Beware of the Zestimate

It was late last night when I first went to Zillow.com.  That was part of my problem.  As a REALTOR® I thought it might be a good idea to add my profile to the popular website.  Kind of "if you can't beat 'em, join 'em" mentality.  OK, I did it to see if I got a backlink.  No, really, such a popular site might actually bring some traffic.

As I entered my profile I saw the "add a listing" feature.  I decided to try it with one listing I have where my sellers have a contingent contract on another property and need to sell.  I'm trying to do whatever I can to market their place.

It was easy enough to enter and I pressed the Publish link.  To my horror I saw the list price of $349,900 followed by the zestimate of $262,733! 

Today, I tried removing the listing.  There was no option to do so.  I deleted all the data and photos I had entered.  I was able to withdraw the listing and it seems that it cannot be found by a buyer search, even though it still exists on the site.

I did some further investigating.  Believe me, trying to search for information on Zillow gives so many links and blog posts in communities like Active Rain and on the search engines that it's difficult to sort through.  I did find a blog post on the Internet somewhere that was helpful.

The writer pointed out that you can adjust price by using "Seller's Estimate."  This requires the seller to claim the property and then start entering upgrades with prices and also allows you to choose comparables listed on the site. 

It took a learning curve for us to figure out the upgrade feature and we were finally able to choose other listings that were in the same subdivision.  See, that was part of the low zestimate - they were using properties in a completely different subdivision that was truly comparing apples to oranges.  There were already 4-5 listings in the same subdivision so why they had to go out of it doesn't make sense, especially when the prices were so much lower.

But even with adding the comparable listings, the "estimate" still was too low.  We ended up going back to the upgrades and pushed the price up but we shouldn't have had to do this if the zestimate had used only those listings in the proper subdivision to begin with. 

Here's the example:  My listing is $349,900.  Other listings in the subdivision ranged from $334,000 - $452,200.  Yet the zestimate stayed at the original $260+ price while showing the "Owner's Estimate" at $344+.  To make matters worse, the Value Range still showed from $228+ to $317+  That range is still under what the lowest priced unit sold for in that subdivision according to Zillow. ????????

Once you hit the Publish button, you're stuck with the zestimate for that property, no matter what you do later.  So if I left that property to show as a For Sale listing, it would be priced at $349,900 with the above mentioned zestimate and value range.  Now isn't that just great for buyers to see?

Someone else said she always shows buyers an article stating how bad Zillow's zestimates can be.  But the truth is, people want to believe what they see.  I would bet you most buyers want to believe that if Zillow says it's only worth $262,000 then it must be overpriced - by quite a lot! 

While posting and questioning about this I was given a link to a Zillow complaint filed last year by the National Community Reinvestment Coalition, a non-profit organization in Washington, D.C.  They filed a complaint against Zillow to the FTC.  I've done a bit of research but cannot find out what happened with the complaint.

My suggestion is do not give Zillow your listings.  If you feel the need to add one, do not hit the Publish link until you see what the zestimate is.  I'm not sure but I'm thinking you can up the zestimate by using the "estimate" features, although I'm not 100% sure.  I'm not going to waste any more time trying to experiment.  This is just a warning for anyone else thinking of adding a property to this portal.  Wish I had done more research before I added my listing.