I don’t hate Zillow, I swear. In fact, I advertise with them. And as Alma suggested, maybe the title was a little harsh. You know, I use Zillow from time to time to estimate rents, since I don’t track the rental market and sometimes I need a little help there. But if you’re going to rely on Zillow – or any online pricing site – for accurate numbers, reconsider. They’re just not accurate, yet. So in reality they don’t suck, they just provide a product that’s become seen as truth when it’s really just the result of a proprietary formula.
An inquiry recently came in regarding 401 Craig Drive, in Blacksburg. It’s a great house, and the owners have really taken the time to make this house shine. Listed at $299000, we had somewhere in the neighborhood of 20 showings over the course of 30 days, and it went under contract just a couple of days before this customer wrote in. Sellers are happy, buyers are happy, we’re moving on through the inspection process. When the inquiry came in and I was talking to this person on the phone, however, he said something that made me cringe – he told me “I see there’s been a $25000 price reduction on Craig Drive, I was very interested.” When I asked him where he got that information, he said Zillow.com.
Here’s where automated value sites like Zillow cause problems as a source for accurate information.
The above screenshot is from the listing for 401 Craig Drive on Zillow – you can also see it here.
- Recently Sold – 2009 isn’t recently sold. No matter how you look at it, 2009 was a while ago.
- 30-Day Change – a $7300 price drop over the last 30 days? When nearly 30% of the market in Blacksburg during that same time had sold, or gone under contract?
- where’s the $25000 price change?
I get it, maybe this customer was “misremembering”. Mistakes are made, and I get that, but to use an online valuation site to determine whether or not a property is priced correctly, or is moving within the framework of the market, is going to steer you wrong. Zillow’s “What is a Zestimate” page used to say that the Zestimate could be used for negotiating, while today that page references that it’s simply a proprietary estimate, and to use real estate professionals in researching homes. That’s a good idea.
Here’s another example. Look at the page on Zillow for this home, and now this home (full disclosure, the house at 1717 Honeysuckle was my personal home last year). Two houses adjacent to each other in reality, but online they’re in two completely different areas. Accuracy matters.
I’m not killing Zillow – they could care less what some real estate goof in Blacksburg VA feels about their site, I realize that. And I’ll continue to use their site as a way to reference and cross-check things I’m looking at. I’ll do the same for Trulia, and Realtor.com, and a handful of other sites I visit when researching properties. At the end of the day, however, the best way for me – and for you – to study the true value of a home in the New River Valley is to work with an agent, and get inside some homes. Self-serving? Yes. But as much as I love technology, there’s no better way to search for real estate than to eventually put the key in the door and to go inside.
Zillow, I don’t hate you. I just wanted a title to raise some eyebrows.