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Hate Zillow? Do you really know why?

October 5, 2009

Does your 401k have an asterik like this Mr. Client?

Does your 401k have an asterik like this Mr. Client?

So many agents are quick to voice their disdain towards Zillow and for good reason. What Tech Savvy Agent wants to know is why do you hate them so much and can you back up your ill feelings with any data? Yes their info is inaccurate, which they admit, but what goes into their formula? Where do they get their info and how do they calculate a zestimate? What info do you have access to as a local agent that even a giant like Zillow does not?

If you can’t quickly and accurately explain these things to your clients and all you do instead is just rely on the old “their terrible” approach are you really educating your clients?

Today’s Tech Savvy Agents are building the value of getting local market info from them, not a national site, by exposing some of these truths which in turn leads to more transactions and referrals than the me-me approach of yesterday every day of the week. Tech Savvy Agents will check the links below to where Zillow admits their innacurate and explains their formula.

What a GREAT reason to call your clients and database. Walk them through how to get to these links from Zillow’s website and just let them know you wanted to touch base while the market is scary to make sure that they weren’t getting really bad information online!! You will be amazed at how much easier the conversation is when you have the visual proof from Zillow’s own website. Goes from a sales person calling to a consultant calling really quick!

Here is one agents take on Zillow. Watch this video, know thine enemy and succeed by leveraging technology! Enjoy and we hope we helped your business today.
If so please take a moment to subscribe to our RSS feed at the top of this page which will bring future blogs and discussions to you as soon as they hit the web!
Zillow’s Chart on “accuracy” by state and county
Zillow’s secret formula fully explained by Zillow themselves
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10 Comments leave one →
  1. Elaine permalink
    October 5, 2009 3:59 pm

    Thank you! I get this objection many times, “but Zillow says my home is worth this much…”
    From your chart, Zillow is 32% off! Which is exactly the percentage decline in the average sales price for the prior 12-month period ending August 31, 2009.

  2. October 5, 2009 7:08 pm

    Zillow zestimates are not information yearning to be free– they are computer generated valuations relying on public data that may be:

    1. inaccurate
    2. incomplete or
    3. stale

    They are made without physically examining a home and are subject to large errors.

    Inaccurate zestimates can be misleading admitted Spencer Rascoff in a comment on this post: http://bit.ly/GHLdX

    Now, some tech savyy agent will say “I don’t care because I will use my tech awesomeness to explain to clients why the zestimates can’t be trusted. I will even explain unzillowables.” http://bit.ly/4DkO2U

    Now, that sounds good on paper (or a blog) but because Zillow is online and buyers may be checking homes in their jammies at 1:00 am., you, Mr. Tech Savy agent, may NEVER get the chance to display your tech awesomeness because the buyer will have passed over your house listing with the inaccurate misleading zestimate. Pity.

    Do something right for home owners and petition Zillow for an opt-out of the zilly zestimates.

    • Tech Savvy Agent permalink
      October 5, 2009 7:51 pm

      Good points JF. Odds of getting Zillow to stop zestimating using a petition or otherwise? 0% They are the 2nd largest website in real estate behind only Realtor.com. There are so many agents who didn’t even know that those disclaimer pages existed until reading this blog so hopefully that helped a few agents out. We would also argue that you are right, you will never keep buyers or sellers in the information age from getting information from the web. Just make it a best practice to educate the ones you do engage with and to also feature some of these disclaimers on your local blog and agent website! Thanks for sharing, btw your blog looks great.

  3. October 5, 2009 10:33 pm

    Thanks for helping spread the word to other professionals that the accuracy chart is available on the site. (we are one of the only automated valuation sites that is upfront about our accuracy numbers)

    You asked for a formula, but that is hard to give you because there are over 300K+ ways that the Zestimate is calculated. There isn’t one formula that we use consistently across the US, we couldn’t because there are so many varying factors from county to county.

    Here are 3 things we try to do to help:

    1) Typically near the Zestimate is a Value Range. This range varies based on the median err rate. If a Zestimate were an exact science, there wouldn’t be a need for a range.

    2) A homeowner can ‘claim their home’ and add/edit/change information. They can choose to make this new info public. If they do choose to do this, we’ll publish it along side the public records. The owner can also publish a ‘My Zestimate’. If the owner changes home facts (say public records has 2 bed, and the owner says no it is 3), the Zestimate will be recalculated. This recalculation happens 3 times a week.

    3) Agent listing data can make the site smarter. Similar to the second point- say the records have 1000 sq ft. Then the agent posts the home for sale on the site and listings data says the home is 3000 sq ft. When we learn about this updated home fact, we assume the agent is more accurate than the county records, and again we’ll recalculate the data. Also the For Sale price is then the only number one sees in the search results and at the top of the property detail page.

    At the end of the day- the Zestimate drives traffic to the site and agents want the biggest audience possible for their listings and consumers feel empowered if they have information. Of course they need an agent to best know how to interpret this information.

    Hope this was helpful!

    • Tech Savvy Agent permalink
      October 5, 2009 11:13 pm

      Would love to hear what the agents think of the response Sara. GREAT to hear from Zillow directly and I think there are a ton of agents that will be eager to let you know whether the traffic and eyeballs that you guys get helps them or hurts them…

  4. October 6, 2009 12:39 am

    1. Why does the zestimate get top billing and not the range? Plus, the zestimate gets a nice graph, not the range.

    A “group” median error rate does not help determine the error rate on a particular home.
    2. If the median (middle) error is 7%, is it not possible the error rate on a particular home is 25%? Statistical sleight of hand.

    If owner adjusts data and raises zestimate, they could also raise their taxes (cut to tax man grinning that you said you had 3 bedrooms instead of 1 as he adjusts your tax bill).
    3. Rich Barton didn’t adjust his zestimate until he put his house on the market, true Sara? Smart.

    Spencer Rascoff said in a comment that an inaccurate zestimate can be misleading.
    4.Do you agree, Sara?

    5. Do you think misleading information should remain on a home for sale listing online?

    • October 7, 2009 11:22 am

      Looks like Sara bowed out of the conversation…Or you scared her away with your amazing analysis of their slight of hand. Thanks for contributing!!

  5. October 7, 2009 3:03 pm

    Sara is a lovely and intelligent person. I regret she did not address the questions.

    The follow up questions I have for Spencer Rascoff are:

    If an inaccurate zestimate can be misleading, why should it remain on a home for sale? Why is it more beneficial to have an inaccurate zestimate on that home? I don;t see how misleading info can facilitate a sale.

    What is the fear of an opt-out?

    If homeowners love Zillow and their zestimates, an opt out would have no meaningful effect, right? ( other than the perception that Zillow cares about homeowners, which is a good thing)

    Thanks Tech Savy Agent for raising important issues in your post.

  6. October 15, 2009 7:54 am

    Jf nails this on the head. The county I do the most work in has a Zestimate accuracy rating of 4 stars, yet their admitted score for within 5% of the Sales price is less than 30%.

    Thanks, TechSavvy – for giving us an awesome tool to immediately re-focus our Sellers on the accurate pricing strategy only our “boots on the ground” can assess.

    Navy Chief, Navy Pride

  7. November 20, 2009 7:10 am

    I know there are many reasons not to condsider zillow when evaluating a homes price. Here is one reason I always include it in the Market Analysis – THE CONSUMER IS LOOKING AT IT!

    If your CMA and additional price evaluation information leads to pricing hte home at xxx, you need to consider what the buyers are using to evaluate the price, zillow. If the zestimate is off, make sure the home information on zillow is correct, add features and leave remarks as to why the home is worth more than the zestimate.

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