The spring real estate selling season is quickly approaching us, and home values are steadily on the rise. With the continued activity in the marketplace, a number of people will be placing their properties on the market and/or searching for a new place to call home. Today’s consumer has become very knowledgeable and savvy, with many turning to the web to educate themselves on the area and what pricing looks like. With so many choices of which web site should be on your “favorites” list, as with most things, some are far better resources of information than others. One of the more popular, yet most unreliable, is Zillow, and it offers information that could potentially cost a consumer tens of thousands of dollars.
On Zillow’s site, it pretends it can do a market analysis of your property called a “Zestimate®.” Coincidentally, Zillow openly publishes the accuracy of the “Zestimates”(1). As a local example, Zillow says its accuracy level for Alachua County is plus or minus 7.9 percent. So, on a $300,000 home, your Zestimate will give you a number between $276,300 to $323,700. If you rely on this site as the end-all, as some do, you can see where thousands of dollars could be lost if your number comes out on the lower end of that spectrum; conversely, if you should list your property too high, you potentially lose out on buyers, thus costing yourself time and money. Taking the statistics a step further, 17.3 percent of local property Zestimates have an error rate of 20 percent or more — an unimpressive number to be sure.
So, why is this? It’s virtually impossible for a computer program to catch every little nuance of a local market and then use that same program, and its fancy algorithm, to compute prices in another entirely different market. In reality, to accurately price your property, it necessitates local knowledge of school zones, land-use changes, proximity to amenities and a host of other variables that can swing prices wildly.
Furthering the issue, Zillow’s unreliable property data is also troublesome. Portals such as realtor.com® and local real estate company websites have up to 20 percent more MLS listed properties than Zillow does (2). So, in other words, if you are doing home searches on Zillow, you potentially aren’t seeing every property on the market and are ultimately missing your dream home altogether. Equally frustrating, as for the ones you do see, information is quite frequently inaccurate and, in some cases, the properties on Zillow aren’t even properties that are actually for sale. All of this leads to frustrations for buyers and sellers alike.
In summary, when dealing with your most prized possession, be sure to use a well-experienced and seasoned real estate professional, whether it be a Realtor or appraiser, to assist you in accurately pricing your property in order to maximize your returns. Do not rely on a Zestimate to even give you a ballpark figure, as you will cost yourself both time and money, and when buying property, go to a local brokerage web site for the most up-to-date properties on the market.