Should You Stop Searching For Real Estate On Trulia and Zillow!?

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Most real estate investors are obsessed with finding the next great deal.  So much so that they stay up into the wee hours of the night scouring the internet for properties, sometimes in far away cities, so they can generate excel charts full of data and analysis.  As real estate investors know, our livelihoods depend on the accuracy of the data we analyze and for that reason I’m begging you to PLEASE stop searching for real estate on nationwide portals like Trulia and Zillow!  For the past 12 months brokerage after brokerage has decided to withdrawal their listings from the nationwide real estate search portals citing, among other things, horribly inaccurate information.  Here are some reasons why the real estate investor, in particular, should stay away from these websites.

Slllloooooooowwwwwww Real Estate Search Results

National portals like Trulia and Zilliow are slow to show new listings.  When a property is listed for sale it hits the local MLS in a matter of minutes, usually about 15, but can take as long as 9 days to populate to nationally syndicated sites according to studies on the subject.  To real estate investors ready to pounce 9 days might as well be 3 months.  By the time the investor sees the listing, sees the property and submits an offer sufficient time will have passed that there could be one or more competitive bids or quite possibly the property could have sold already.  A seasoned real estate investor knows how important timing is and getting all of your real estate listings even 24 hours later than your competitors will cause you to miss out on great deals.

Bad Data

The real estate company Redfin was hired recently to assess the accuracy of sites like Trulia and Zillow and their study found that approximately 36% of the listings shown as active on Zillow and Trulia were no longer for sale in the local MLS, compared with almost 0% on local brokerage websites.  The study further found that brokerage sourced listings using their local MLS feed displayed 100% of the MLS homes listed for sale on their websites but Trulia only displayed 81% and Zillow 79%.  So let me summarize – over 1/3rd of the listings you are seeing are NOT ACTUALLY FOR SALE and you only get to see 4/5th of the listings that are actually for sale.  LOL.  I could go on but really there’s no need.  Obviously anyone searching for properties in a city would like to have access to all of the listings that are for sale and none of the ones that aren’t.

Misleading Advertising

Another common complaint from users of websites like Trulia and Zillow is the misleading nature of their advertising of listings.  Real estate agents are allowed to purchase advertisements that appear prominently next to listings that ARE NOT theirs to mislead the buyer into contacting the advertising agent while the buyer mistakenly believes they are contacting the listing agent.  Some buyers would prefer to purchase directly from the listing agent because they feel he or she is more knowledgeable about the property and because the buyer may believe it is possible to negotiate a larger discount when dealing directly with the listing agent who may be willing to cut commission to make a deal happen.

What’s My House Worth? (Don’t Ask Zillow)

I considered writing an entire post of the accuracy…or inaccuracy, of real estate portal pricing tools like the famed Zillow Zestimate.  For those who aren’t familiar with Zillow the website offers an opinion of a listed house value called a Zestimate and it is prominently displayed on each property’s listing page.  Sounds great right?  Unfortunately the Zestimate values aren’t even close to the actual values that the properties sell for.  If you’re wondering how I can be so sure it’s because, to Zillow’s credit, they actually publicize the accuracy of their Zestimates city by city. To measure the accuracy of the Zestimate Zillow compares the actual home sale prices of homes with their Zestimate and they’ve found that the Zesimtate is within 5% of the actual sale price around 33% of the time and within 10% of the sale price around 50% of the time.  The actual data for each city can be found here.

What To Do?

For real estate investors in need of accurate and timely data national search portals like Trulia and Zillow are not as reliable as other options available.  Instead of searching for properties on these websites real estate investors should focus on smaller, local brokerage based websites, establish relationships with local real estate agents or get a real estate license and pay to join the local MLS where they invest.  These steps will assure that you are getting the most accurate and up to date information and will give you a competitive advantage over those who are searching for real estate with websites like Trulia and Zillow.

What do you think? Do you use Trulia or Zillow in your business?

Data Source: http://www.inman.com/news/2012/10/3/redfin-study-knocks-zillow-trulia-listings-accuracy
Photo: JR F

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About Author

Frank L. DeFazio sells Philadelphia Real Estate and Philadelphia Condos for Prudential Fox & Roach in Center City Philadelphia. Frank is a real estate agent, investor, developer, and founder of the CenterCityTeam. Read more from Frank at his Philadelphia Real Estate Blog

145 Comments

    • I couldn’t disagree more. I agree that the info can seem old when housing prices are dropping fast – it seems like Zillow is about 3 months behind.

      But a lot of these Zillow is bad posts come from disgrundled real estate brokers who no longer can present outrageous estimates to homeowners trying to get their business.

      Sure your home is worth 400K – well Zillow says 300K – it could be off by a bit, but what would make my home worth 100K more – usually folks that do things to their home, heavily advertize the fact. This was a short sale, we put on a new roof, flooring, kitchen, windows, got rid of the hideous smell so we think it really is worth 400K instead of 300K that is posted.

      Well that is fair, and something to consider, but it is certainly not something to blame zillow about.

      • You ask what can make the home “worth $100k more.” In many cases, it’s because Zillow is reflecting values well below the true market value.

        A recent listing of mine in Mesa? Zestimate is $121k. FHA appraisal came in at $150k.
        Another listing in Peoria. Zestimate us $168k. Actual sales price is $187,500.
        Another recent sale in Peoria. Zestimate is $138k. Appraised value? $172,000.

        On the two listings, it wasn’t an issue of the home being worth more than market value and viable comps suggest as evidenced by the appraisals. It’s a question of the Zestimate being 20 percent inaccurate.

        I get the impartiality argument. Magic 8 balls also are impartial and about as accurate.

        • As a former broker, but current owner of 4 investment properties, I have been on both sides of this argument myself. I do agree that the Zestimate is not an accurate reflection of “Real Value”, but of course, how many times have we given someone an estimate and expected that person to hold us to the estimate to being a fact?

          The reality is, in real estate, value is always somewhere in between what someone is willing to pay and what someone else is willing to appraise a property for. So, the real value of any home will have a certain degree of variability in it. Zillow can’t accurately predict or take into account quick changes in market dynamics, like low (or high) inventory.

          The truth is all of this is also true for rental estimates. Inaccuracies exist and I know for a fact the rent estimates expect my properties to be in a certain order from highest to lowest rent, but after renting them all for 7 years, I know which ones are higher than others. There is no way for me to input the actual rental amounts I received each year, which would probably help them determine the proper rent.

          With all that being said, a casual person can get a quick glance at value, or rental price, in mere seconds. This is very useful. Can a broker or agent provide more detailed and accurate information? Sure. But the reality is, most agents wouldn’t be able to spit out this type of information in seconds and let you go without a discussion on how they can “help” you.

          So, for tire kicking, getting a quick understanding of “value” and the like, Zillow is still an awesome tool. If you are looking to buy or sell a home, you should be talking to a GOOD agent. If you are renting a home, well, let’s just hope you find a good property manager or landlord.

      • Trulia’s site is completely publishing inaccurate information. They claim it is public record information, but the information that is totally and completely inaccurate is NOT public record. And the valuation of your property is also inaccurate. DO NOT USE TO LIST A PROPERTY OR SEARCH FOR A PROPERTY, MISLEADING INFORMATION THAT WILL HURT YOUR PROPERTY NOT HELP IT.

    • Zillow is soooo lazy. I finally got in touch with them and they said they would correct an error noted in a sale of a home that I now own. Instead they just said the sale was cancelled. I gave them all the info and the number of the town hall.

    • I completely agree with the points in this article as I have had to contact Z twice now to tell them that some unknown property manager has incorrectly listed the house I am currently living in as being for rent and posted strange interior photos of a house, changed the description etc… I do not feel safe when they encourage people to rent the house I live in. I worry it adversely effects the resale value of my property. It has happened to me twice now.

  1. Great article.

    I agree very much with the point of the other agent ads that mislead buyers to click and use the ad agents and not the original agent. Most users don’t understand the ad space in zillow and google especially with their subtle ways of showing its an ad.

  2. Zillow misleads the many newbie and inexperienced investors by showing over-value or under-value. They have wild % fluctuations on valuations for whatever their internal robotic software code is programmed to do. Unfortunately, true property valuations cannot be robotically calculated by software. Real Estate is a business of geography, demographics, neighborhood, quality of construction, repair requirements, taxation, etc., etc. You can’t code this! Software geeks who think this can be done should choose another venue.

    We have one property that we are rehabbing at this time that has an appraisal of $300k+ after we are done. Zillow shows less than 1/2 of that valuation. We laugh, chuckle and feel sorry for the inexperienced people who take Zillow at its’ word. Far from it, Zillow should remove their valuations as they serve absolutely zero purpose because they’re not even close a large percentage of the time.

  3. Hello, Jay T from Zillow here!

    If I may, I’d like to make a few comments…

    Frank, you said, “The real estate company Redfin was hired recently to assess the accuracy of sites like Trulia and Zillow and their study found that approximately 36% of the listings shown as active on Zillow and Trulia were no longer for sale in the local MLS, compared with almost 0% on local brokerage websites.”

    Actually, it was Redfin that commissioned the WAV Group to make the study. Just a couple of things to keep in mind: 1) the study was a sampling of selected zip codes in select markets. While thorough, it was still a small sample. The study fails to mention that there are also many homes for sale that aren’t shown on the MLS, but are shown on Zillow (FSBOs, “Make Me Moves,” new build homes, and pre-market foreclosures often do not appear in the MLS).

    As for “misleading advertising”, Zillow prominently displays the listing agent, at both the top and bottom of the page, their contact info, access to their profile, and the listing brokerage’s name and number. All for free to the agent (they do NOT need to be a Zillow Premier Agent for this. They just need a free Zillow profile).

    Home value estimates are, as you pointed out, displayed on all properties, and also as you point out, we are completely transparent about the accuracy of these estimates. Accuracy varies depending on many factors, including how much public data is available in any given area. The Zestimate is a good starting place for determining home valuation, but was never intended to replace a professional evaluation.

    The advice to use a local agent/brokerage site is solid. But, as a former real estate brokerage owner (and as a current Zillow employee) I think the savvy investor would use ALL available sources to look for and research property. You may just find that investment gem has never seen the light of a MLS or agent/broker site. Zillow offers many potential listings and a lot of other info that isn’t typically available on broker, agent, franchise, or public MLS sites.

    • If it isn’t the Phoenix Real Estate guy in person! Congrats on the new job with Zillow and thank you for your post, it is greatly appreciated!

      Something tells me you’re familiar with this study and I checked and you are absolutely correct that it was a Redfin commissioned study and not a study performed by Redfin. I will try to have the post updated so thank you for the clarification. According to the study the WAV “analyzed a sample of 6,401 home listings in 33 zip codes from 11 metro areas.” Do you feel that the study was unscientific, unreliable or yielded results that don’t accurately reflect Zillow’s listing accuracy or listing speed?

      As you know Zillow and others have been long criticized for misleading advertising. What happens to the listings whose agents have not registered for the free Zillow account? At one time that space was rented to agents willing to purchase the space. In those instances the consumers could be and often were tricked into thinking that person was the listing agent. Is that not the case anymore with Zillow?

      I considered writing an entire section on Trulia/RealtyTrac and Zillow’s Foreclosure Center. The “pre-foreclosure” listings that are not actually for sale are often/always included with homes that are actually for sale on the MLS. Obviously this can be confusing for consumers who don’t understand the foreclosure process and to me this undermines the argument that Zillow has listings that are not available on the MLS. I’m not familiar with this particular part of Zillow but FSBO and new construction homes not listed on the MLS would be valuable if the listing data is accurate.

      Unfortunately I have to respectfully disagree with you with respect to the Zestimate. I think the Zestimate does a great disservice to the entire real estate industry and it should be removed from Zillow entirely. As we both noted the accuracy does vary by city but not being within 5% of the sale price about 33% of the time and not being within 10% of the sale price about 50% for most cities is not very good. All of the data I’ve seen shows the average list price to sale price ratio ranging from 97% – 90% in various localities. If 66% of the time the price estimate will not be within 5% of the eventual sale price and 50% of the time it will not be within 10% of the eventual sale price don’t we have to ask what value this pricing tool has for the consumer? Maybe you can persuade me and explain what the value of the Zestimate is? How is it a good place for starting to determine home value if it can only get to within 20% of the eventual sale price with any regularity?

      You are 100% correct that investors and consumers should use all resources available to them and my objective in writing this post was just to open their eyes to of some of the limitations and shortcomings that sites like Zillow currently have. Either way I have a immense respect for you and everything you’ve accomplished for the real estate industry and I genuinely appreciate your thoughtful comments.

      • Thanks Frank!

        “Do you feel that the study was unscientific, unreliable or yielded results that don’t accurately reflect Zillow’s listing accuracy or listing speed?”

        I think the study was pretty well done. I haven’t cracked a stats book since college, so I can’t speak to the statistical significant of it. Obviously it’s a sample, and it may well be “statistically significant”. But we all know how local real estate is, not just within a Zip Code but sometimes even across the street.

        “What happens to the listings whose agents have not registered for the free Zillow account? At one time that space was rented to agents willing to purchase the space. In those instances the consumers could be and often were tricked into thinking that person was the listing agent. Is that not the case anymore with Zillow?”

        Some agents without profiles will be in brokerages with agreements as to how their listings are identified. Some won’t. In those cases, yes, paying Premier Agents are shown by the listings. They are tagged “Premier Agent” and listing agents are tagged “Listing Agent”. There’s certainly no trickery intended. Maybe we should take a look at better agent identification. We’re always looking at improving the “user experience,” I’ll add it to the list!

        We’ll probably just have to agreed to disagree on the Zestimate, it could be debated for days. It’s clearly not immune to debate. There’s no way an algorithm will ever replace a trained professional’s eye or experience. I see real value in the trend data as even if the precise value of the home is questionable, pricing trends over time, which the Zestimate can provide, is of interest at times.

        Thanks for the kind words!

    • Jonathan Dalton on

      It’s not “accuracy” when it’s wrong as often as not.

      As we have discussed elsewhere, in metro Phoenix, Zillow is accurate roughly 25 percent if the time.

      By definition, a “ore market” foreclosure is not a home for sale. It’s pre-market and may not reach the market for a number if reasons. Similarly, Make Me Move listings can’t really be considered inventory as the asking prices have no basis in reality.

      Between the delayed (if ever arriving) data, the false listings, and the inaccurate valuations, an investor or regular buyer using such information will waste considerable time sifting through the problematic data to get to the real stuff.

      Note, Jay … It’s not just agents who are saying the Zestimates are a disservice. If Zillow wants to be a big boy real estate portal, it ought to act like one.

        • Jonathan Dalton on

          Truth be told, Frank, I have no more interest in helping Zillow than I would help a squatter who took up residence in my living room put their bed together. An interloper is an interloper.

          If a company decides to enter the real estate space, the hope would be that it would add value. Zillow doesn’t do this, unfortunately. Yes, it has a slick mobile interface and a tremendous pr machine that essentially protects it from any serious look at its data. But that mobile interface leads to widely inaccurate, untimely, incomplete listings data and somewhat fantastic (in the other sense of the word) Zestimates.

          “We are here, now help us get our data right so our stock options all go through the riof” isn’t a pitch that would cause me to help. All Zillow has done us make out job as agents that much harder as we have to explain away the numerous errors.

  4. I have used Zillow a great deal for quick research to get a ballpark idea on a property. I don’t shop on Zillow for MLS properties rather the ones missing from the MLS. I just yesterday used Zillow to provide some baseline data for a property estimation bid. I was able to show that the 20 similiar properties sold in 2012 sold for 91% of the Zestimate compared to 93% the year higher.

    Zillow of course cannot account for damages or repairs because it lacks that data but it is a great tool if used correctly, in my experience.

    • Actual sales figures and ZEstimate are two vastly different things. Actual sales have value. ZEstimate does not have any value to an investor or a homeowner. I’m not a real estate agent, but am an investor and if I need comps, I look them up. A homeowner should most importantly speak to a realtor to get help in valuation or look up recent sales, but at the same time must bear in mind that they are truly looking at apples to apples. A 1,500 sq.ft. home that sold for $50k and another one that sold for $150k in the same neighborhood in the same time period are not comps. Those that didn’t understand my last sentence really should speak to an agent.

  5. Zillow isn’t something that I use. Irrespective of the report about the age of its data, I find that the site has too much data from seemingly disparate sources and that makes it cumbersome and hard to navigate for this investor. I have always been an early adopter of good technology and it’s suffice to say that I rely a good bit on data that I cull from internet sources, but at the end of the day, I rely mostly on my experience and instincts to get results – if it’s too hard too figure out, it most likely isn’t a good deal any way. Basically, I am so experienced that I don’t need copious amounts of data to arrive at proper valuations or to figure out the wholesale/retail margins within the context of those valuations. I imagine that Zillow and other consumer-level sites are good for REI novices and others without experience to use as a means of developing baseline intelligence and learning about available inventories,as well as an advertising and lead generation tool for brokers. To each his own though. I don’t know everything…just how to work within my own system.

  6. I agree that data is pretty bad on those sites mentioned. early in my rei data gathering n analyses, I quickly learned garbage in, garbage out, and that meant excluding data from those sites for finding properties. that said, sites like zillow n trulia cannot be blamed for their opinion (estimates) no more than google can be blamed for finding restaurants and other businesses in the real world. there is a vast array of data sources that we can go to. I don’t agree that zillow tries to fool ppl about their site n data, etc. as a business they need to focus on the user experience and they have plenty opportunity for disclosures about their listings n how they crunch data. it’s just very easy for us to gloss over the disclosure text in search of the key words n numbers of the next hot deal.

    as u had mentioned and I think other investor users of the site will too… zillow, trulia, n the like will lose credibility if they don’t clean up their data n analyses to reflect what the market is really doing. the great thing about capitalism n business is that if u don’t get w the program soon… someone will pick up the slack n get it right real quick. maybe just not (yet) quick enuf for some ppls preferences tho ;)

    but ya… in today’s rei, bad data from certain regions from portal sites is just part of the newbie investors’ learning curve. and again, Darwinism (capitalism?) in business will weed out those that don’t get w the program..

    happy holidays!

  7. My wife and I have used Zillow extensively over the last 6 months to find a home to buy. (We just closed today!) and I have also tried many local brokerage sites. At least in my market (and every other one that I have ever seen) local brokerage sites suck major bom-bad. Basic search tools are missing (Many lack the ability to search based on a lot size, for example- this was very important to us. They all lacked something essential). Zillow presents data on properties in a far superior format to any local brokerage sites (and by far better than the MLS systems I have seen). Zillow also has saved searches, bookmarked homes, and other features that make it superior for home buyers. If I had access directly to the local MLS, I may have used it. Certainly, when I begin looking for investment homes, I would love to have direct access to MLS, because your article hit the nail on the head with the whole timeliness of the data thing- I don’t know how many times I’ve contacted my agent about a home to find out it was already under contract or sold. In some cases, properties have remained on Zillow for months after they have already sold.

    My wife and I found the home we bought today on Zillow, and we love it. I will continue to use Zillow for the foreseeable future. At least until the quality of other alternatives increases drastically.

    Another note regarding Zestimates- I have never expected a Zestimate to be within 5% of the sales value on a single property. I generally only look at the Zestimates across a neighborhood or area of town to see what the general values are in that given area. This way I can tell if a house is priced significantly below the Zestimates of other houses in the neighborhood. I could care less what the Zestimate is on a given home I may be interested in. I think Zillow makes it very clear on their site what a zestimate is and what it is based on. I also think they make it fairly clear who the listing agent is, at least after you have looked at a few listings. (Perhaps they could do better in this area).

    Over all, Thank You Zillow folks for creating an Awesome website! All you brokers and agents out there with your own sites- if you don’t like Zillow, get to crackin- it ain’t that difficult to build a decent site!

    • Well James, congrats on the new home, and thanks for using Zillow, it’s appreciated! The “user experience” you describe is important to us. As is accurate and timely data, which we are always working on improving.

        • I assure you, I am very much a real person. It does appear that a very old twitter account I had setup has been taken over by a spambot. Thanks for pointing this out, I will see if I cannot remedy the situation. I experimented with Twitter in the past and found it to be mostly useless.

        • SPAMMER! … how could you? writing a paragraph of gibberish… i KNEW IT!

          happy holidays, “James”-bot

        • James, the link in your Gravatar was broken too. Maybe I’m the only one who vets blog commenters before engaging. Perhaps I spammed myself here? We may never know. Carry on

          Happy Zolidays! -Greg’s autoresponderbot

      • Spencer – thank you so much for commenting!

        I’m sure everyone would love to hear your take on some of the other issues being discussed like the value of the Zestimate for consumers, inaccurate data for both properties listed on MLS and properties not listed, and confusing agent paid advertising practices?

        • you can do a search on their site and they’ll explain their data procedures and accuracy issues to some extent. here’s an example:
          http://www.zillow.com/howto/DataCoverageZestimateAccuracy.htm

          I don’t think they try to hide anything. however, as mentioned earlier, if their service/data becomes too inaccurate or problematic for the majority of users, it’s only a matter of time before someone else will get it right and take over. altho, when you’re dealing w/data across the nation in sooooo many different markets, you’re bound to have pockets of inaccuracies by varying measures.

        • As I said above, I am indeed very much a real person. Thank you for pointing out that my old Tiwtter account had been compromised- I logged in and cleaned it up, and strengthened my password. Apologies for any confusion the Twitter account may have caused.

  8. I agree with the author that Trulia and Zillow often provide inaccurate data, however they also provide a great arena to locate homes where other avenues that are pay only sites that DO offer accurate data like RealtyTrac dont. What alot of my investors do is find a property their interested in and then either contact me or look it up themselves on RealtyTrac to get the real information. Long story short… Zillow and Trulia by themselves are not very helpful but when combined with other avenues they can prove to be a great resource in an investors arsenal.

    Jason Thoele

  9. Agreed! I can’t tell you how many times I’ve had a client ask us to show a particular house they found on Zillow, and I have to explain to them, it’s sold, or in preforclosure and not for sale. I will admit Zillow and Trulia have both improved in accuracy over the past few years. Although, your local real estate agents will always have the most up to date info connecting right to their MLS systems.

  10. People, don’t buy into a Realtor bashing their competition-Zillow. Sorry Frank, but you use several fallacy filled arguments–including the Straw Man –to bash the first major threat to Realtors ever: transparency and open information. While it is true that Zillow is not a good tool to find a property when it first hits the MLS, this is because Real Estate Brokers have monopolistic control over this information, and they give enough to Congress to avoid anti-trust laws. Zillow uses big data to estimate its valuations. I will take this any day over my agent. broker, or Lawrence Yun telling me ‘now is a great time to buy.’. The fact that they are open about their margin of error is a good thing. My real estate agent–who I trust to be a good real estate agent– hates zillow as well. This further validates my belief that it is a good source. Real Estate Agents can cherry pick ‘comps’ to move a valuation in the way they want it to move. Zillow does this same thing but on a massive scale. Anyone who understands stats gets why this is important. Again, get a good agent. But be wary of anyone who thinks less information is better than more. And that is what Frank is telling you–trust Realtors and only Realtors.

  11. Thanks for the post!

    Unfortunately those arguments don’t make any sense b/c Zillow’s own data didn’t prove that the zestimate is a terrible indicator of a properties estimated value. They grade themselves and they don’t even come close to estimating the eventual sale price of most properties in most markets with any accuracy. I’m all for open data and making sure the consumer has access to data but I don’t think I’ve found anyone, anywhere- including the representatives from Zillow who commented on this post- who thinks the Zestimate is even in the ballpark of the actual home’s value. That is what your goal is right? Determining the home’s actual market value? What I said in the last paragraph (which you may have missed) was rely more heavily on local websites, get your own license and review your own data from the MLS or find an agent you trust. Did you have a bad experience with a realtor or something?. I’m also a lawyer and an investor so if you just want to trash me you can trash those professions as well.

  12. A couple of points:

    1. You need a good broker / agent. Quality can very–I know from personal experience. My current agent is awesome. He adds considerable value to the process. He worked his a** off on a $35k deal for us. He knows tons of info about foreclosures, short sales, auctions, closing deals, fix and flipping, etc. that Zillow can’t provide. I don’t look to him to tell me what/when to buy. Of course, he does research for me, but I don’t hold him accountable to make a good investment financially.
    2. One of my sentences in the previous post was misconstructed. I intended to communicate that Zillow uses a ‘comp’ method just as your local agent does, but Zillow uses massive scale. I can’t find any reason that Zillow would try to ‘get the right comps’ to achieve a particular outcome, whereas your agent may have several.

  13. Frank,

    I expect you to ‘talk your book.’

    You started a post that bashes an entire company. You threw the first rock. You bash Zillow for innacurate data while providing no data of your own. You have Lawrence Yun ‘on your side’ and you want to talk about in accurate data? As a successful player in the business, I would have less respect for you if you didn’t bash the competition. But you are on the wrong side of history. We live in the information age. 20 years ago Realtors had a monopolistic control on much of the data. Those days are
    gone. How do you defend all of the buyer agents who told their clients to buy in 2007 / 2008? To be clear, my argument is not one to exclusively use Zillow, or to not use a Realtor. Use them. I extensively read the Economist, the FT, hybrid online local tools run by agent/brokers http://www.cohomefinder.com. I crunched numbers for 6 months before we bought anything. More info is better. Let’s be honest Frank. Who sued Zillow to get them to cease and desist on the Zestimate? Was this to protect buyers? How many agents have offered to give back their commissions they made on purchases that are now upside down or foreclosed. Zillow is one data point. It’s also clearly a threat to ‘the big boys’ of real estate. It’s in your best interest to bash.

  14. Jonathan Dalton on

    Erik – what is the incentive for a listing agent to advertise a home for sale on a site that is bound and determined to provide potential buyers with an inaccurate picture if the home’s value? You argue monopoly; I argue common sense.

    Zillow isn’t “providing comps on a large scale.” It’s attaching numbers only slightly better than random to homes on a large scale. There’s a decided difference.

    Spencer – good to see you here to congratulate James. Care to add your two cents about the sheer volume of incorrect listings on your site that, unfortunately, have distracted buyers from what’s really available?

  15. Johnathon,

    Exactly what is Zillow’s incentive to provide inaccurate data? Most ‘crimes’ need a motive. Fail to see what’s in it for Zillow to mislead people intentionally. I can’t say the same for Lawrence Yun and NAR. His job was to convince people to buy Real Estate at the height of the bubble. So you can argue against this a couple of ineffective ways: 1) Claim it didn’t happen. That isn’t going to work as there is a record: http://lawrenceyunwatch.blogspot.com/?m=1. 2) argue that ‘no one saw the bubble / crash coming.’ This is not true. Even I saw it in 2005: http://econlog.econlib.org/archives/2005/01/worrying_about.html. Or it means that Mr. Yun wasn’t smart enough to see it.

    Your point (paraphrasing) about how Realtors dislike advertising on Zillow is valid. My Realtor bitches about the same thing. Again, no one likes competition. And no one wants to ‘be forced’ to spend money on a new advertising platform. See ‘Facebook.’. I can respect that complaint.

    Where I call B@@@S$&@ is when someone starts talking there own book while claiming they are doing what is best for the consumers. The NAR has thrived on opacity and keeping information from consumers. Conflicts of interest are not transparent.

    • Erik –

      I don’t know what Zillow’s incentive is, but they’re doing it and have been for years. My argument would be they don’t have an incentive to do it, but because of the sheer volume of apologists out there there is no incentive for them to get the data right. No one holds Zillow responsible for the hundreds of thousands of listings of homes not really for sale; the buyer who sees them shifts the burden of proof onto the agent to prove that the home really is sold.

      If you scroll up you’ll find something I wrote last week. Six pages of search results for single family detached homes in Glendale AZ, where I live. About a dozen correct listings. Everything else – more than 100 other listings – either were under contract, in a different city, already sold or were land or townhouses and not detached homes.

      There’s no argument to be had about the accuracy of Zillow’s data. The site admits up front that its a coin flip where the Zestimate is within 10 to 20 percent of market value and, at least here in Phoenix, the listings are only about 20 percent accurate.

      I get the concept of an investor wanting more data, not less. But seriously, what useful data are you getting from Zillow?

      As for the other argument – doesn’t have anything to do with what we’re talking about but, yes, Lawrence Yun is a shill for NAR. Not going to disagree with you there. Happy? But that doesn’t mean everyone who belongs to NAR, especially when we must be a member to have MLS access in most places, agrees with Larry.

      You keep referring to Zillow as competition. Okayfine. My competition are other agents who sell homes for a living, not an advertising site.

      I personally don’t list the majority of my homes on Zillow for two reasons – 1) There is no advantage to marketing a home on a site that insists based on its inaccurate Zestimate that the value is far less than what it really is. 2) There is absolutely zero evidence – zero – that homes sell more quickly or for more money by being on Zillow.

      Yes, James found his house on Zillow. I’m sure someone also bought a home because an agent put a photo of it on a candy bar wrapper. It doesn’t mean long shot marketing is the best way to do it.

    • Erik, seriously? What is ZIllow’s motivation? Because home buyers and sellers, aka the PUBLIC don’t realize how inaccurate these values are. Zillow pimps these values all over the website and all over their advertising to DRAW TRAFFIC. Because the more traffic they have, the more advertising they can sell. Are you seriously that blind?

      As an agent, I deal with people asking and talking about Zillow and Trulia all the time. So much so, in fact, that I have to address this problem both in my initial consultation with them as well as with blog posts on my website.

      Zillow Dallas Far From Accurate
      Trulia Dallas – Not As Accurate As You Think

      Jay and Spencer were very quick to thank James for using Zillow, but James said something that was very telling – “I don’t know how many times I’ve contacted my agent about a home to find out it was already under contract or sold. In some cases, properties have remained on Zillow for months after they have already sold.” And Zillow usually blames the agents.. “We have a tool where agents can report inaccurate listings…” When did it become our job to police YOUR site?

      • Many a text I’ve received from soon to be disappointed clients regarding a listing found on one of the Big Three. 95% of the time my searches on these properties in the MLS have yielded properties anything but active, unencumbered by some form of contract or ownership by a new buyer. I’ve told them repeatedly to use the results of the searches I do for them from the MLS; I even set up personal, self-updating sites for them searching by their very specific criteria! Yet, like a moth to the candle, they continue to hover around these self-help purveyors of smashed dreams. Yes, TRAFFIC is the answer! These sites rake in fees for agents who subscribe to their lead generation services. They need the inquiries of interested buyers to justify the income from the agents. So what if the properties displayed for sale are pending? The agent gets a call, says, “Sorry, but that merchandise is no longer available. BUT, we DO have OTHER similar models in stock in the warehouse!!”

        BS stands for many things.

  16. Kelvin,

    Yes, I love http://www.cohomefinder.com. Obviously I live in Colorado. I have it set to send me emails daily. It’s the closest I can get to live MLS data. It is where I start my search. The properties I usually end up bidding on have multiple offers–including cash–and this site provides me the quick response I need. To validate one of the OP’s points, Zillow doesn’t move as fast. So I use cohomefinder.com, then Zillow. I am a rental investor.

  17. Johnathon,

    I am not an expert in how best an agent should market his business. My general point is that the Information Age has changed how everybody buys everything. From George Soros theory of ‘openness’ to Philip Fernandez book ‘disruptive revenue,’ the point is buyers are more in control of every purchase because of more information. Organizations who wish to stop this process–be it the govt of China or Syria, or Boeing or NAR–are fighting a futile battle. Zillow provides and abundance of data. It’s map/historical actual pricing info is highly accurate for the county I am buying in is accurate: it simply pulls the data from the county. Of course there is a time lag. It rent estimates are as accurate as I need them to be. Another way in which Zillow is likely to be accurate is intra-market data. Because each county is different in each state, comparing these is likely to have more error. But if I am looking at SFD 1500 sq ft <1990's construction, within the same city and area code, data inaccuracies are likely to skew the same way.

  18. Zillow is wildly inaccurate for estimating property value. But in the areas where I invest/manage property (Dallas-Fort Worth, Atlanta Metro, and the SF Bay area) it is surprisingly accurate at rent estimates.

  19. Great post Frank. Although we use a “quick comp” method between using these types of sites to run an algorithm to filter through daily auction lists (to see which ones might potentially have equity and are worth bidding on), these interfaces can be quite misleading to the average consumer.

    I always cringe a little when a seller calls and says “Well according to Zillow my home is worth…”

    Yikes. Great topic though, thanks for shedding some light!

  20. I, like the author, and so many others have found Zillow and Trulia to be inaccurate in their information the majority of the time. I strongly advise sellers not to rely on the information they obtain from these sites but to review other sources and compare. At times it is difficult to get sellers to adjust their expectations after they have viewed those sites. I guess it is somewhat normal though, we as a people usually want to believe our stuff is worth a lot more than it usually is. Lol Unfortunately for Zillow and Trulia if the information was more accurate they would have more Realtors paying to advertise on their site. i do like the question and answer section they provide for Buyers, Sellers and Renters.

  21. The onus is on real estate brokers and agents to make a decision to not syndicate, validate or endorse these 3 party websites. More importantly, B and As have to sell sellers why appearing on these large search engines is actually counter productive – which is a tough sell in my opinion. In any case, Brokers and agents have to go a step further and create a much larger search presence on the mobile search front if they truly want to limit buyers and sellers dependency on the Zillows of the world, which is a battle for another day. Since the article deals with or speaks to how investors should or should not use Zillow, I think it misses the point. Investors, in my personal experience, use Zillow differently. Smart investors are already deeply connected to REO brokers and agents who give timely MLS data in the form of automatic emails. Investors are not using Zillow for MLS information. But, they might find Zillow’s recent inclusion of 1.5 million “foreclosures” interesting. Investors play the numbers game and target FSBOs who use zillow to advertise their homes and make offers in most cases on properties site unseen to gauge interests and make the phone ring. Zillow is very investor friendly because of the abundance of data it provides which is widely known to be inaccurate based on Zs algorithm but not to be interpretation as not being useful. If Zillow’s Zestimates were intended to be used as a starting point, this is the group of buyers who benefit the most from that information.

  22. I actually found a great investment on zillow before it even hit the MLS. Though it was probably very rare and was purely because the listing agent was lazy and zillow updates homepath listings daily.

  23. The zestimate on my home is substantially inaccurate and when I questioned the zestimate with Zillow they advised “that they have a First Amendment right to publish any valuation they want and that they never change zestimates”. How arrogant is that? What other consumer facing company takes such a hostile approach to potential customers? Zllows Customer Service is also appalling and they don’t publish any phone or email contact details. Anyone making a complaint is required people to make their issue public on the Zillow Advice Forum where they are subjected to snide and snarky comments from a handful of Zillow cheerleaders who seem to believe that zestimates are infallible.

    One aspect of my complaint was that Zillow had a geo-mapping error so that my home was described as being in a neighboring city some 6 miles away. Zillow had the city boundary running down the middle of the road so that homes on one side were zestimated 5 or 6 percent lower than market value, but homes on my side of the street (in the wrong city) were undervalued by 15 to 20%. Because I was persistent and continued to question the accuracy of zestimates over the next 9 months Zillow eventually banned me from their website, demonstrating the most amazing double standards with what ‘cheerleaders’ could post compared to critics.

    As a consequence of zillow banning me from their website they also deleted all the information on my home causing the already incorrect zestimate to drop a further $15K. Effectively they have ‘confiscated my home’ refusing me access to correct missing information that impacts the zestimate. When Zillow eventually fixed the geo-mapping problem in June the zestimate for my neighbors home increased within a few weeks by 30%, and has continued to increase every week since so that it has now increased by 40% since resolution of the problem. The zestimate for my home however is still lower than the day that Zillow confiscated my home.

    When Zillow behaves in such an arrogant and unfair manner it raises serious issues as to whether these AVM sites can be trusted to operate in a fair minded manner. Zillow has certainly demonstrated that it can’t, and in my opinion the time has come for these websites to be subjected to some form of Regulation to protect homeowners interests. Every other aspect of daily life is regulated, whether it be banking, insurance, healthcare, Investments with the SEC or utilities. With home ownership being such an important aspect of millions of people it is time that our legislators caught up with technology and implemented regulation over AVM websites like Zillow. Bottom line is why doesn’t Zillow correct or delete substantially inaccurate zestimates when reasonably requested by the homeowner? It can only lead to a more accurate information so one has to question Zillows motives for refusing to make corrections. Is it all about getting homeowners to continually check if the zestimate has changed and thereby increasing the number of unique users that generate adverting revenues for Zillow?

    • that sucks… you might want to share that experience on YELP, Google, BBB, and any other review site. hopefully, others who have been mistreated will chime in and help *influence* some change in company policy of how to work with the public.

      the internet works for the li’l guy as much as the big co’s… make it work for you and share your experience.

  24. When finding my house which I am closing on this month, I used Zillow a lot because of its ease. But was disappointed at the outdated data with a house being available. That being said the buying price for my house was right on target. Have a great day on purpose!

  25. It seems any Zillow or Trulia etc reply to data is to overwhelm with a mass of information and vague statements.

    Would do a lot more for their long term trust ability if they just said honestly, that study showed xx% of listings are inaccurate, we have also found that xx% of our listings are inaccurate.

    We have XXX listings on Zillow that aren’t listed anywhere else. Then let investors make up their own minds if it’s worth checking out Zillow to try and scoop that bargain.

    Perhaps I just don’t have the right data, but it seems like the whole point of this article and what the data shows, is that the time wasted on Zillow sifting through multitudes of inaccurate listings would not be good use of an investors time when they could go directly to an MLS powered site.

    Would a real estate agent search Zillow if they wanted to buy a house? would an investor if they knew what was going on?

  26. I too have found Zillow and Trujillo to be inaccurate, but as a newbie it is the only tool I have. I would love to have access to the MLS, and I plan on getting my license in 2 years. In the meantime, I would like to establish better win-win relationships with RE agents, what do I have to offer them in exchange for them continually finding comps for me?

  27. This was a great article. I am an investor and a real estate agent and I spend valuable time educating buyers and sellers on the inaccuracy of these sites. I always point them to austinhomesearch.com which for us Austinites, feeds from our local MLS. I am sure that most areas have something similar.

      • I noticed on CenterCityTeam.com that you display Zillow Zestimates on some listings? Also, your site and the austinhomesearch.com both present major usability problems compared to Zillow, which while not perfect, presents a much more accessible and usable website. If local companies don’t like Zillow, they need to provide at least as good of an experience on their own sites to compete.

  28. Transparency and open information are beneficial to homeowners / home sellers / rehabbers and are harmful to middlemen / agents because it eliminates the need and expenses of having a middleman in transaction.

    Many other industries have eliminated the middleman in transaction, and the same thing would happen to real estate sooner than you might think and consumers will greatly benefit from that as well.

    Thanks to the internet and new technologies that provide these excellent opportunities to the public and cuts the unnecessary expenses from the deal.

    I personally use the Zillow frequently and find it an extremely useful website and see how it is improving its services day by day. If anyone from Zillow is reading this, I want to thank you guys for this great service. Please keep it free for consumers and don’t allow anyone discourage you from doing the great job you are doing.

    By the way I am not affiliated with Zillow in anyways neither I have been compensated for writing this comment.

    • The problem is not the transparency of Zillow information but the inaccuracy of it. Only a week or so ago Zillow CEO Spencer Rascoff admitted in a Bloomberg interview that Zillow zestimates are over 25% incorrect for 17% of homes. That level in inaccuracy is totally unacceptable to consumers and even more so when Zillow refuses all reasonable requests from homeowners to correct or delete erroneous zestimates.

      Doing a bit more rearch I found that for Johnson County in TN that only 4.1% of home zestimates are accurate within 5% ; only 8.2% are accurate within 10% and only 24.5% are accurate within 20% – that means that 75.5% of homes are more than 20% erroneously valued, and the median error rate for the county is 58.4%. Don’t believe me look at the Zillow website for Johnson County Tennessee.

  29. I’m tremendously concerned with the persistent and constant method of enticing consumers who are striving to work on their own to contact agents who are entirely unrelated to the listing, hence, the buyer pays more money for their purchase. Additionally, the most inexperienced agent or neighborhood-unrelated agent may advertise on the listing’s page and the buyer doesn’t know what they are being attracted to. A first-time buyer truly is not able to quickly decipher between where the agent’s contact is and where the soliciting-agent’s contact is and how or why they are different. Zillow and Trulia’s pursuit of this revenue generator scares me. I’m also wary that Zillow and Trulia are now paying “real estate leaders” to convince other realtors and consumers to use Zillow and Trulia. I love this write-up! So much of it is true!

  30. Brittney Edwards on

    Brittney’s 2 cents

    I hate when my clients get all excited and email me the addresses of properties they want to see, but when I look in my system they’re sold or pending. Rely on me your agent to keep you current with new listings not the internet! With regard to Zestimates and estimates of value, that is dated information, these programs use sales comps from transactions that have closed when there are so many other factors. First, that offer was made on average 30 days before it closed, and prices here in Oakland change faster than that. Plus these programs group certain neighborhoods together when really every street is different and new trendy niche neighborhoods are popping up faster than these sites can keep up.

    These programs just average the price with no regard to the condition of the property or the type of sale. In Oakland the spread in price/ value varies greatly depending on the condition and type of sale. Short sales sell for less than regular sales, bank owned “As Is” properties also sell cheaper than fixed up and staged homes. These sites even use foreclosure data to determine values which is ridiculous, of a course someone who paid all cash at the auction on the courthouse steps without seeing the interior or getting clean title pays much less than a regular sale.

    Even in on market sales such as banked owned properties or just dated properties, an All Cash Investor will get the property cheaper, then three months later after slapping a new Ikea Kitchen in it and some landscaping, the property is sold to a owner occupant with about a 50% mark up. Properties that fall in both categories can be for sale or recently sold at the same time in the same neighborhood, and since these programs use an average (price per square foot among a few other generic things), they w tend to severely overestimate the value on some and under estimate on the others.

    Only a good agent who really knows that area can help you determine a properties true value, there is an amount of added unquantifiable value or under value for every property. I tell my clients all the time that there are several different offering prices for homes, there’s an All Cash price, a Conventional Loan price and a FHA price. There is also an “I like it” price, “I’ll settle for it for the right price” price, and an “I have to have it, can’t image anything being more perfect price.”

  31. As a homeowner, I find both Trulia and Zillow offensive and infuriating. What gives either site the right to damage my home value with their rediculous “Zestimates,” or whatever else they choose to call their nonsensical misinformation? I only wish for a class action lawsuit to shut them down.

  32. My thoughts have more to do with slow results and bad data…I know little about the actual inner workings of home values and the like when it comes to Real Estate. But what I can say is this – these websites, both Trulia and Zillow, are very poorly maintained despite their claims of always-there and dedicated customer service teams. Now, I don’t doubt that the people who actually work for these sites are doing a fine job when dealing with customers one-on-one, but what about behind the scenes? My current job is as a marketing agent for a Realty company in the north. All fine and good, it’s a great job with a lot of perks and it has taught me a plenty. I enjoy working with the local MLS’ and maintaining the exposure of a home, etc, etc. BUT I have to admit that a good, solid chunk of my work week is spent mothering our listings on Trulia and Zillow. These are such messy, information over-loaded websites with only semi-friendly user interfaces (Zillow more so than Trulia) disguised as easy-to-use-on-the-go-tools. Every week I find myself re-uploading missing photos, deleting repeating ones, and fixing home facts so that they are actually correct in the system. This is a great hassle and time waster when you are maintaining over 60 active properties, especially if you don’t want to look disheveled and unorganized to a public who knows you use these websites. Now, I know it is unrealistic to set something up and just walk away from it without having to worry about it, but to have to kiss each listing on the forehead every morning to make sure they get through the day (lol) is pretty ridiculous. Anyway, from a sellers perspective, and I communicate with our sellers on a regular basis, I can see how these sites seem to be the answer in getting their homes noticed…but, as others have mentioned, buyers are often led on wild good chases when searching for properties unless each and every single one is individually maintained which is just not possible. I personally prefer working with websites like RealBird on a regular basis…just one and it’s done! Also, note to Trulia, NO ONE wants to upload photos one at a time…get with the program hahaha

    • Hi AJ,

      Russ from Zillow here. You certainly should not have to babysit your listings as much as it sounds like you’re doing. Our systems are set up to automate the posting and updating of all listings you send to us through your feeds. It’s in nobody’s best interests(yours, consumers or ours) to have inaccurate data, period.

      Obviously, something isn’t working right here and we want to get it fixed for you. Would you please contact me at russh at zillow dot com so we can get this taken care of for you asap.

      Thanks for using Zillow!
      Russ
      Zillow Customer Care

  33. Right, wrong, or indifferent, you gotta hand it to Zillow for at least being proactive and engaging in the discussion. Most larger organizations simply omit taking the time to involve themselves with these kinds of discussions. I just wish I could get that kind of community involvement with AT&T.

    • Michael Woodward on

      Wow! This turned into a hot topic. I just stumbled across it and felt the need to add my two cents.

      I see several factors at work here that are creating the controversy.

      • Michael Woodward on

        Ooops. I hit the wrong button and sent my post before it was finished.

        Anyway, the two main factors that I feel are at play are…

        1) Buyers and sellers want open information that’s readily available and that has not been filtered or intentionally altered by anyone. I think this probably spawned the birth of Zillow, Trulia, and others.

        2) Realtors depend on the MLS and the traditional “system” that’s been in place for a long time for their livelihood. Sites like Zillow and Trulia threaten the established system hence the (understandable) enormous vocal opposition.

        Ultimately, the bottom line is that these sites wouldn’t be in existence if they weren’t providing something people want. Like it or hate it, it’s alive and thriving.

        I use Zillow, Trulia, Realtor.com, etc extensively as both a consumer and investor. These sites provide tons of valuable data that isn’t otherwise available to the public. That’s enormously valuable to me. I also have close relationships with local Realtors that provide MLS data that I use to cross-check my online data for accuracy.

        A house is ALWAYS only worth what someone is willing to pay for it which means that NO ONE “knows” what any house is really worth until someone makes them an offer. Since it can’t be nailed down precisely, agents create “estimates” from MLS data. The sales price becomes public data and is picked up by Zillow and converted into the Zestimate. Tax values are another data point that is created in exactly the same way as agent estimates and Zestimates. I have a column on my spreadsheet to factor that into the equation. After I compile all the raw data, I call my agent to ask for his estimate. By the time I process all of that information, I have a fairly good idea of what someone will be willing to pay for my property.

        I don’t think it’s fair to single out Zestimates as faulty if people are using them improperly. Zestimates are no different than Kelley Blue Book values on cars. Everyone understands that an estimate is NOT a guarantee of value.

        One last thought….. A couple years ago, a house popped up on my Zillow search that I liked. I made an offer and got the contract. About a week later, my agent called me and with an excited tone said, “You have to go look at this house that was just listed in the MLS”. I asked for the address and guess what….it was the one that I already had under contract for several days. It was a striking moment for me that solidified my opinion about Zillow and Trulia.

        I’m very active in real estate investing but I’m not a Realtor so my first stop of the day is always Zillow. I personally hope they will continue to refine their algorithms and get better at what they do. I’m a huge fan!

        • Your response was the response that I had wanted to write–you nailed it perfectly:

          1) people like information, the more the better
          2) anything is only worth what someone is willing to pay for it at any given time. Neither Zestimates nor appraisals are ‘the truth,’ and even if they were in a particular moment of time, it doesn’t mean they will be in a month, a year, or a decade.

          -Erik

        • “NO ONE “knows” what any house is really worth until someone makes them an offer”

          Just to reinforce this point, my house was appraised by two different appraisors- one came in at $53,000, and the other came in at $48,000. The percentage difference in these two professional appraisers is greater than the percentage difference between many of the Zestimates vs Appraisels that have been posted in these comments.

          So, if we are going to get our pitchforks out and burn Zillow at the stake, we best do the same for the appraisers, least we be hypocrites. In fact, the Appraiser actually come out and see the property, and would be expected to be far more accurate!

          (There was no Zestimate available on my house, so I can’t compare that to appraised value. I paid 49,900 for it, and got the seller to pay 6% towards the closing costs.)

  34. Wow, fascinating perspectives on both sides. I can only think about accuracy in a comparative sense myself. It’s been referenced at several points in this thread that the Zillow Zestimate is currently within 5% of the sale price 31% of the time, within 10% of the sale price 55% of the time, and within 20% of the sale price 78% of the time. That apparently sounds pretty bad to many of the commenters. But bad compared to what? One of our recent research briefs (http://bit.ly/10No89d) analyzed more than 290K closed sales and found that the initial listing price was within 5% of the final sale price 48% of the time, within 10% of the sale price 71% of the time, and within 20% of the sale price 90% of the time.

    So initial listing prices are more accurate than the Zestimate to be sure but, to read some of these comments, one would think that the median absolute error for the Zestimate (8.7%) was in a different universe than the error associated with listing prices (5.6%). This simply isn’t the case. And, if one confines the analysis to listings where we can ensure that the home was not underpriced, Zillow’s median error is 9.1% relative to 6.9% error for the initial listing price (or, in numbers that are perhaps more intuitive, the Zestimate is within 5% of the sale price 32% of the time while the initial listing price is within 5% of the sale price 38% of the time).

    As the research brief itself concludes:

    “These data clearly demonstrate two things. First, as we expected, real estate professionals who know the local market and intimate details of the home can price a home better than an automated valuation model. But the Zestimate does provide a good starting point for a conversation about home values, a starting point that compares fairly well to list price… But, as we’ve always noted, that pricing conversation that may be started with the review of the Zestimate should ultimately be augmented with the input of opinions from local real estate professionals (agents, brokers and appraisers).”

    Thanks for the interesting conversation here.

    — Stan (Zillow Chief Economist)

  35. Buried in this heated an infomative debate is the giant elephant in the room. Melinda Allen slipped it in her post above:

    “but as a newbie it is the only tool I have. I would love to have access to the MLS, and I plan on getting my license in 2 years”

    This is a great debate. My support is mixed a little on both sides. I see value in all the tools. I love the search interface and features of the websites, I love the knowledge of an experienced agent. I love just coasting along a google-map-style interface and seeing homes for sale and recently sold pop up, then tapping on them to get data. That data includes the recent tax assessments and sales history…trend data (very useful), relative data tot he zip and neighborhood…nice to have that all in one place. Good information for various reasons and uses.

    I value an appraiser to walk through my home and see high end chef’s kitchen, the master suite and perfect 110 year old hardwood floors. No website is going to factor that into a valuation when they, like agents and appraisers, are so heavily reliant on comps.

    The valuation accuracy is sort of a moot point and I cant help but to pay attention a little closer when folks are calling for a service like zillow to be shut down simply becasue on part of its list of services is inaccurate, as they state it is. Its an annoyance for agents because their clients use it and, well, its not always accurate (or not even close…whatever). That is, as I said, an annoyance for them. This reminds me of when a home contractor comes in and balks at the work the DIY weekend warrior did to his home.

    Timliness and accuracy of listing data, the other big complaint, is easily fixable. Allow live MLS data to be accessable via data feed to anyone for an appropriate price. I want it. I’d pay for it. I assume other investors that dont have an RE license would want it and would pay for it. Zillow and Zillows users would probably want it and someone in that chain would pay for it.

    Maybe this is a stupid question – I don’t have an extensive RE background. But lets talk about the MLS data and access to it, since that is really at the heart of all of this, isn’t it?

    • That’s the easiest question to answer. The MLS is an inter-brokerage marketing tool by which brokerages can advertise listings to each other with an attached offer of compensation for cooperating brokerages.

      If you want MLS access, get a license and join the local MLS. That sales data belongs to the brokerage, just as any proprietary database belongs to the entities that create it.

  36. I must say that Zillow’s zestimate is quite confusing. I was recently looking at some properties in Downtown San Diego California and was amused at the estimated value cited by Zillow. Using local brokerage websites definitely seem to be the best option for people looking for accurate and relevant information. Like one of the posters commented here, real estate is all about knowing the local neighborhood. I ended up finding a great brokerage website http://www.92101urbanliving.com for downtown san diego condos listings. The type of information they provide is incredibly personal, which sites like Zillow can never provide. Stick with local broker’s and realtor’s sites.

    Jay

  37. Of course real estate agents hate Zillow and Zestimates, The seller, the listing agent, and the buyers agent all have a vested interest in keeping potential buyers in the dark about the true value of a property.

    Hurray for Zillow. At least it gives the potential buyer an idea if the property is overpriced.

    • Except it doesn’t. Not even close. It merely confirms a potential buyer’s nearly universal feeling that everything that say is overpriced because no one wants to pay the listed price. Only a fool would take data the company itself says isn’t within 10 percent of the mark even half the time and consider it more valuable than an automatic number generator.

  38. My real estate broker finally caved and now is advertising on Zillow.

    He understands that I see him as a resource for negotiations, contracts, giving a broad estimate for repairs (that I identify) as well as some ‘feel’ of the marketplace: “I have 10 buyers and no sellers this month” is anecdotal data.

    One of the things the Zillow bashers fail to address is the distinction of consistent inaccuracy vs random inaccuracy vs. prejudice inaccuracy.

    As an example, a bad referee in a sports game arguably will have little impact on the game if he is equally bad on calls for/against both teams. He is prejudiced if he is only making the wrong call against one team.

    Zillow’s algorithm provides consistency because it is applied equally against the data it pulls from. That will change from county to county and state to state, so using Zillow to compare a home in Boulder County, Colorado to Clark County, Nevada would be less meaningful than to compare Boulder County, Colorado to Adams County, CO. Even more meaningful would be Commerce City, Adams County, CO to Thornton, Adams County, CO.

    The point is that Zillow is not randomly generating some algorithm each time for each property such that all the properties on the same street have a different, random algorithm applied to them.

    I used Zillow as a question generator: “Why are these houses in this neighborhood more/less than the other neighborhood? Why is the house more/less than the neighbors?” Sometimes Zillow would express discrepancies that I couldn’t resolve through other research, so I figured that the number was just off.

    I used Zillow to make some property investments (rentals) and they are returning about 15%. Of course, I didn’t just use Zillow. I used craigslist, Trulia, client facing MLS sites (www.cohomefinder.com) and of course a Realtor who knows his shit and didn’t waste any of my time bashing Zillow.

    • Technically speaking, I’m wasting *my* time bashing Zillow. I’m only wasting your time if you choose to take the time to read it. :-) And knowing one’s shit and not believing Zillow benefits the consumers aren’t exclusive concepts.

      And for the purpose for which you’re using it, on a neighborhood level, it makes sense. But I’ve also seen golf course properties valued for less than the non-golf course model matches across the street which clearly makes zero sense.

  39. True, Johnathan, :)

    Your point about the golf course is completely valid and perhaps it validates both our points. On my personal residence, Zillow can’t account for the solar photovoltaic, the custom greenhouse shed, and the solar heated garden. It probably can’t account for being ‘on’ the golf course versus being across the street from one. (Although if you are on a poorly designed fairway, that could be a negative, right?)

    Zillow is and should be one tool of many in the tool box. How many carpenters or mechanics would enter into serious debate about which is their ‘best’ tool? I wouldn’t agree with anyone who claims that Zillow’s Zestimate is a ‘divine’ number ordained by God.

  40. Todd Stevens on

    I noticed a posting about MLS versus Zillow. Huge difference is those who allow agents to advertise their listings on MLS as the contact person allow it and know it. For Zillow, 99% of all the Zillow listings don’t have any approval, allowance or confirmation that Zillow (and Trulia) are allowed to almost delete the hired agent and replace that agent with three other agents.

  41. I actually use Zillow quite a bit or did when my wife and I were in the market for a new home. We also had a Realtor and to be honest, we or I did more work to locate homes we were interested in using Zillow and Trulia. It makes sense to me that I am the one buying the house and having the ability to see properties and lots of pictures is a value to me. Waiting for my Realtor to give me this data can get kinda tiresome.

    We liked our Realtor and have used him several times since my wife’s parents also bought a house near us. It is beneficial though to browse through a site like Zillow to find homes to go look at. Apparently I am not alone since Zillow is so popular and gets a ton of traffic to it’s site.

    Having said that, I have been bothered by a lot of the inaccuracies I have found also. Namely, the house we bought has the wrong square footage listed. In fact, most of the homes listed have the wrong square footaqe. Something I care about. Also the info for our house still has the Realtors comments in it and we have lived in this house for going on 3 years now. The info reads as if the house is for sale.

    Also, once we went to a house we found on Zillow as for sale and a man was at the house in his driveway. I walked up to him and talked to him and he said his house is not for sale. Made me feel kinda stupid doing that. How Zillow got that info is beyond me? Maybe the guy in the driveway lied to me and was losing his house? Who knows?

    But since I am not a Realtor, I am unable to use the MLS site and rely heavily on Zillow or Trulia to find homes for sale. Out of sheer curiosity I go to Zillow to see what the Zestimate is for my own house. I know that the Zestimate for my neighbors house was $150k and they sold it to someone (My new neighbors) for $190k. Now my house is listed at $210K But we just had some solar products installed so who knows if we will ever realize that as a higher sales price whenever we sell?

    I like Zillow though and appreciate their site. It has helped me.

  42. Todd Stevens on

    I’d tell everyone that Zillow and Trulia are valuable websites if Zillow and Trulia would remove zip-code-purchasing – if Zillow did that, I’d send a thank you note to CEO Spencer Rascoff every day, handwritten even. I don’t understand why Zillow doesn’t want to become a well-liked company by 90% of the world (currently, it might be 30% to 50%). Once Spencer Rascoff removes zip code purchasing and discontinues paying others lots of money to promote their zip code purchasing, I’ll have so much respect for him.

  43. Todd Stevens on

    I’d tell everyone that Zillow and Trulia are valuable websites if Zillow and Trulia would remove zip-code-purchasing – if Zillow did that, I’d send a thank you note to CEO Spencer Rascoff every day, handwritten even. I don’t understand why Zillow doesn’t want to become a well-liked company by 90% of the world (currently, it might be 30% to 50%). Once Spencer Rascoff removes zip code purchasing and discontinues paying others lots of money to promote their zip code purchasing, I’ll have so much respect for him.

  44. Todd Stevens on

    Sure, the core and original purpose of Zillow and Trulia was to provide quick and easy access of all real estate to all professionals and consumers (for pay or advertising). Somewhere along the way, they started selling “zip codes”. “Zip Code Selling” causes unrelated agents to buy property-representation within that bought-zip-code without the owner’s or agent’s knowledge or approval. How does this effect you? It causes you in our virtual-universe to feel compelled to contact the advertised-unrelated-realtors (‘for this property contact’) who may steer you away from the home or cause you to pay more in price for the home (typically, the cobroke commission is higher than the non-cobroke commission). Some realtors are even using this product to make money from ‘referring’ buyers who contact them to other realtors (effecting the level of service as parallel to income provided by your realtor). My calculations are that 25% of all buyers want to work alone regardless of the situation, 25% of all buyers will eventually work with a realtor and 50% of all buyers are working with a realtor. Currently, Zillow and Trulia are spending millions of dollars to convince realtors to use this product. It’s my opinion that this products moves these two, otherwise great, companies away from their original goal and I know it’s effecting the internet-self-empowerment of both buyers and owners. I hope this helps. Trulia and Zillow can both become billion dollar companies without using this product.

    • Hi Todd, Jay T. from Zillow here.

      We feel presenting multiple agents to potential buyers is a good thing. Site users are presented with multiple agent profiles, with easy visual reference to their client-supplied reviews. A simple click allows visitors to examine the agent profiles, read reviews, and further investigate the potential agent by visiting their websites, Facebook pages, blogs, etc.

      And of course no one is forced to use any particular agent. That is, and always should be, the buyer’s choice.

      We also prominently display the listing agent and brokerage multiple times on property listing pages. Listing agents do not have to pay a dime to be displayed as the listing agent, all they need is a free Zillow profile. If you compare the listing agent presentation on Zillow, it’s far more obvious who that agent is than what is shown on most agent/broker IDX sites.

      • At the very bottom of every listing, there is always a “listing provided by… With a link to the listing website. I can’t say this is “prominent” but it is certainly visible. If an agent has a free Zillow Account, perhaps they are featured more prominently? (I don’t know that I’ve ever seen one like this).

        That being said, I have seen many agent IDX sites that don’t list the source at all- and others that list the source even less prominently than Zillow. In my limited experience, Zillow features listing agents more prominently than the majority of broker IDX sites do.

        So, while I can understand listing agents frustration with having other agents listed more prominently next to “their” listings, Zillow is (in my limited experience) way better than brokers in this area- and listing agents should probably be happy to have the eyeballs on their listings- I know the sellers probably are!

        • James – here’s a link to a listing page where the listing agent (Kathleen) is not a Zillow Premier Agent. She’s noted as the LA in the top right “Contact an Agent” list, in the same contact form at the bottom of the listing, and again at the bottom (along with the listing brokerage and a link to the listing on the broker’s site).

          If I were Kathleen, I’d add a photo to my profile and get some reviews.

          If you refresh the page, you’ll see Kathleen stays fixed at the top of the list (a prime position) and other Zillow Premier Agents rotate underneath her.

          “and listing agents should probably be happy to have the eyeballs on their listings- I know the sellers probably are!” I know I was as a listing agent, and I’m sure you’re spot on about the seller’s opinion.

        • Thanks-it clearly shows them as the listing agent, too. So, if you have a free Zillow account and you are the listing agent, you are featured first and foremost, if you don’t have a free zillow acccount, your listing is attributed (often with a link to the original listing, I have noticed) in a way that is more prominent than most broker IDX sites.

          With these facts being considered, and the examples of broker IDX sites I have shown in my other post which do not EVER list the listing agent prominently, I would say that Zillow is heads and tails above the pack here, and I don’t know whay any agent would complain about it.

          I don’t know about Tulia (I don’t really care for their site), but Zillow is doing an awesome job!

  45. Todd Stevens on

    Hi Jay, I’m sorry, but when I search “129 W 118th St, New York, NY 10026″, I don’t see my information anywhere on the page even though I’m the hired agent. I do clearly see the contact information for DeeAnn Reiber, Robb Pair and Fern Hamburger. Same situation when I click on 111 West 122nd Street, another agent’s listing. My information’s almost deleted so how do you “prominently display the listing agent and brokerage multiple times on property listing page”? Have you thoroughly researched how this product displays on Zillow? The “IDX” is quite foreign to me. Focusing on Zillow, why do you almost delete my information and compel buyers and realtors to contact realtors who have a vested interest in steering the buyer to buy a different home?

    • Todd – when I search “129 W 118th St, New York, NY 10026″ on Zillow, I’m presented with a home that isn’t listed for sale ( http://www.zillow.com/homedetails/129-W-118th-St-New-York-NY-10026/31551653_zpid/ ).

      If we don’t know it’s listed for sale, we can’t attach a listing agent to it…

      You asked, “Have you thoroughly researched how this product displays on Zillow?”. Yes, I have. Both as a real estate broker long before I joined Zillow, and now as a Zillow employee for the last year, I’ve looked at hundreds if not thousands of listing displays on Zillow over the past six years.

      The other address you posted is listed by The Corcoran Group, not your brokerage, so I’m a little confused when you say, “My information’s almost deleted…”

    • Todd- your first example shows as “not for sale” so I don’t know what is going on there, the second one has the following “Fabienne Lecole, The Corcoran Group, (212) 360-2294, source: Corcoran”. I agree with you that it isn’t very prominent.

      IDX is the data exchange format used by most, if not all, MLS systems. This is the format that most sites use, including broker sites, to import MLS listings. Some brokers only display there own listings, and others use an iFrame around the MLS listings- which is generally really ugly- but the better broker sites all use IDX to load the data directly. Many brokers do not display where the listings come from, period. While Zillow may not feature this information “prominently” they do have it at the bottom of every listing that I have seen.

      For example, one of te sites cited above- the one in San Diego- features the listing agent similiar to the way Zillow does, but with slightly less space devoted to it.

      Another one cited above- the one in Philedelphia, lists the listing brokerage, but as far as I can tell not the listing agent. This information is found at the very bottom and not highlighted in any way to set it off from the rest of the data, the way Zillow does.

      Neither of these sites- which were presented by their owners as alternates to Zillow, are any better than Zillow about featuring the listing agent “prominently”. Both of them feature very prominent and large advertisements for their own brokerage. In fact, it is difficult to tell that their own agent/contact form is NOT for the listing agent- unlike Zillow, which makes that fact quite plain.

  46. Todd Stevens on

    The multiple eye-balls equal multi-commissions and the allowance for an agent to steer away buyers from their self-empowered direction of finding the listing themselves. In New York, almost all consumers don’t use NYC’s version of “IDX”

  47. Todd Stevens on

    I forgot Zillow hasn’t entirely tapped the NYC market, Trulia’s actually our larger challenge at this time. Still, here’s 111 West 122nd Street with three agents I haven’t heard of before – the hired one is waaaayyy at the bottom of the page. I’m sorry that I’m conflicted on updating Zillow’s listings for reasons you know. http://www.zillow.com/homes/111-West-122nd-Street-New-York,-NY-10027_rb/#/homedetails/111-W-122nd-Street-House-New-York-NY-10027/2112418676_zpid/

    • Todd – the listing agent for that property doesn’t have a free profile on Zillow. Without that, there is no way to place her in the area where Premier Agents are displayed. If she were to create a profile, she’d be shown at the top of the list in the top right corner, as well as top of the list hear the bottom of the page. For a total cost of $0.00.

  48. Todd Stevens on

    While I can’t guarantee to maintain, I will personally to this. I’ve personally found registered realtor-members not in the upper right hand. I’m nervous to support Zillow or Trulia in any way until they discontinue zip code purchasing. I’m always concerned of how hard-working agents are being fairly represented and if less hard-working agents who may live far from the represented community are inserting themselves and causing buyers to pay more money and lessen their self-empowerment. Zillow and Trulia have huge potential to take over real estate access all around the world if they discontinue zip code purchasing so I hope your company, Zillow, and Trulia will reconsider – the benefits of discontinuing zip code purchasing are exponential.

  49. I came across this article while searching for a home owner question for Zillow (since answered, not a contentious issue).

    I was entertained for several posts.

    But it does appear that Zillow has become a huge threat to real estate agents who wish to interact with buyers to use their personal charm to generate more revenue. I did purchase a house I found on Zillow. I used the listed sale prices of homes in the areas to generate my own Eestimate on houses I was interested in. This was most times inaccurate when compared to actual subsequent sale prices. Oh well.

    But to claim Zillow is useless because of their Zestimates… it does not have a strong argument. My Eestimates were pretty useful, and did indeed give me a ball park. Which I believe is what the definition of an estimate is? I didn’t see any $1m + homes Zestimated at sub $500k, or vice versa. It gave a pretty clear indication of the value of a neighborhood, which actually seemed 100% accurate from the areas I viewed. Any great anomaly between a listing price and a Zestimate infact spiked my interest: why is that more or less valuable? Clearly something Zillow doesn’t know about, which makes me think I could be getting a bargain or a treat. I’d be disappointed if Zestimates were instead Zalues. That would take the fun out of it. But Im glad to be in the right ballpark.

    Zillow provides a transparency that was lacking in agents and that drove me away from them. The buying public is screaming for a Zillow, to release us from the power of knowledge that agents are trying to pull back like a burst dam. Sorry, we are now frolicking in the water. And making our own decisions based on our criteria and market forces rather than agent induced hype and hunger for commission. (Which I don’t blame you for: everyone has to put food on the table. But when it affects my choices and decisions I do not wish to here opinion influenced by an ulterior motive).

    That said, I have found an agent who thoroughly loves Zillow and its transparency, and frees him up to focus on making the transaction go smoothly for the house that suits us perfectly. An agent should enable all that paperwork to be seamless, and be there for any questions or problems that arise. Be there to bounce concerns and enthusiasms off. Not to push me in a direction I don’t want to go.

    If you’re an honest agent you would embrace Zillow and thrive on the business it would provide you, rather than haggle over the loss of your commissions because buyers who can no longer stomach your forced opinions and price hiking motives are running from you. Perhaps its time to adapt rather than resist?

    I don’t work for Zillow, or know anyone working for Zillow. And this is probably the 2nd comment I’ve ever posted on a blog :). I do have an old twitter account that I no longer use though, in case you find one infested with bots ;).

  50. Natalie Hinnen on

    I am a real estate investor and I know Zillow can be inaccurate, but I use it to find out the market value (zestimate). I do this because when I get my homes appraised, Zillow updates without me ever touching it. Are there any alternatives for investors who do not have access to the MLS to get an estimated market value or appraised value of the property?

  51. mike spangler on

    I just checked one of my investment properties value on Redfin & it was waaaay low; no better than Zillow.

  52. I have been trying unsuccessfully to get Zillow to correct incorrect information on my house which materially affects the value. Zillow, but no other RE sites, claim that the house was bought at foreclosure which is not true. I sent the direct number for the Town Hall which confirmed what I know, but Zillow has not taken action. Really a shame that there is 0% Cust Service and taking ownership of errors.

    • That’s the thing … as much as Zillow’s folks talk about their commitment to data integrity, there’s virtually no effort made to provide data with integrity. What you’ll hear is that it’s not their fault, that it’s posted because of some mistake on the part of whomever provided that particular piece of data.

      As long as this debate has gone on, it’s really this simple … use Zillow if you want. Just know that the data is rife with errors, both in terms of homes really for sale and the usually illusory Zestimates provided. It’s like starting your search with a Magic 8 ball and then moving on to more reliable sources from there.

    • Hi Simon,

      Russ from Zillow here. Looks like someone from our Customer Care team got in touch with you last week and was able to take care of this for you.

      I’m sorry it was so difficult for you to get a hold of us for help — it certainly should not be so hard. Please let me know if there is anything else we can help you with.

      Thank you,
      Russ
      Zillow Customer Care

      • Russ on vacation and just seeing this.

        It shouldn’t be so hard to contact Zillow and I’m interested in how Zillow will fix this. There is no email and its impossible to get someone on the phone. There seems to be a major flaw in your algorithm, our house is now listed as off the market and not sold. The public records clearly states this and Trulia seems not to have a problem displaying the right data. I do not want people to be contacting me to buy the house. Please fix it.

  53. I’m not a real estate agent, but I sold my house a month ago and just got a new listing alert from Zillow yesterday on my own house! As soon as we were under contract Zillow listed the house as “not for sale,” but now it is listed for sale at the original price we set when we first listed three months ago. What’s up with that?!

    • Hi Brian,

      Russ from Zillow here. Please contact me directly at russh at zillow dot com with your complete address and we’ll have a look at this for you asap.

      Thanks!
      Russ
      Zillow Customer Care

  54. You’re never going to get people to stop searching for properties on zillow and trulia. It’s really hard to claim theft of intellectual property when it’s all publicly available information. This is a case where it’s better to join them instead of beat them, IMO.

    -Kelsey

  55. This is a very entertaining thread, but the part that boggled my mind was the naivete’ of folks who don’t understand why Zillow would have a motive for posting inaccurate data.

    Here are the facts as I see them:

    1) Zillow exists to make money.

    2) Hiring large numbers of employees to fix Zestimate inaccuracies would be costly.

    3) Zestimates are popular because they make people feel empowered. (Sadly, being accurate within 5% of a fair market value is not all that great. Buyers and sellers can get pretty bitter in negotiations revolving around just 1% of a final sales price!)

    4) If Zestimates help draw in more web traffic, Zillow can sell more advertising.

    5) More advertising = profitability.

    And this is why Zillow displays grossly inaccurate Zestimates. It is making them a lot of money.

    I am in the middle of this argument in an interesting way. I am a real estate agent, and I pay Zillow to display my ads.

    Did I hate Zillow before I “joined” them? Yup.

    Were things hard in 2010 and did I need to keep my family fed and housed? Yup.

    Can I live without the leads I “buy” from Zillow? Not yet.

    Are Zillow’s services wretchedly expensive (about 1/3 of the resulting income)? Yup.

    Once I can replace Zillow’s leads with cheaper, far better leads, will I? Probably.

    If that day comes and Zillow were to subsequently go belly up, would I be sad? Not a bit.

    Real estate is work, and I certainly work harder than a Zillow computer. And if accuracy = honesty, I’m much much more honest than Zillow’s computers!

    People argue for the obsolescence of real estate agents, and for lazy, greedy, or unintelligent agents that is probably true (I wish they would get out of the industry). But the rest of us work long, inconvenient hours and too often deal with buyers and sellers who exhibit behaviors that are stingy, unrealistic, suspicious, or downright angry. And we somehow manage to help our clients get past all that and get results that are beneficial to them.

    And besides, if good agents were indeed obsolete, the advent of the internet would have wiped out my industry, which it has not even come close to doing.

  56. Trulia and Zillow both listed the sale of my home as a Foreclosure sale. Totally untrue and caused aggravation when trying to buy my next home.

  57. Russ A. Hatfield Jr on

    Hi Gwen,

    Russ from Zillow here. Our apologies if we had incorrect data for your property. We understand how this can complicate an already trying and complex process so do work hard to remedy the mistake ASAP and, as important, work with all of our data providers to ensure we get the best data to begin with.

    Feel free to contact me directly at russh at zillow dot com if you’re still having trouble or need anything else at all. Thank you!

  58. Why can’t the MLS be viewed by all people. This is the only tool realtors have that the average person does not have. Lets be honest, from all these arguments about in accurate data then open up the database to the public. Realtors would be non existant if the information was readily available, instead you hoard it and charge large commissions for adding no value and confusing paper work.

    • Totally Agree with this comment. Of course Zillow is not perfect but it is the best thing out there for people not in the Realtor(c) (Trademark obnoxiously emphasized) club.

  59. When using google – use the bolean indicator “-” to exclude zillow, trulia et al

    so -trulia -zillow -mhvillage etc in your google search will stop zillow etc coming up in your searches!! :)

    I use it all the time. no trulia or zillow for me :) spread teh word!!!!

  60. Checked my house recently, just out of curiosity, and they had another house listed. The house was similar to mine, but it wasn’t our home. Plus we are on 1 acre lot vs the home listed was on a 1/4 acre. Be careful with Zillow my friends. :-)

  61. Trulia and Zillow don’t have direct access to the local MLS information and will always be off on their numbers. But the worst is that they are not updated on the correct status of homes for sale and I get lots of buyer wanting to look at homes that are already sold.

  62. I just finished a blog post about the accuracy of Zillow Zestimates. In one of the towns I service, Tewksbury MA, there were 30 homes that sold. Tewksbury has a median house price of about 330,000. On the whole Zillow was 6.2 percent to low leaving an average of $22,000 on the table per home.

  63. This is so true even after 2 years of this articles, the prices within the same houses are different. One house with same Sq.Ft same lot size. Everything same is 206k and other one 189k, Same Design too, everything same other than color from outside.

  64. This may have been said already but the problem with Z Estimates is they don’t use a human to differentiate valuations. They use formulas to make assumptions. Those assumptions can cost a seller thousands and tens of thousands. The formulas appear to be particularly skewed in waterfront areas. On the water and across the street from the water matters tremendously and I’m pretty sure they haven’t figured out how to formulate those assumptions.

    They also don’t/can’t take into consideration non-public information such as new roof required, trashed inside, brand new inside, gutted, completely re-done etc.

    If I took 1 million homes and randomly assigned values using AVERAGE historical sales data I’d nail a percentage of valuations precisely, purely by chance. Those who watched or relied on my predictions and sold their property accordingly would say I was absolutely spot on and to trust me. If I added other public source data I’d nail even more as a percentage. But formulated averages without the human element will never achieve the same level of accuracy. Accuracy that only matters when it’s time to sell. Then that accuracy can cost considerably.

    The only way they can have access to the non-public information that is required to achieve a the highest level of accuracty is to have access to the agents/brokers who conducted the transaction. It’s easy to see why Zillow would want to buy Trulia. Trulia has a trust level with consumers and agents. But once agents collectively realize they are needed more by Zillow than they need Zillow this whole arrangement could come crashing in.

    It’s time for a reset with proper valuation given to the human elements involved and a reassessment of the value of websites that redirect traffic and charges agents/brokers.

  65. It’s a straw-man fallacy you attempt to create. I don’t need Zillow to be 100% “Accurate” (whatever that means) to be valuable resource for my investing process. Of course a property that needs a new roof is going to be worth less than one that has a new one. Of course Zillow isn’t going to have this data in it at the meta level. Zillow is a problem only for people with poor understanding of markets, prices, and data. People need to be educated (buyer as well as brokers). Quality Realtors know how to leverage Zillow and how to work with clients to educate them on how to use it.

    It’s amazing that Realtors, given their incredibly bad predictions on housing circa 2006, still bash Zillow and insist they are the only ones that really are qualified to present pricing data.

  66. I’m not sure why people are still trying to use the argument that zestimates are not accurate. We all know that. And therefore all the reasons why it’s not accurate is a moot point. Zillow themselves know they can’t be accurate and hence don’t call them Zaccurates.

    Zillow provides a ballpark impression of values of and within neighborhoods. Zillow may be costing agents $1000s of dollars but they are saving buyers $1000s. Anytime the market moves towards a free market model the middlemen lose money. Technology has removed lots of middlemen/processes, and it seems agents of low value (those lacking negotiation, people, and broker admin skills: agents who do will thrive) are next. Forums like these show they’re not going quietly ;-).

  67. Yeah, Wikipedia has inaccuracies too, and Encyclopedia Britannica complained very loudly about that, but for some reason EB disappeared and Wikipedia is still there. Why do you think? Investors need input from *disinterested* *3rd* *parties*, even if that input is imperfect. You assume buyers will get better info from real estate agents. Why? You are clearly an interested party who liked the old way of doing things, because you could spoon feed your customers with the info you provide. If you are so good, you need not worry about Zillow. Go compete, earn your money, and quit trying to play God and trample of the freedoms of your customers to seek a 2nd opinion.

  68. I haven’t read through all the years of comments above, and as such this may be repetitive.

    However, I just wanted to add that I appreciate Zillow. I’m not an investor. If I miss something that was up a week ago and sold I was going to miss it anyway because I’m not buying in cash. Having the sales history of a home makes a huge difference to me. Seeing that a home has been on and off the market repeatedly over the last two years, with price drops and higher re-listings, makes a difference to my decision on buying. I bought at the wrong time last time, believing prices were at the bottom, even though the amount of time a house was on the market may have told me otherwise. According to zillow, sales prices have dropped almost 3% in the last year. Perhaps the zestimates are off (thanks for the link, in LA they are off by less than 10% over 80% of the time), but the ORIGINAL LISTING prices in my area are much further off from the SALES prices than the Zestimates are.

    Here is my issue with zillow–real estate agents. My agent is great and I love him (somehow like senators I guess). Too often houses that have listings removed are listed as sold by the agent to juke their stats, or the home is listed as sold twice because the realtor and public records put the sale in. It has inflated the number of sales and sometimes the sales prices in my area. Price drops also seem to occur after a deal is made, making it seem the discrepancy between sales price and listing price is very little. I can see the order of the signs (up, down, up, down, up, sold) and what actually seems to happen on zillow (listed, sold, listed, sold, listed, price drop & sold). I’ve tried to flag properties when this happens, especially with a couple of agents in my area who do this every time, and zillow informed me I cannot correct inaccuracies unless I am the agent or owner.

    I hope they find a way to address this, but limiting agents’ ability to fudge info may limit agents’ willingness to post on zillow.

  69. If a house on Zillow is for sale, it says “For Sale” if not it does not, my house was on Zillow when the previous owners listed it, I don’t know how to get it off so I just updated the errors and made sure it is listed as “Sold”. The problem is they have to really make that CLEAR. We are getting phone calls from “leads” and one Realtor finally told us where they got the lead from, guess who I am going to file a complaint against. We are being harassed day and night, home and my husband’s cell. I just see idiots that work for places like site I am about to file multiple complaints about with the BBB my AG and anybody else I can think of looking on Zillow and not paying attention to the status, would not be at all surprised. That said, Realtor take note; if we ever do decide to sell in the future, we have a list of all the Realtors who called us (many multiple times) over said “lead” which is actually garbage. Guess who we will NOT do business with, ever?

  70. I am an investor and own several rental properties. I recently complained to Zillow about erratic data in several Zillow estimates.

    All of a sudden (within 48 hours of my complaint) all of the properties I own had their “make me move” prices taken off (all at once) even though I had recently “renewed” several of them, and I can also no longer get into Zillow using the account that I “claimed” the properties with.
    I know my password is correct (I have a password manager) but the site says it isn’t, and when I go to recover/change it, the website now just ends the process with “ERROR” I started a case with customer service 5 days ago and got an automatically generated email, but no other response since… Just in case, I started another case, got the auto-response, and haven’t received any reply on that either…. I don’t know if I have been blocked, or what is happening (I have no way of knowing for sure) but the timing is amazing, and the response is nonexistent. (Stay Tuned)

    As for “Zestimates” themselves… They are absolute junk. Actually worse than junk, because they tout them as having value, and quite a few people listen. I have 3 properties that are identical (yes literally identical) on the same street, built at the same time, by the same builder, with the same floor plans, same amenities, lot size. etc. etc. Zillow shows them at various times being as much as a 25% difference in value… I have other units that have (according to Zillow) gained and lost 25% of their value is a day, only to gain or lose it back a month later (for no good reason) and then have the whole affair disappear a month after that. Imagine trying to buy or sell looking at THST kind of estime(s). Completely…. Demonstrably….. Preposterous.

    The problem is that some times, people have to sell. And sometimes quickly Luckily I am not in that situation, so I am not making a “my house is worth more” argument, but I digress….When Zillow gets is worng (and they often do) somebody gets hurt, and the house that sold for a lower value (based on a faulty estimate from Zillow) goes into the next “Zestimate” and down we go in a spiral… Meanwhile, Zillow tells desperate agents, they “need” them to sell houses. The quintessential “self fulfilling prophecy” in this case with something to gain by Zillow perpetrating it….

  71. Trulia is just awful, so misleading to the non-realtor consumers out there. They display inaccurante information and inaccurate photos. TRULIA ONLY EXISTS TO PROFIT OFF OF REALTORS. When a realtor signs up to use Trulia’s service, the customer sevice is just awful – you can be on hold for almost ONE HOUR before someone finally picks up the phone. And then to get anything fixed – it takes FOREVER. The public needs to know how inaccurate and misleading all of their information is. All realtors should just BAND TOGETHER and TOTALLY STOP using their services and paying for services that just aren’t worth it.

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