My New Outside Blog: Biggest Pricing Challenge ... Zillow

Biggest Pricing Challenge ... Zillow

 

 Zillow

 

It's easy, it's popular, click here and bingo your home value is Zillow Magic Price appears.  As a listing agent I find that is one of my major challenges .. offers submitted where the agent & the buyer have gone to Zillow, the crystal ball with all the answers. 

Don't get me wrong, I think Zillow offers a great opportunity for agents to obtain business and has done an exceptional job of forging a presence on the Internet with a huge following.  Kudos for excellent marketing!  It is a presence I have just not felt drawn to because I know that there is much more to pricing a home then click and bubble reading. 

Zillow is like the property tax entities that employ the price per foot valuation to determine property values.  It works just fine assuming the home being valued is Average and all the homes in the neighborhood are similar in quality, age, etc.  I'm not a fan of the price per foot or the magic CMA computer generated form from MLS either.  You see, I know that each home has a story to tell .. it has special features, it's own personality.  A home can have good traits or bad traits, all which will have a buyer reaction.  All which require consideration in pricing.

As a listing agent, the "Zillow speak" will happen as an offer is being presented by the buyer's agent.  The agent will say .. we searched Zillow and just do not understand why your home is priced the way it is .. it is much higher than Zillow reflects.  This does give me an opportunity to do my job and assist the other professional and buyer in understanding how Zillow is an average and why the home in question is priced for amenities, etc. that Zillow did not account for .. the home is not AVERAGE.  I also produce a meaningful grid analysis on the home and gently steer them away from the AVERAGE thought into the value of the home.

A reminder to all real estate professionals .. don't rely on a click of a button to do your job of preparing a proper valuation for your clients.  Also be prepared to direct your clients off this crutch into proper thinking on how a home is valued.  Zillow does have a nice place in our industry, we just need to make sure that it does not become a tool that is misused or misunderstood to it's merits or limitations.

 

Comment balloon 11 commentsConnie Goodrich • February 03 2011 06:48PM

Comments

Connie - This is the first I have heard of agents using Zillow to price a property. That's completely insane!!! I agree Zillow has its place, but pricing a specific property for sale is not one of them!
Garrigus Real Estate

Posted by Todd & Devona Garrigus, Broker / REALTORS® (Garrigus Real Estate) over 8 years ago

Connie,

I have never heard another agent say they used Zillow to price a property and I hope I never will!  That's just down right scary to me.  Thanks for sharing!!  :)

Posted by Monica Foster, Broker, CRS, ABR, SRS, CHMS, CNE, CNHS (Monica Foster Team of eXp Realty) over 8 years ago

I have had so many conversations with buyers and sellers who use Zillow -- and think that the Zestimates are accurate!  I carry around the fine print from the Zillow web site that tells the real story.

Posted by Richard Strahm, Lansdale and North Penn Real Estate (American Foursquare Realty) over 8 years ago

Unfortunately .. I have come across buyers who often use this as their reason for an offer and sometimes just hang firm on that belief.  Zillow can be at time accurate but we all know that it is off more than on.  I have to go through a discussion on how to individualize a valuation of a home to help them see the difference.  And yes, I have had agents (generally new to the industry) that have relied on it as well.  It is scary but one that being prepared to overcome come in good use.

Richard - sounds like you are on top of this and do a great professional job for your clients! 

Thanks to all for visiting!

 

Posted by Connie Goodrich, CRS ABR (McKinney Realtor)Texas (Keller Williams Realty) over 8 years ago

It is this kind of thing that will ensure that a realtor's knowledge will always be essential to the sales process.

Posted by Li Read, Caring expertise...knowledge for you! (Sea to Sky Premier Properties (Salt Spring)) over 8 years ago

Always a great tool for the offer they're considering on a purchase not so great for the one they'll receive on their home.

Posted by Kevin J. May, Serving the Treasure & Paradise Coasts of Florida (Florida Supreme Realty) over 8 years ago

Hi Connie:

I keep reminding people that Zillow is an automated system, and not a person looking at the properties for condition, amenities, etc.

It should only be used as a guideline, not gospel!!!

Posted by Toula Rosebrock, Broker/Sales Associate, Realtor, Lacey Township, (Diane Turton, Realtors, Forked River, NJ) over 8 years ago

Zillow is Zilly!  Not too prevalent in our area, but starting to be questioned about it more and more.

Posted by 'The Diamond Group' 'A Cut Above The Rest', Lubbock Texas Real Estate (The Diamond Group @ Keller Williams) over 8 years ago

You should send this blog to Brad Andersohn, he was with Active Rain (still an active member and Ambassador), now with Zillow as an outreach manager... I think if enough people continued to express this, it may change things.

Posted by Karen Otto, Plano Home Staging, Dallas Home Staging, www.homes (Home Star Staging) over 8 years ago

From what I've heard people say in my area, Zillow tends to be high quite often.  This would not be good for a buyer or seller.  The buyer would be trying to buy at an inflated price, which would make the seller happy, until the "real" value hopefully came back from the appraisal. Of course, at that point it would not be viewed as Zillows fault. Oh no. All the more reason for the listing agent to really be a pricing expert & be able to clearly support that value or price to all interested.

Posted by Craig Chapman, The Value Guy (Call Realty / Access Appraisals) over 8 years ago

Hello Connie ~ 

I have written a couple of blogs on AVMs like zillow in the past that mention a couple of reasons why AVMs like Zillow are fun as long as you don't take them as true appraisals of your home.

Blog on AVMs

Blog on Zillow

Zillow does a pretty decent job of telling users that the Zestimates are not true estimates, but too often, people see what they want to see.

Posted by Sara Goodwin, Portland, Oregon Appraiser (Ashcroft & Associates) over 8 years ago

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