How accurate is Zillow

Question

Hi I want to know how accurate zillow rent estimates, their "zestimates" and the comparable comps they give. Also is there any other website that gives you compts and rent? other than zillow and rent-o-meter?

Thank you!

Elizabeth Colegrove · Answer

Zillow is an AMAZING asset. So much so that it is one of my favorite resources because it is so multi-faceted as there are so many great uses.

• Comparables for Rentals – Zillow is one of my highest rental traffic sources. Therefore when I am figuring out the comps for my house, I look at the houses available on that site.  It is important to check the date available as there are houses available months in advance and old ones too. It is a great one stop shop to see what other rentals are going to be listed for comparing to my place.
• Postlets Platform – I love postlets because it is a one stop shop. I post one *free* ad and it goes to 20+ different sites. My  top 3 referral sources are: Zillow, Trulia,  and Hot Pads. Honestly I have such great feedback from just these three that I rarely have to post.
• Finding a Realtor– When you are coming into a new area finding a realtor can be hard if you don’t have friends to offer great recommendations. When family members of mine wanted to sell their house across the country from where I lived I found a great realtor by reading all the reviews on Zillow, sending out emails to the top agents, and then interviewing them.
• History– I love that it gives me a snap shot of what the house was sold for! Although it is important to double check as this is sometimes wrong or recording a refinance, etc., it is a great place to see what they paid for the house versus listing sale price. It often gives you a place to start negotiations and for you to see their profit margin.
• School Ratings- Although I definitely recommend you double check the Great School scores; I love that it gives me a great starting point. I don’t have to research all the sites individually- zillow automatically provides this score.

As discussed above  there are great benefits of Zillow. Be warned though-   this site has a few “warts” that one needs to keep an eye out for:

• Estimates aren’t Correct– Zestimates are a great starting place but in most markets they are drastically wrong. Do not operate off them- either the for sale or the rent data.
• For Sale Data Accuracy– I have found that this data tends to be more outdated than realtor.com. So I tend to use my agent/realtor.com for the up to date information.
• For Rent Data– I love this source but watch it. While postlets expire after 30 days, sometime realtors won’t take the house off the market right away. So your competition really might not be your competition.
• Sold– While I don’t have any experience I have been told that the sold figure both in the listing on the house and as the “yellow” sold houses can be off.
• Squarefootage, Bed/Bath off– This information has been pulled from the tax record so sometimes the information can be wrong. Also, some areas count basements and other don’t, etc. Therefore always confirm with the source if it is important.

All of that being said, this is one of my favorite “online” tools as an investor!  As long as you use it as it is intended and know the downfalls you will be a better position than if you didn’t know about this awesome tool.