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Zillow CEO sold his home for 60 percent of the Zestimate
There is nothing wrong with Zestimates, unless you want to know what your home is worth.
From Jonathan Miller’s Housing Notes
Note: Scroll down the linked page to read this section
The day after the home sold for $1,050,000, the Zestimate showed a value of $1,750,405. This indicates that their CEO took a 40% haircut on the value of his home which was exposed to the market for a reasonable time and sold for 19% below its list price. But of course he didn’t dump the property. It couldn’t have been worth anything close to the Zestimate since the property was exposed to the market for a reasonable period of time and sold well below the list price which was well below the Zestimate.
The people at Zillow are smart and built a strong ground breaking brand, but that doesn’t always mean they are making the right decisions. Little did I know, when I met one of the founders at a party the day before they launched a decade ago, how much disruption they would cause. I innocently asked the question, “So, what do you do?” And in the response I heard things like “Expedia” and “Rhymes with Pillow.” Their intro to the public began with the “Zestimate” which unleashed a property narcissism within us as we have checked the value of our homes and compared those values to the houses of friends, colleagues, neighbors, celebrities, etc. That search tool was later de-emphasized as they focused on listings and building a nationwide property database.
Read this Most Interesting article, including Miller’s “insider” comments at:
Also, read this article from Inman about Zillow:
Citing the chasm between the sales price of Rascoff’s former home and the property’s Zestimate may be one way for real estate professionals to show clients that Zestimates are, as Zillow says, only a conversation starter for pricing a home, not the final word on its value.
Philip Gray, a San Leandro, California-based appraiser, is taking this approach. Bringing up the Zestimate of the property Rascoff recently offloaded will help him deal with the frequent pushback he receives from homeowners “who think Zillow is the magic 8-ball,” he said.
My comments: One of my most popular blog postings, even today, is from a few years ago, is about Zillow. I regularly have people tell me what Zillow said their house was worth. Of course, I say that it is not very accurate, but it is hard for an appraiser to compete with a free “number”. Guess maybe I should write up something for consumers. Now I have something to say ;>
Of course Zillow and all the other statistical companies are wrong. Unless you live in a neighborhood where every home is similar in design,size,etc, then those web sites might be helpful. Most home owner I talked to regarding what Zillow said, seem to know that it is inaccurate, except when they need a high number to refi. I personally live in a small ranch and many of the sales that Zillow considered and the bank for a line of credit were almost double in size or new construction, good for me, but the 6 sales they utilized, not one was a ranch. If I did a report like this I would be out of business
Everybody thinks they are an appraiser. Including Statistical Companies…..
If it were that easy then why are there REAL Appraisers?
Appraising falls more in line with Behavioral Psychology and Social Psychology.
In other words, Why People buy what they do.
The person that bought our vacation property a few years ago bought it because it had the same address as his childhood home.
Another client of mine bought a newer home because of the Expensive bathroom mirror.
I myself bought a home on a lake in the month of July with a run down house because of the large lake front site, the beautiful day, and the peacefulness. I was really mad at myself when winter came and the furnace failed and the corner of the roof leaked. Although the inspection did reveal that when I was purchasing it.
a PERFACT EXAMPLE OF HOW THE PUBLIC IS MISLEAD AND APPRAISER’S SHOULD NEVER BE REPLACED BY A COMPUTER.
consumers are the main problem
Yeah, get rid of consumers and your life will be much better.