Ask any real estate agent about Zillow [or his brothers Trulia and Realtor.com], and you are likely to get a strong reaction. There are several sticking points, but the one you will hear from almost every agents is . . .
“Zillow Zestimates® are just plain wrong!”
Do they have a point? Are Zestimates® a true reflection of a home’s value? Should sellers do Private Listings and just use Zillow to set the price? Well, yes and no.
First of all, let’s start by clarifying what a Zestimate® is. From Zillow itself
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.” [emphasis mine]
That last line is the important one – a Zestimate is a starting point in determining a home’s value. Zillow takes all the home sales in the area and plugs them into it’s big computer program, which spits out an estimated market value. It does that from 3500 miles away, in Seattle. No matter how big a telescope they have, they don’t know our neighborhoods. They don’t know things like;
- The county just changed school attendance zones, so your house is now in a better school district
- The shopping center down the street just got a new Wal-Mart and it is expected to draw other businesses tot he area
- The proposed route for I-540 goes right through my subdivision
- We just spent $50,000 renovating the kitchen – granite countertops, stainless steel appliances, the works!
- My neighbors were really desperate to sell, so they could get to the new job. They sold for cheap just to move quicker!
- My house is right at the entrance of the development, so everybody’s car comes past my driveway at rush hour.
Each of these items could swing the value of a home by thousands, even tens of thousands, of dollars. And they are all things Zillow has no way of knowing or properly adjusting for.
So what can you do as a homeowner? Sure, look at Zillow. Get excited about how much your home has increased in value. But stop and ask yourself “what makes our home different than the average Durham home of our size?” Better yet, find a Durham Realtor and ask him what makes your home different. He lives in the area, so he can see the things Zillow can’t see from Seattle. You’ll get a better picture of your home’s value plus a plan to achieve that value.
Again, Zillow is the starting point, and just the starting point, of a journey. With some good guides, the journey can be enjoyable and profitable.
[Full Disclosure: I am a Zillow Premier Agent. That means I give them money, and my contact info appears alongside listings in certain zip codes. It's an advertising vehicle]