Thanks to appraiser Tom Horn for this Most Interesting video!
Have you ever wondered how accurate the Zillow “Zestimate” really is? Whenever I am doing appraisals I have homeowners tell me what their Zillow “Zestimate” is. I am sure they are hoping that my appraisal is similar to that number (if it is high), however the two could be close, but more times that not they are pretty far apart.
I actually just found out recently how you can determine the accuracy of Zillow in your area. Take a look at the video to learn how.[youtube=http://www.youtube.com/watch?v=1pT9HPqsu-I&feature=player_embedded]
click here to see the original blog posting
Zillow is so far off, the don’t know the difference between modular and condo or log and frame etc. anyone can grind up data, my market does not have enough #1 and no two homes alike so how does Zillow do it, marketing to get the public to think they are accurate.
Consumers want the fast and easy method to value real estate; however real property by nature is heterogeneous. The broad forces of value are constantly in flux. Depreciation and improvements which enhance or detract from a subject properties effective age and thus its value cannot be analyzed with an algorithm such as a Zestimate. In effect, appraisers are needed to accurately appraise properties, like it or not.
Zillow gets locations wrong. Zillow is based on Sq ft not condition. Zillow does almost nothing to address comments. It does not remove poor content when requested. I am interested in a class action law suit to make them go away. Anyone else?
Ray, I would be happy to join in a class action suit. They also put old listing prices on as well. I own two homes both with a one start rating. Zillow is way under the value on one and way over on another. Additionally these are in two states. One other item, when potential buyers are looking at these they don’t check the accuracy, they only go by the price posted on Zillow. They should be brought down.
Amazing! I corrected Zillow data. Square footage is TWICE their numbers and there is more bedrooms and baths. SO, they DECREASED the value in under 12 hours! There is a scam somewhere. If I ever pay them an advertising fee, please shoot me.
My watch is broken but it is accurate twice a day!
I still haven’t changed one of my clocks to daylight savings time to remind me of the hour that I still miss!!
Again, why are we even discussing accuracy and appraisal in the same sentence? But, how can anyone possibly measure accuracy in appraising anyway? Appraisal has nothing to do with accuracy except for the facts that are employed in analysis. But I guess if appraisers start believing accuracy has currency then pretty soon our regulators will require us to be accurate as well.
The reason that Zillow will not be regulated is the same as the reason that brokers and bankers can perform valuations without regulation. The larger universe of valuations of which appraising is the focus of USPAP is specifically exempt from oversight. Zillow is in the larger universe and Zestimates are therefore exempt from even making any sense at all. Only someone that can follow that logic will understand that Zillow and the larger universe of valuations can be and are as inaccurate as the circumstances may require.
While writing your congressman please include a comment that appraisers remain exempt from this crazy aspiration of accuracy.
When 17% of over 100 million Zestimates are more than 25% inaccurate then it raises serious questions about the validity of Zestimates and Zillows refusal to correct or delete obviously incorrect valuations when requested to do so by homeowners. What have they to gain from publishing incorrect millions Zestimates? The time has come for our elected representatives to introduce some form of Regulation on Zillow to protect homeowners from the misery and financial damage that is caused by these erroneous Zestimates.
zillow is inaccurate at best…only fools trust it.
There are buyers out there who believe it as well as some property owners who do as well. I do not know what a Zestimate is, but if it is an opinion of value then it cannot be accurate or inaccurate. It is an opinion and may well reasoned, credible or reliable, but no accurate or inaccurate.
ZILLOW ( WAS ) A GOOD PLACE TO LOOK AND SEE YOUR HOME AND COMPS… NOW IT’S A COMMERCIALIZED JOKE….
My house is now roughly worth what I paid for it in 1987. It was a slow ride up to over 2 1/2 times what I paid for it, but a quick crash down. My local tax aosssser does not agree with my estimated property value or my appraisal from a state licensed appraiser (I went to graduate school with the city aosssser :-). I look forward to seeing if I win my property tax appeal May 2.BTW: My Zillow estimate was within 5% of my professional appraisal and personal comparable search of five properties like mine sold in the last six months.
Zillow lowered the price of my home in the last week (June 2013) 33K. Home prices are supposed to be going up, no?
Changing Zillow Zestimates are fairly easy if you follow the steps.
There’s my answer. Buyers who consider Zwillow to be the only truth asking Zwillow to verify listing prices. That is only a step away from Zwillow sanctioning appraisals.
I am aware of AMCs and GSEs that require appraisers to compare their results to Zwillow and explain why there is a difference. How can anyone do that?
Does any one know how Zwillow gets from A to Z without going through the rest of the alphabet? It’s a secret, correct?
Dear Zillow please give appraisals for the Harmony area in Saint Cloud , plan to buy a home in near future but do not know if prices asked are truthful.
Maybe it is important for a Zwillow to be “accurate.” But what does accuracy have to do with an appraisal opinion except perhaps with regard to the facts which support it?
the Zestimates are COMPLETELY INACCURATE (on both sides) but mostly too low.
Ia picture in the internet and setting a price they feel is right. even the tax collector had it appraised higher than zillow,s market price. i will see my lawyer about it. I think zillow appraisal are not truthful, many houses smaller than mine in same subdivision have sold for twice the amount zillow appraised mine. I dislike zillow putting
Interesting, somebody asked a similar question on Quora – I answered it over here and there also some other interesting answers: http://www.quora.com/Real-Estate/How-reliable-are-Zillows-real-estate-value-estimates
Zillow is close for only the most homogenized suburban track housing, sometimes.
So accuracy means the property sold for what Zillow said its “zestimate” was?
Thanks Mr. Burrup, that is exactly the kind information I hoped to see posted and it mirrors my experience in the Southern Colorado markets where I work. None of the markets here generate the volume of easily accessed data that you describe, and so I was hesitant to offer my opinion about Zillow since it can easily be rejected based on difficult data access alone.
As for Zillow being a starting place. Why start in the wrong place?
I am aware that clients request that Zillow be used for market analysis and I can imagine similar requests for value conclusions and comps. Zillow has unfortunately intjected itself into the appraisal world and is claiming accuracy that doesn’t exist. But is it legimate.
Apparaisals, unlike Zillow, are not measured by alleged accuracy. The standard an appraisal result must adhere to is credibility. Credibility comes about with honest, hard research
Pay attention to what Mr. Burrup says and be prepared to deal with clients who are being convinced to use yet another source of cheap misinformation. Appraising, especially for residential mortgages in the secondary market, are on the defensive from the time they are accepted as an assignment. Unfortunately, protecting the public and defending against the threat that Zillow represents is hampered by the confidentitality rule, nonetheless defend we must.
Zillow can not afford to comply with Standards Rule 1-4 and collect, verify and analyze all of the information necessary for a credible result. Unfortunately residential appraisers are currently being required to accept cheap fees for quick appraisals and that throws them into almost direct competition with Zillow, which I guess is free. If appraisers compete with Zillow, eventually they will have no income. It beats me why regulators don’t require sources like Zillow to predominately and repeatedly display warnings that the data used to support their conclusions is unveriifed and analyzed by some kind of undisclosed statistical model.
Don’t be fooled into claiming your appraisals are completed under the standard of accuracy except for the accuracy of the relevant data you verify and incorporate into the analysis necessary to complete the appraisal with credibility. Claiming “accuracy” sort of resonates in our work, but it is misleading at its worst and at at a minimum has no meaning.
Zillow is apparently offering the same corruption we encounter daily now dressed up in a brand new fancy jacket. What’s the idea? What are they selling? How do they sustain this? Is the intention to take over the residential appraisal work?
About 5 years ago had been getting lots of questions from lenders, borrowers/owners, etc about Zillow and their Zestimates so I did a quick analysis. I pulled 10 recent appraisals that I had performed and looked at the Zestimates for those 10 appraisals. I’m in the Denver, CO market which per the Zestimate Accuracy they give themselves 4 stars (apparently their highest ranking). In this area we have very good MLS and also very good Assessor records online so if their approach would work it seems that it should definitely work here.
However, the results were disastrous! Of the 10 properties, only 2 were within about a 10% variance of my appraised value. The other 8 Zestimates were wildly and inconsistently off. When I looked at their “comps” used with those 8 properties if an appraiser were to use their comps and method and value conclusions that appraiser would lose their license and likely end up in jail for mortgage fraud. The most surprising thing to me was how inconsistent they were.
I strongly suggest if you as an appraiser are being asked about Zestimates, or Trulia value or any other site that you perform your own local comparison to some of your recent appraisals to see for yourself how good or bad these sites are in your area. Here in Denver, where they feel they are most accurate, they were running at 20% or 80% go-to-jail accuracy based upon my analysis.
Jay T. from Zillow here. Thanks for posting Tom’s Video Ann (and thanks Tom for making it). Zillow aims to be completely transparent about Zestimate accuracy, which is why we publish the accuracy table Tom highlights. The Zestimate is a starting point, it isn’t intended to replace a real estate sales or professional appraiser’s opinion of value.
Can somone please tell me why Zillow, let alone the accuracy of Zillow as measured by subsequent sales is even relevant to appraising?
Thank you Tom Horne for the video. I knew Zillow was inaccurate but now I know why. And in our part of the world (Texas) we don’t even have recorded sales at the county level to help Zillow along.
In my humble opinion, Zillow values are based primarily on the GLA as the primary variable with little or no consideration of the design, quality of construction or condition of the property. Therefore, a 2,000 sf stone colonial in excellent condition will probably have a similar Zestimate as a 2,000 sf frame bi-level that may be a shell. Who can relied on that senario for a credible valuation?
Thanks for sharing my video and post Ann! I hope your readers find it useful. I wonder how many others did not know that you can look up the accuracy of Zillow in your area? I just found this out myself last week during a technology workshop with Stephen Pacinelli of “Tech Savvy Agent”.
Thanks for sharing my video Ann! I hope others are able to benefit from it. I wonder how many other people did not know that you could find out how accurate Zillow is in their area. As I stated in my post, I just found this out last week during a technology workshop put on by Stephen Pacinelli.
I guess the point must be that Zillow is being used by brokers to set listing prices and guide buyers in making making offers. Or is the point that appraisals are now predicitng sales prices? Corruption! All due respect, but isn’t knowing how accurate Zillow is a little like knowing how many angels dance on the head of a pin. It is trivial.
I have heard many appraisers who serve as expert witnesses say they struggle mightily to overcome the idea that opinions can be described as “accurate.” Data is accurate, but opinions are reasonable and cedilbe. But then Zillow isn’t an opinion is it?
The real question about Zillow is how they come up with their zestimate. If they won’t tell how the black box works then what they say about accuracy is really meaningless.
And why isn’t a 5% – 10% variance OK?