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4 APR

5 Reasons Why Zillow Is For Idiots

By Jeff Lichtenstein

Oftentimes the buyer feels justified in their purchase because Zillow says it’s worth it. And I have a bridge to sell you, too. Yet people so want instant gratification that they have hooked themselves on Zestimates like an 8AM line at Starbucks.

Here are 5 reasons why Zillow must be taken with a (very small) grain of salt:

  1. Zillow doesn’t know if a home or a comparable is upgraded. How can a computer module know if a home has marble floors or granite counters?  An appraiser physically goes to the home to see it. Zillow can’t. The answer is it can’t and this can throw a home 10% +/- in valuation in my opinion.
  2. Zillow doesn’t know the exposure on a home.  Oftentimes a home is more or less valuable because of exposure or if the builder built the home properly to take advantage of the light. Zillow can’t figure that out.
  3. Zillow can’t feel what is going on at the street level of the marketplace. Even an appraiser only knows what happens in the past. Zillow is off in values in this way.
  4. Zillow does not know the inside scoop on a deal. Did you know that an appraiser MUST call the listing agent and find out if the transaction was an arm’s-length transaction? They also ask if furniture is included and if the commissions and documentary stamps were reversed to lower the price for tax purposes. A Realtor or appraiser gathers this information. Zillow can’t. This can be another 7-15% bogey in value.
  5. Zillow doesn’t have access to all of the MLS listings. Zillow is a portal. It does not get listings from MLS. There are many active listings that do not show up on Zillow, making it much less reliable than a local Realtor’s website statistics.

Posted in real estate on April 4, 2014 at 6:39 am.

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