Has Zillow finally gone off the deep end?

Buying & Selling Real Estate
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Has Zillow finally gone off the deep end?

Charlie MacPherson
China, ME · Member since 2014 · 3k+ posts · 4k+ votes

I had to share this - I just couldn't resist!  

Zillow's "Zestimates" are legendary for their inaccuracy, but this one takes the cake!

2900 Cranberry Hwy, Wareham MA.  A mobile home, built in 1976 - 2 beds, 1 bath, 900 square feet.  

Zillow lists the land at 7 acres - which is probably the entire trailer park.

Probable value for the trailer is somewhere around $50,000 if it's in good shape.

Zillow says $1.808 MILLION!

This is why I'm not worried about Zillow, Amazon or anybody else eliminating the role of a good real estate agent.  Not everything in the world lends itself to automation - and this is Exhibit #1.

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Russell BrazilBusiness Member
Moderator
Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
8y

A good agent also knows how to manipulate Zillow into upping the Zestimate on a property. Every property I list, I go in and make some changes to the Zillow profile to increase the Zestimate. While it doesnt necessarily affect my selling price, there is always the possibility of some buyer relying on it too much and will overbid because the Zestimate is $25k too high.

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  • Cara Lonsdale
    Realtor and Investor · Scottsdale, AZ · Member since 2017 · 1k+ posts · 1k+ votes
    8y

    This is hilarious (in a very scary way).  I'm showing this to every lender who uses Zillow to "appraise" my properties for refis.  lol

    This is job stability in my book. (:

    1Reply
  • Omar Khan
    Rental Property Investor · Dallas, TX · Member since 2017 · 1k+ posts · 1k+ votes
    8y

    @Charlie MacPherson The role of the RE agent will change with time but I doubt it can be completely eliminated. 

    I would be very skeptical of the capabilities of a professional who would solely rely on Zillow to form their purchase decisions.

    Thanks for posting this.

    0Reply
  • Chris MasonPro Member
    Moderator
    Lender · CA · Member since 2015 · 9k+ posts · 10k+ votes
    8y
    Originally posted by @Cara Lonsdale:

    This is hilarious (in a very scary way).  I'm showing this to every lender who uses Zillow to "appraise" my properties for refis.  lol

    This is job stability in my book. (:

     Every lender knows Zillow is crap, plenty of internal email chains making fun of Redfin/Zillow/etc. So is the number that 90% of homeowners give you. It doesn't really matter. On a refi, you need to get the appraisal ordered and back to figure out your options, especially if it's a cash out refinance. 

    For myself, I spend more time talking about how to 'help' the appraiser hit the highest value possible than I do talking about Zillow numbers, or promising specific numbers prior to having that appraisal back. Well over half of cash out refinances, the loan amount changes (sometimes up, sometimes down) once we get the appraisal back.

    0Reply
  • Cara Lonsdale
    Realtor and Investor · Scottsdale, AZ · Member since 2017 · 1k+ posts · 1k+ votes
    8y
    Originally posted by @Chris Mason:
    Originally posted by @Cara Lonsdale:

    This is hilarious (in a very scary way).  I'm showing this to every lender who uses Zillow to "appraise" my properties for refis.  lol

    This is job stability in my book. (:

     Every lender knows Zillow is crap, plenty of internal email chains making fun of Redfin/Zillow/etc. So is the number that 90% of homeowners give you. It doesn't really matter. On a refi, you need to get the appraisal ordered and back to figure out your options, especially if it's a cash out refinance. 

    For myself, I spend more time talking about how to 'help' the appraiser hit the highest value possible than I do talking about Zillow numbers, or promising specific numbers prior to having that appraisal back. Well over half of cash out refinances, the loan amount changes (sometimes up, sometimes down) once we get the appraisal back.

     Very true.  But don't you think that servicers still use this when you contact them to remove mortgage insurance?  I know this is AFTER you are already done with a client (since you work on the front end of the loan), but if you contact the loan servicer holding your note and ask them to remove mortgage insurance (knowing that values have increased), they often refer to Zillow to give you an answer.  If you want to challenge it, then they require you to pay for an appraisal (which in most cases, is worth it).

    0Reply
  • Chris MasonPro Member
    Moderator
    Lender · CA · Member since 2015 · 9k+ posts · 10k+ votes
    8y
    Originally posted by @Cara Lonsdale:
    Originally posted by @Chris Mason:
    Originally posted by @Cara Lonsdale:

    This is hilarious (in a very scary way).  I'm showing this to every lender who uses Zillow to "appraise" my properties for refis.  lol

    This is job stability in my book. (:

     Every lender knows Zillow is crap, plenty of internal email chains making fun of Redfin/Zillow/etc. So is the number that 90% of homeowners give you. It doesn't really matter. On a refi, you need to get the appraisal ordered and back to figure out your options, especially if it's a cash out refinance. 

    For myself, I spend more time talking about how to 'help' the appraiser hit the highest value possible than I do talking about Zillow numbers, or promising specific numbers prior to having that appraisal back. Well over half of cash out refinances, the loan amount changes (sometimes up, sometimes down) once we get the appraisal back.

     Very true.  But don't you think that servicers still use this when you contact them to remove mortgage insurance?  I know this is AFTER you are already done with a client (since you work on the front end of the loan), but if you contact the loan servicer holding your note and ask them to remove mortgage insurance (knowing that values have increased), they often refer to Zillow to give you an answer.  If you want to challenge it, then they require you to pay for an appraisal (which in most cases, is worth it).

    AVMs are garbage; if you want the real answer then you have to pay for at least a drive-by BPO, if not a full appraisal. This has always been true, AVMs are always crap, you will/would always need a full appraisal to capture the full value of your property. 

    The only thing new here is that with Zillow the garbage AVM number is publicly visible. Before, you'd be on the phone with someone and bleep bloop beep bloop their computer would spit out a number, and unless you pay for an appraisal, that's the number they are using.

    1Reply
  • Joe SplitrockPro Member
    Moderator
    Rental Property Investor · Sioux Falls, SD · Member since 2015 · 9k+ posts · 18k+ votes
    8y

    @Charlie MacPherson I just looked at a triplex on the MLS and it shows that it last sold for $690K on Zillow, with the property listed for $370K on the MLS. Then looking closer, I see that there are two identical neighboring triplex for sale. They were previously purchased together, but Zillow doesn't have any way to know they should split the value between the two properties. Only human intervention would figure this out. I assume it is same situation with the trailer. The entire park is being listed under a single property.

    I know people like to bash Zillow, but for all its shortcomings, they have pretty good data gathering algorithms. For years agents have told me, "pay no attention to Zillow" but I have gathered some very helpful information on Zillow. It is an amazing tool. Just wait until they purchase BiggerPockets, LOL. Seriously though it isn't that far fetched.

    1Reply
  • Chris Szepessy
    Catskill, NY · Member since 2018 · 636 posts · 668 votes
    8y
    When I refinanced my primary home, Zillow’s zestimate was within $500 of the appraisal. It seems to be pretty accurate in my area, but I have seen some where the zestimate isn’t even close. It was closer than this one million dollar trailer, but still pretty far off.
    0Reply
  • Jonathan Bowen
    Real Estate Broker · Stoughton, MA · Member since 2012 · 109 posts · 96 votes
    8y

    I can't believe I'm going to defend Zillow here... Holy ****! Zillow is valuing the 7.6 acre lot at $1,808,735. The mobile homes located at 2900-R Cranberry Highway may not be considered real property so Zillow may not value them separately or, most likely, at all. The assessed value of 2900-R Cranberry Highway is $1,800,000 so Zillow, most likely, is simply adding random numbers to the assessed value. 

    3Reply
  • Russell BrazilBusiness Member
    Moderator
    Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
    8y

    A good agent also knows how to manipulate Zillow into upping the Zestimate on a property. Every property I list, I go in and make some changes to the Zillow profile to increase the Zestimate. While it doesnt necessarily affect my selling price, there is always the possibility of some buyer relying on it too much and will overbid because the Zestimate is $25k too high.

    [email protected]301-893-4635Podcast Guest on Show #192
    District Invest Group545 Reviews
    WebsiteView Page
    9Reply
  • Aaron K.
    Specialist · Riverside, CA · Member since 2015 · 6k+ posts · 3k+ votes
    8y

    @Jonathan Bowen is correct Zillow is most likely valuing the mobile home park and not the mobile home itself.

    1Reply
  • Jenifer Levini
    Attorney · Santa Cruz, CA · Member since 2015 · 345 posts · 358 votes
    8y

    I'm curious how @Russell Brazil can manipulate the zestimate?

    1Reply
  • Eric VanKirkPro Member
    Property Manager · Houston, TX · Member since 2009 · 25 posts · 6 votes
    8y

    I always love when I show up to a listing presentation and have the sellers show me a "Zestimate" and ask why my number is different.  It allows me to show my expertise in pricing properties and the detail I go through to make sure their house sells for the highest price the market will bear.  The first few times I was a little frustrated at the time it took to defend my  number and worry the next agent  would take the listing regardless of whether or not they could sell the house at that price, but now I welcome it.  I almost prefer it...

    1Reply
  • Russell BrazilBusiness Member
    Moderator
    Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
    8y
    Originally posted by @Jenifer Levini:

    I'm curious how @Russell Brazil can manipulate the zestimate?

     By editing all the details of the house

    [email protected]301-893-4635Podcast Guest on Show #192
    District Invest Group545 Reviews
    WebsiteView Page
    2Reply
  • Rachel H.
    San Antonio, TX · Member since 2009 · 3k+ posts · 1k+ votes
    8y

    @Charlie MacPherson Wow! And look at that monthly payment. :P 

    0Reply
  • Account Closed
    Tampa, FL · Member since 2018 · 51 posts · 53 votes
    8y
    Originally posted by @Charlie MacPherson:

    I had to share this - I just couldn't resist!  

    Zillow's "Zestimates" are legendary for their inaccuracy, but this one takes the cake!

    2900 Cranberry Hwy, Wareham MA.  A mobile home, built in 1976 - 2 beds, 1 bath, 900 square feet.  

    Zillow lists the land at 7 acres - which is probably the entire trailer park.

    Probable value for the trailer is somewhere around $50,000 if it's in good shape.

    Zillow says $1.808 MILLION!

    This is why I'm not worried about Zillow, Amazon or anybody else eliminating the role of a good real estate agent.  Not everything in the world lends itself to automation - and this is Exhibit #1.

    Amazon > Zillow. If Amazon ever wants to "displace" rental agents, they can do so quite handily. Point being, never said what Amazon can't do because every single time Amazon is bet against, they win. 

    0Reply
  • Chris MasonPro Member
    Moderator
    Lender · CA · Member since 2015 · 9k+ posts · 10k+ votes
    8y
    Originally posted by @Russell Brazil:
    Originally posted by @Jenifer Levini:

    I'm curious how @Russell Brazil can manipulate the zestimate?

     By editing all the details of the house

    And if the buyer comes back with "but Zillow said it was a 2 bathroom!" you can come back with "well that's what you get for trusting Zillow data" haha.

    1Reply
  • Bryan Feik
    Investor · Denver, CO · Member since 2017 · 36 posts · 33 votes
    8y

    Agents love to bash Zillow because it threatens the 5 - 6% commission that was justifiable only  prior to the internet age. Of coarse a Zillow estimate will never be as accurate as an appraisal however in my experience it is usually within 5%.  There will always be exceptions like the trailer which the Zillow algorithm obviously thinks is on 7 private acres.  

    I have purchased two homes using Zillow to identify properties in my target area which were previously on the market and never sold.  I then contacted the owners directly and we were able to come to terms without without Agent interference and overpriced commissions.  

    1Reply
  • Charlie MacPherson
    OP
    China, ME · Member since 2014 · 3k+ posts · 4k+ votes
    8y

    @Bryan Feik Agents love to bash Zillow for a few reasons - and commission isn't one of them.  Here are my top 5.

    1. They spend phenomenal amounts of money to outrank everybody on Google searches.  It makes PPC advertising extremely difficult and impractically expensive for agents.  I get that it's a free marketplace, but Zillow has taken an enormous bankroll and used it to shove agents out of the way.

    2. Zillow's massive ad spend is highly effective at getting in between agents and clients.  Zillow "intercepts" these clients and sells their information at very high prices to agents.  Worse, they sell the same information to several agents at the same time, making an agent's ad spend with Zillow a very poor bet. To be fair, Realtor.com, Trulia (also owned by Zillow Group) and others do the same.

    3. Their data is sometimes right, and sometimes dreadfully wrong.  I was selling Unit 1 of a 2-unit condo.  I got an IRATE call from another agent, furious that I had used her photos for the listing (I hadn't).  It took a while to figure out what the issue was, but Zillow had taken my Unit 1 listing and combined it with an old Unit 2 listing and created a completely new listing that has never existed - and both of our photos were right there in the fictitious listing.

    Here's another. 4 years ago, I was selling the assets of my small business (tourism for wildlife photographers) for $25,000 and listed that sale in the "Business Opportunity" section of MLS. Sure enough, Zillow listed my $500,000 home for sale at $25,000 and the photos were of polar bears, caribou and wolves.

    4. Their Zestimates create friction with clients - especially sellers, who demand that listing agents overprice a home to match Zillow's figure.  Overpriced homes just sit on the market and get stale - and of course the agent gets blamed.

    5. Zillow's accuracy claims vary by market, but in the Boston market, they claim to be within 20% of the actual market value 80% of the time.  

    So on a $500,000 home, they claim to be within $100,000 of the actual market value 80% of the time.  That also means that 20% of the time, their Zestimate will be wrong by MORE than $100,000.

    So no, commissions have nothing to do with my dislike of Zillow.  

    1Reply
  • Chris Purcell
    Investor · Philadelphia, PA · Member since 2010 · 739 posts · 372 votes
    8y
    Originally posted by @Chris Mason:
    Originally posted by @Russell Brazil:
    Originally posted by @Jenifer Levini:

    I'm curious how @Russell Brazil can manipulate the zestimate?

     By editing all the details of the house

    And if the buyer comes back with "but Zillow said it was a 2 bathroom!" you can come back with "well that's what you get for trusting Zillow data" haha.

    And then the buyer reads this thread

    3Reply
  • Steve Bracero
    Real Estate Agent · Westboro, MA · Member since 2016 · 1k+ posts · 471 votes
    8y

    @Charlie MacPherson

    Zillow is interesting! The zestimates can be an indicator for sellers to have a quick view of what their home is worth.... which can be frustrating. It absolutely creates  friction with homeowners with their data 

    1Reply
  • Jonathan Bowen
    Real Estate Broker · Stoughton, MA · Member since 2012 · 109 posts · 96 votes
    8y

    Your bitterness is showing @Bryan Feik...

    1Reply
  • Sam Josh
    Sunnyvale , CA · Member since 2017 · 373 posts · 362 votes
    8y
    I love Zillow, Trulia and Redfin. Estimates may never match to the penny but they are quite close to reality. There are outliers. For example, if you bought land and developed a home on it, Zillow will get confused for a while because they knew the land but were not aware of your new home. Same with Home additions, it will take Zillow to take time to catch up.
    1Reply
  • Charlie MacPherson
    OP
    China, ME · Member since 2014 · 3k+ posts · 4k+ votes
    8y

    @Sam Josh You should read Zillow's own statement about their Zestimate's accuracy - as I referenced above.

    As an example, the day before I listed my own home for sale in late 2016, Zillow and Trulia (both owned by Zillow Group) disagreed on my home's value by $60,000 - and the house sold for $481K.  

    Trulia was drastically low (about $420K IIRC).  Zillow was closer, but still low.

    0Reply
  • Cara Lonsdale
    Realtor and Investor · Scottsdale, AZ · Member since 2017 · 1k+ posts · 1k+ votes
    8y
    Originally posted by @Joe Splitrock:

    @Charlie MacPherson I just looked at a triplex on the MLS and it shows that it last sold for $690K on Zillow, with the property listed for $370K on the MLS. Then looking closer, I see that there are two identical neighboring triplex for sale. They were previously purchased together, but Zillow doesn't have any way to know they should split the value between the two properties. Only human intervention would figure this out. I assume it is same situation with the trailer. The entire park is being listed under a single property.

    I know people like to bash Zillow, but for all its shortcomings, they have pretty good data gathering algorithms. For years agents have told me, "pay no attention to Zillow" but I have gathered some very helpful information on Zillow. It is an amazing tool. Just wait until they purchase BiggerPockets, LOL. Seriously though it isn't that far fetched.

     I can second this.  I purchase a gemini (which is basically a duplex where each side is individually owned) at trustee sale.  Zillow had the property listed as 2 units, but it isn't.  Thankfully, I knew the neighborhood structure and knew that only 1 unit conveyed with the sale (and which unit it was), but it would've been really disappointing to find out that I only bought 1 unit if I thought there were 2 included.

    0Reply
  • Matt M.
    Realtor · Denver, CO · Member since 2013 · 2k+ posts · 1k+ votes
    8y
    Originally posted by @Russell Brazil:

    A good agent also knows how to manipulate Zillow into upping the Zestimate on a property. Every property I list, I go in and make some changes to the Zillow profile to increase the Zestimate. While it doesnt necessarily affect my selling price, there is always the possibility of some buyer relying on it too much and will overbid because the Zestimate is $25k too high.

    I've had agents submit offers based on the Z price when it was cheaper in the MLS...

    0Reply
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