How accurate are Zillow house values?

Question

I compare what I think my rentals are worth compared to what Zillow says.  Some are close others are way off!

Bryan L. · Answer

Account Closed  - Man you are so right.  I also do a little Realtor work and we Realtors generally HATE Zillow.  We go in to get a listing and the seller starts telling us that Zillow says it's worth 220, and we know it's only worth 180.  And we can't get the listing.  Hate it.

Aaron Montague · Answer

I'm with Elizabeth  Colegrove on zillow.com. It's a good place to start looking. Once you start digging, you can do your own homework.

Mark Ferguson · Answer

@Darrell Shepherd good point,   I think Zillow has some great info besides values.

Elizabeth Colegrove · Answer

Honestly I use it as a good start. Mostly I focus on what the other houses in the neighborhood went for. I look at the data as a whole and ignore the anomaly's.

Bryan L. · Answer

At least in TN, when a bank takes a house back - when the bank gets the deed.  The transaction is usually recorded at the courthouse as a transfer at $______ .  The amount in the blank is the total amount that is owed at the time of repo and may include attorneys fees, penalties, and other costs.  So, it has no actual representation of the actual value of the house.  But Zillow will report this as a "sale".  So, even if investors are ignoring the Zestimate and are only looking at the reported sales, they are getting bad information unless they know how to weed through the mess.  Another good reason to become a Realtor and get MLS access.

Mark Ferguson · Answer

I didn't know they did that @Bryan L. , that is ridiculous.

Aaron Wall · Answer

Bryan, You said it brother, I was trying to be diplomatic, but "sucks" sums it up

Bryan L. · Answer

They also report bank repos as "sold".  In other words, when a bank loaned someone $130,000 interest-only back in 2007 on a $100,000 house, and they have recently foreclosed on it (with an additional $12,000 in fees, expenses, etc) - when this goes through the courthouse steps and the bank gets it back, it is recorded as a $142,000 "sale".  And that's how Zillow reports it.  They report this as "most recent sale = $142,000".  Obviously this could be 2X what the house is really worth, especially if repairs are needed.  Zillow just plain out sucks.

Mark Ferguson · Answer

very true.  I also doubt they consider Dom, concessions or repair factors of other comps which make a huge difference.