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18 Comments
- dt40, on 10/12/2007, -1/+7I don't know anything about Zillow's accuracy, but I am sure rooting for them and others like RedFin who are working to make real estate transactions easier and less costly for consumers. I find it absurd that real estate agents make so much money when most of their time is spent acquiring new customers, not actually delivering value to customers.
$60,000 to sell a $1MM home? Crazy. - psylence, on 10/12/2007, -1/+4Your wife sounds like a sharp one.
- jcs_goog, on 10/12/2007, -1/+4Yes, the have such a huge error range. They'll say a house is worth $150,000 to $250,000. Duh!
- roaddemon, on 10/12/2007, -1/+3dt40 - Yeah, the compensation structure for real estate agents is way out of whack. Maybe it made sense 20 years ago when there was no other way for buyers to find homes, but the internet changes that big time. I just bought a house in Boston using an online brokerage. Basically you use their website to find homes, go to open houses, try to get the sellers' agents to show you some homes, and when you find the home you like, you contact the online brokerage and they take over like a traditional agent. They do valuations, submit offers, negotiate with the seller etc. The bonus is, they give you a rebate for 75% of their commission. So, on a $500,000 house with a six percent commission, they get $15,000 (half the commission goes to the seller) of which you get $11,250.
It worked out well for us, but it's amazing how threatened traditional realtors feel by them. We had some realtors refuse to deal with us, some yell and scream and throw temper tantrums. The house we finally got was a pain because the seller's agent was trying so hard NOT to sell us the house. These agents are dinosaurs who know they are going extinct, but instead of changing to face the times, they are fighting tooth and nail to prevent progress from happening. - mattmollysdad, on 10/12/2007, -0/+2We have checked Zillow for a while and found that they never close..they r always too high... seems like their figures r really just based on sq. ft. X most recent sold sq. ft. in area... so any major improvements, any ocean view, school zones r left out... they r like all realtors just looking to get ur business... or viewing
- rklusas, on 10/12/2007, -0/+2Its a great concept, just a tough service to provide without the assistance of industry professionals. Real estate moves a lot slower than other industries, but you still cant provide accurate valuations using public data which typically lags the market by 3-6 months. Zillow's problem is, regardless of what they say now, they came out swingin against professional realtors, and its usually not a good idea to pick a fight with 1.6 million people (the # of realtors in this country). They cant prosper in the long run unless they either become the national mls system, or cozy up to the industry so they'll share their data.
On a separate note, the fees are ridiculous. Like @dt40 said, 60k for 1MM is crazy. Whats even worse is that it takes about the same effort to sell a 100k home as it does a 1mm home, yet the fee is 10x more.
I'm not hoping all agents go away, just the ones who suck at their job. I want them to spend less time pushing paper around so they can charge me less and provide a better service. - fatdog789, on 10/12/2007, -0/+1Zillow is about as accurate as drunk man aiming for a dartboard behind him.
They were off on every single sale (based on their estimate of value before the sale) of every house in my neighborhood by over $200,000.
They're like the Google of house valuations. - Junkyarddawg, on 10/12/2007, -0/+1The article misses the point.
The issue isn't that Zillow is sometimes off - of course it will be! - but whether it is as accurate or perhaps even more accurate than the alternatives. - brundlefly76, on 10/12/2007, -0/+1The value of Zillow isnt in the accuracy of its Zestimates - everyone has always taken them with a grain of salt and they are clearly explained on the site.
It is still the best site in the internet for doing price research - tons of RE people even use it. - dt40, on 10/12/2007, -0/+1@roaddemon:
Yep, the compensation system is WAY out of whack.
If I were selling, say, a $1MM house, I think the following woul dbe a very fair comp system:
- $100 per hour that the agent spends working on selling the house.
- To incentivize them to get a higher price, a 10% commission on anything that they get above some limit, like say $990K.
Say they spend 100 hours working to sell the house--and that seems rather high. Say they sell the house for $1.05MM. They'd make 100*100 + (1,050,000-990,000)*0.25 == $10,000 + $6,000 == $16K. That seems like quite fair comp for 100 hours of work that doesn't involve extreme skill.
Currently, the selling agent would make $30K on this deal (half of thr 6% commission) and they have little incentive to sell for more than $1MM.
It is a corrupt comp system ripe for disintermediatoin. The strongest proof of this assertion: real estate agents spend 90+% of their time on marketing themselves instead of adding customer value. How about spending a lot more of this time working for customers, and putting in place a comp system that encourages this? - inactive, on 10/12/2007, -0/+1Zillow is a joke, if your buying or selling real estate get a good Realtor, they will save you more money in the long run than any cheap skate do it yourself web service!
- rochlin, on 10/12/2007, -0/+0Zillow is a tool and an excellent one. It uses an algorithm based on data for recent sales, proximity and some features of the property (like square footage, bedrooms...).
You can see the recent sales data zillow is using to produce its estimate. Sometimes there aren't many recent sales near the property you are interested in. Zillow isn't God. It can't predict without data. It's up to a conscientious user to look at the data used for the estimate. Zillow allows you to exclude properties you think aren't comparable or sales that were too long ago. If there are no comparable recent sales, even a professional appraiser would be lucky to get close to the actual sales price.
Anyone who isn't willing to look closely at the Zillow estimate probably isn't using it for any serious purpose. And "good realtors" who offer appraisals are "good" at selling you on a property. They're not disinterested appraisers. - thearchitect, on 10/12/2007, -1/+1Zillow is just reflecting the current volatility in housing prices. Rising volatility is a classic sign of a bubble imploding. Some people racing for the exits, while others are still paying inflated prices in hopes of getting rich.
- bill7693, on 10/12/2007, -0/+0For my neighborhood, they just have the assessed value that's used for property taxes. This is about 25-30% less than what houses have been selling for over the last year or two. And no, I'm not in one of the areas that had a big run-up with the housing bubble, so I don't think they're doing any kind of correction for slumping prices. Home prices have been flat here for the last year or so.
They also have the square footage wrong on my house. - MrMeela, on 10/12/2007, -0/+0Just get an agent!!!
If you were sick you'd get a doctor right?? If you were crazy, like its seems most of you are, you would get a psychiatrist right? Or even better, if you were dead, you'd want a mortician! Agree? Okay that was little dark, but you get the point. :)
Well great! Here is the deal, if you are moving get an Agent!!! Obviously I am an agent, but besides that point here's my advice. GET A GREAT AGENT! I totally agree some agents aren't worth a dime, maybe not even a nickel! But do your due diligence and find one that puts people before profits, and is passionate not only about the transaction and the commission, but more importantly about you! Any good agent knows that he needs you to be successful and sustainable in his business. A great agent genuinely feels this and it's evident. I strongly urge you all to continue along the lines of researching via the web to gather your own information and to form your own hypothesis when approaching a real estate transaction. But call a group of agents, interview them and then go with the best one. I love what i do and I will continue to positively affect the lives of all of my clients first and secondly grow my business and hence provide for my family.
If you are looking in Austin, zillow it and then reach out to MrMeela! - davidgibbons, on 10/12/2007, -1/+0Hi, it's David from Zillow,
It's likely that your county tax assessor has your sq. ft. wrong since that is where we get our raw data. You can publish the correct sq. ft. alongside the public record once you claim your house on Zillow. To correct the public record, contact your county assessor's office.
We only display tax assessed values in areas where we don't have enough sales transaction data to calculate Zestimates. You're right; that the tax assessed value is typically 10% to 25% below fair market value. We don't suggest the tax assessment is an accurate estimate but merely include it for the purpose of making a relative comparison from one house to the next. - jstohler, on 10/12/2007, -2/+1I've tested Zillo a lot and haven't seen it come close once.
- peacemover, on 10/12/2007, -3/+1My wife is on there all the time alternatively panicking and rejoicing about what our house (or our neighbors') is or is not worth this week... their valuations seem pretty arbitrary and often inaccurate.
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