Updated over 6 years ago on . Most recent reply
Zillow Adjustment Factor
I'm looking at a SFH portolio. The selling price of the portfolio is discounted based off the Zillow price. We all know there can be wild error bars on that price however there is some value in an algorithm pooling data from home sales. I've toured all the properties, took pics, made notes, the usual stuff and as I tried to come up with my own value I came up with a scale to consider improvements needed vs the current Zillow price.
| Scale | Adjustment Factor | |
| 1 | Tear Down | -60% |
| 2 | Major Repair | -35% |
| 3 | Significant updates needed | -15% |
| 4 | Cosmetic updates needed | -5% |
| 5 | Zillow value - intentionally above average as Zillow factors in "sale ready" condition | 0% |
| 6 | Major improvements | 10% |
| 7 | High end value added everything | 25% |
You'll notice that I consider "Zillow value" to be a 5 (greater than average) as my assumption is that most properties that are for sale are also above average outliers (on either side) factor out in to the "noise".
Thoughts?