When you are thinking about selling your home, looking at the information on Zillow, like their Zestimate is a popular thing to do. Here’s why you can not trust their value information.
1. Zillow Is Not Looking at Your Home’s Condition and Features
Here is an example:
1866 Orizaba Ave. The Zillow “Zestimate” was $570,000. Other AGENTS told the seller the home was worth $570,000. But seeing the updates and location in the community we knew the property had greater value and knew it would sell for more.
We listed the home at $625,000. Right after we did that the Zillow Zestimate went to $610,000. We sold this home the first weekend for $640,000. If the Seller Believed the other three agents and the Zillow Zestimate it could have cost them $70,000!
Zillow posts a “Zestimate.” Zillow does not know your home’s conditions, improvements or about the location.
2. Zillow Has Little Knowledge of Your Location or a Lot of Qualities
Mountain views, cul de-sacs, golf courses, walking distance to schools can add value. Location is 70% of the buyer’s purchase decision.
3. Zillow’s Data Is Often Inaccurate
50% of Zillow’s revenue comes from real estate agents buying leads from Zillow. They don’t even tell buyers a home is under contract. They just want buyers to call so they can sell leads to real estate agents like us. When they give comparable sales. Zillow does not always compare apples to apples in selecting which homes might be a good comparable to indicate a home’s value.
4. Zillow Cannot Keep Up with the Market
As the market shifts, Zillow’s Zestimate cannot keep of with rapid market changes like a rise in interest rates or seasonal changes. Their values could be over or under stated by thousands.
5. Zillow Is Buying and Selling Listings for a Profit
Zillow have positioned themselves as the “Gold Standard” for real estate values online, similar to a Kelley Blue Book for Real Estate.
Yet, their are offering to buy homes and then they add a few minor updates and sell the homes for a profit – this is called ‘flipping.” So they tell the world your house is worth X or Z. Zillow then makes offers to desperate sellers who must sell now. The benefit to that home seller is they get a quick cash sale.
Zillow does not charge a commission. But they do make offers on homes well below market value and they charge a 7% or more “service fee”. Its not a fair fight for a home owner who needs to sell their home. And, effectively, those home sellers are selling their homes to Wall Street investors.
Selling your home to Zillow might work for home sellers who need a quick cash sale. But even our local investors will often pay more than Zillow for homes. The real numbers are that Zillow is only making offers on 2.4% of the home owners that present their home to Zillow for sale. Once Zillow obtains the contact information of motivated home sellers, they sell the leads to real estate agents for 35% of the commission.
And Zillow has in their corporate mission statement to put real estate agents out of business! In Zillow’s world the consumers do not need real estate agents. They believe all can be done online with their very powerful website.
Time and time again we find cases where home sellers gave up tens of thousands of dollars of equity just for the Easy Button of a quick sale. A majority of real estate agents have the objective of getting home sellers the most amount of money when their home sells, not the least.
At the end of the day, because the real estate industry has home seller’s best interests at heart, the Real Estate Agents industry will be intact for years to come.