Understanding Zillow?

Question

I've read that its a good source to find comps. in the area of your property, but not to trust the values given. Does this refer to the values the comps sold for? or the "zestimate" of your property based on these comps?

Will Barnard · Answer

Either way, Zillow, BPO, or others are ALL just OPINIONS. The only fact that matters is to run true and actual sold comps. Can you use jsut the high ones for your sell side, of course, can you use just the low ones for your buy side, of course. Take these factors into account and get ALL the true sold comps to evaluate the low end value and the high end value.

This will be the only ACCURATE way to valuate a home in this market.

G Simpson · Answer

I find zillow to be a major overestimate in the west phoenix area.  I find that "eppraisal.com" is much closer to true values in my area.

Robert Pickett · Answer

Do anyone use investway comps service?

Matthew Green · Answer

Then ill go and check out the recently sold and selling homes around the area. This will obviously give me a more realistic yet ballpark figure. thanks again.

Jon Holdman · Answer

I think the idea behind Zillow is valid.  This "supercrunching" idea is being applied in many places with good success.  Even in some applications where human expertise was viewed as essential, automated calculations are proving more reliable.  Check out the book "Supercrunchers".

But, as Jeff says, GIGO.  The problem I see with Zillow or any sort of automated evaluations is that it doesn't really have enough data.  Seller concessions are just one piece.  Another is REO sales vs. retail sales.  Around here, whether or not basement square footage is properly included is very hit or miss.  Public records are often wrong for beds, baths, square footage and finished square footage.  How can a calculation even be correct without good data?

OTOH, if a BPO or appraisal uses three or four comps, its pretty easy to make it say whatever you want by choosing the correct comps.

Jeff Tumbarello · Answer

Lots of the wholesalers/looters here in SWFl used Zillow to sell their contracts. 
            
            If given the time I would love to figure out the math behind zillow. It would be a great tool to use. I took a course on Risk Management/Finance just to understand what the Corp types factor to, to better position myself.
            
            the key to getting good numbers is good data.
            
            Garbage in Garbage out
            
            What if you comp in Market with heavy seller  concessions without factoring those in. You would be toast when the other 6 percent needs to be shaved off to sell the home. I do not think Zillow captures those facts.
            
            I have an excel doc with ever sale in it back to 1999. It saves me from myself.

It is all about the right data and feet on the ground

FYI, zillow sells trigger leads, meqaning when you input an address, it pops up on their radar screen

Joshua D. · Answer

Zilllow and other valuation sites have very clearly written in their disclaimers that their site valuations are not a replacement for true comps (paraphrasing).  Listen to the pros, and don't rely on a website to do your work for you.

Jon Holdman · Answer

That's not the best comp, since its fewer baths, beds and size.  Condition is a factor, too.   Nevertheless, its a clue the one you're considering is a good deal.

Do you know the area?  Even though its close, there could be radical differences that make this not a good comp.  For example, there are newly built houses near my farm area.  These sell for 3X or 4X what houses in my farm area sell for.  Yet some of these may be only a few blocks away, and have similar beds, baths, and square footage.  No appraiser would consider either set of properties as comps for the other.

Will Barnard · Answer

I usually make sure my comps are of equivalent bed/baths and most importantly, are within 20% of the square footage of subject property.

Understanding Zillow?

Most Popular Reply