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.
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.
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