What is
Zillow.com and is it any good?
Wikipedia defines
Zillow.com in the following way:
"
Zillow.com is an online real estate service company which launched its beta service on February 8, 2006. It was founded by Rich Barton and Lloyd Frink, a pair of former Microsoft executives and the founders of the Expedia travel company. While Zillow was created to help people get home value estimates, the site has received repeated criticism from real estate agents who believe that the values given on some homes are overvalued or undervalued and not a true reflection of the value of the home."
One thing worth noting - and what most people seem to miss is that Zillow says this about its Zestimate tool: "A Zestimate home valuation is Zillow's estimated market value. It is not an appraisal. Use it as a
starting point to determine a home's value."
Is it true that
Zillow.com's Zestimate tool does not give and accurate reflection of what must be taken into consideration in buying or selling a home?
The Tucker Group decided to investigate and our answer is yes and no. Or rather, it depends.
Here is what we found:
First we looked at a few of our listings. The first, a 4 bedroom house with pond views in Brewster, MA has a Zestimate of $753,000. When we ran a Comparative Market Analysis for the sellers of this house, we took into consideration the neighborhood in Brewster, the proximity to water, the overall condition of the house, etc. We came up with a suggested price range that was lower than that. In order to facilitate the fast sale the sellers wanted, we suggested a list price of $695,000. It went under agreement in a week because all of the buyers and their agents, using the same data we did, saw it as a good value.
http://www.210griffithspondroad.com/ Zillow only looks at historical value trends for all of Brewster regardless of area or neighborhood quality or whether or not the home is a waterfront property. The more "solds" in the area, the more accurate the Zestimate. On the Cape, where it can be hard to find exact comparables, this doesn't work as well.
Our second listing we looked at is in East Orleans and is a salt-waterfront property. This 5 bedroom home has a Zestimate of $2,169,000. It is currently listed for sale at $1,795,000. In this case, the comparables used by Zillow have completely different salt-waterfront amenities - some are more expansive and some are less. Zillow just looks at the whole range from $1,496,000 to $2,299,670. Every address has a set of unique comps. Due to the vast differences in waterfront locations in Orleans, this method can be very inaccurate.
http://www.14littlecovelane.com Zillow does make some adjustments for size and number of bedrooms:
"...Then adjustments need to be made for any differences between homes. At Zillow, we make these adjustments behind the scenes when we calculate the Zestimate for a home. For example, there might be a comp nearby just like yours, but it has one more bedroom and so that house would probably be valued higher. We adjust for this in coming up with your valuation. Ditto for the square footage, etc. In other words, we do the work so you don't have to."
Again, where distance to the water is so important here on the Cape, Zillow sometimes misses the mark.
For our last set of observations, we turn to another part of the country. I own a townhouse in a complex that is near several other condo complexes in the same town in Colorado. The Zestimate of $150,000 is almost exactly what an agent in the area recently told me the condo might be worth. Why is the price so close? The answer is that there is so much data from comparable sales, Zillow has a very accurate cross-section of properties like mine. Just like a Realtor would do, the software looks at active listings, solds and tax assessments and then takes into consideration differences in square feet and amenities like a garage. In an area where each complex has similar mountain views, most properties have a similar location value and the Zestimate is more accurate.
In conclusion, we found that
zillow.com can be an interesting tool to find a starting point for properties that have a lot of good comparables. For areas like Cape Cod, however, we feel that more work and adjustment needs to be done after you get your Zestimate.
--
Lee Wareham - REALTOR®, TRC, e-PRO
The Tucker Group
Kinlin Grover GMAC Real Estate
193 Cranberry Highway - Route 6A
Orleans, MA 02653
800-275-9210 x141, 774-313-6091 Mobile
508-255-1489 Fax
mailto:
lwareham@kinlingrover.comhttp://LeeWareham.comhttp://www.CapeTuckerGroup.com - The Tucker Group Cape Cod Real Estate Team Website
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