the property's value is high, a 5% off can mean a lot of money.

[tsteuwer]

I always wondered if someone would ever study Zillow. I knew their pricing was right. My house is overpriced by 25%. If someone would actually pay that, I would be the happiest person in the world.

[RobM]

Here's an article from Wall Street Journal
http://online.wsj.com/article_email/SB117142055516708035-lMyQjAxMDE3NzExNDQxMjQwWj.html


---------------------------
http://www.metcapitalgroup.com
Commercial Direct Lender

You will need to look up the accuracy of the data on zillows site. They publish this data somewhere on their site so I would take a look if you really want to know for your area