Zillow skewed zestimate

[Kumar Gaurav]

When house hunting my first home I used zestimate as a ballpark estimate in placing offers .Now that I am planning to sell my home I see that zestimate is awfully skewed as other highly similar homes in my neighborhood are zestimated at a much higher price and and I presume most potential buyers perceptions are colored by the zestimate tool in zillow.Is there anything I can do to address this discrepancy in zestimate?

[Tue Huynh-Nhut Vo]

@Kumar Gaurav

The perception of the Zillow zestimate isn’t great. I don’t know anyone who would pay any number they churn out.

The best ways to get an estimate on the property value are by comps and appraisals. Appraisals will run you ~$400-500. Agents can get you comps on recently sold properties similar to yours.

I strongly advise to turn a blind eye to any MLS "estimates".

All the best,

[Caroline C.]

@Kumar Gaurav Zestimate is only as good as the homes in the neighborhood that Zillow arbitrarily picked to include in it's calculation. I own one home that shows Zestimate as under $30k when it really is more like $70k and I own another where the Zestimate shows as over $350k when it really is more like $250k. In both cases it picked poor nearby homes as comps.

The best thing to do is look at the map at the home of interest and choose to look only at 'sold' homes - select sold and deselct for sale, potential listings and for rent. Then you can pick a few recent solds in the same area with similar size and bedrooms, look at the photos to judge condition of home, and do your own comps analysis. Or work with a realtor who can run actual comps.

[Bob Daniels]

Zestimate is trash.  I have a home in a subdivision with the exact same floor plan as the house across the street and that house sold for 220k.  All of the comps are right around 220k, but for whatever reason my homes zestimate is at 200k.  If I update the homes info (not change any information, just hit the update button) it instantly pulls a new zestimate for my house at 220k.  Then a week later it will revert back down to 200k unless I hit the button again.

[John Teachout]

Originally posted by @Bob Daniels:

Zestimate is trash.  I have a home in a subdivision with the exact same floor plan as the house across the street and that house sold for 220k.  All of the comps are right around 220k, but for whatever reason my homes zestimate is at 200k.  If I update the homes info (not change any information, just hit the update button) it instantly pulls a new zestimate for my house at 220k.  Then a week later it will revert back down to 200k unless I hit the button again.

 Ha! I just tried this with a grossly underpriced property. ie, I went through the edit process but changed nothing. It changed the Zestimate from $74,000 to $95,000 which is what the home recently appraised for. I've got another property I'm going to try that with. It's in a cookie cutter subdivision but zestimated about $20k lower than all the recent sales for no known reason.

[John Teachout]

Tried it again, $94,800 to $106,000. Nothing changed, just clicked edit facts. Pretty lame, eh?

[Jim Goebel]

@John Teachout

@Bob Daniels

I've noticed the same thing, a couple properties are way off and then when you hit 'edit' in a couple cases the estimate jumped up over $100k. 

I do think bad data is better than no data, with regards to the Zestimate...

My 'give them the benefit of the doubt' in their algorithm is that perhaps us folks that are interested enough to actually click on the 'Edit Facts' button (us) do correlate to being relevant to adjusting value - vs those that don't.  Of course, this doesn't make sense when the value reverts back.  Sounds glitchy, more than anything.

[John Teachout]

I've discussed a theory with my wife that perhaps Zillow "devalues" properties that they know are rentals since they've been listed on their site as such. That's purely speculation but since they've started "buying" houses online, it makes me curious if they're messing with things to make their lowball offer more appealing to a frustrated landlord. I don't currently have anything regarding that other than speculation. Maybe I'll try the "increase value" trick with my current residence which has never been a rental.

[John Teachout]

Tried personal residence that was never rented. It knocked it down by $2,200. Now this is odd as properties have been appreciating around here for the 10 years. That number is probably not that far off though.

[Russell Brazil]

The Zestimate is as good as what you paid to get it.

[Bob Daniels]

@Russell Brazil This is true, and we as investors know how garbage of a number a zestimate is.  However right or wrong many potential homeowners use this number as a gauge when looking at properties and when submitting an offer, regardless of what their agent tells them.  It doesn't matter if your selling, or renting, if the zestimate doesn't line up with your asking price you will see significantly less inquires. 

@Jim Goebel

@John Teachout

How many photos of the property in question do you guys have uploaded?  I read somewhere that back in June (when my trouble started) that they upgraded their pricing algorithm and now Zillow could essentially 'read' your pictures to tell how updated and modern your home was, if it had granite countertops or formica etc.  As this is an occupied rental house I only have one picture of the outside uploaded and I'm wondering if I'm being dinged in price for that.

[Keith Perkins]

@Kumar Gaurav  Sounds like you want to sell your house.  The value of your home is what someone is willing to pay of it not what a computer algorithm says your home is worth.  Once a buyer falls in love with your house they will make an offer and then you start negotiating with them.  Just because you use a website for values doesn't mean that 100% of the people looking to buy your house will be doing the same.  Good luck with your sale!  

[Jim Goebel]

@Bob Daniels

We do have numerous pictures up for the two data points I mentioned.  My wife mentioned the same thing with regards to them starting to utilize machine learning to interpret pictures.

@Russell Brazil

Although I understand the perspective, I think real estate agents consistently trashing zillow crosses over into (at times) conflict of interest territory.  The fact that numbers/data driven valuation methods undercuts brokers' and agents' (past assumed) authority on pricing I think speaks volumes as to why so many agents are quick to go out of their way to trash it.

[Russell Brazil]

@Jim Goebel

Or its simply absurd to be able to value a property without seeing the inside of it.

You dont need to be an agent to value a home, you need to be a human being, and to see the inside of it. The op isnt an agent and hea complaining about the innaccuracy of the algorithm.

[Jim Goebel]

@Russell Brazil

Well I disagree, but I don't have a dog in the fight.  Zillow has done a nice service to customers/consumers, in sharing lots of publicly available information.  As with most industries transparency helps consumers, at the expense of those enjoying the information asymmetry advantages (in this case, RE agents and brokers).  

The OP stated a question with the presumption (that's true, by the way) that the PERCEPTION of the market matters in regards to the valuation of the Zestimate.  Maybe this doesn't matter for you, but it does matter for many, many people - and therefore it DOES affect prices.  If you're representing a client, (say on the seller side) and a mention comes up of this, in my opinion we're all looking right past reality to act as though these estimates do not matter at this point given that a large % of sellers and buyers lean on them for a data driven point of reference.

[Sean Ybarra]

@Kumar Gaurav

Zestimates are useless, in my experience they’ve often over valued things. My best advice is to use realtor.com along with Zillow and look at the recently sold homes(within past 6 months) within a mile of your desired location, see what’s sold, and compare your property with those. That should give you a more accurate idea

[Oleg C.]

Both Zestimate and County Assessor value are not accurate. But what is better out of these 2?