You can't trust Zillow and its estimates, or Zestimates as the company likes to say. Redfin has a much better user interface with superior property value estimates. But it's also hard to trust Redfin's housing estimates too.
Redfin's algorithms are more sophisticated. You also get updated on what a property ends up selling for on Redfin much faster. However, you can't fully trust Redfin's property pricing estimates either.
When Zillow launched its website in 2005, the world was a buzz with the company's ability to bring appraisals to everyone's fingertips. It was fun to type in your own home address, or that of your colleague's or boss's house to see what they paid.
Some of the estimates were way off and were course corrected by owner's ability to log on, claim one's home, and update the data will all relevant features under oath.
Zillow empowered buyers to become smarter shoppers by understanding comparables and knowing when and at what price the house was last sold. When you know the seller paid $1,000,000 at the top of the market for example, you know it would be ludicrous to pay more by definition.
Zillow brought once exclusive information, available only to real estate agents and people who paid for it to the masses. There was hope for an industry which generally is maligned for its two-faced ways, shady appraisal practices, and aggressive lending standards.
My biggest hope was that Zillow would make the markets more efficient for buyers and sellers. By cutting out a lot of unnecessary middlemen, maybe Zillow could lower selling commissions from 5-6% down to perhaps just 1-2% of selling price. Boy was I wrong. Zillow has done nothing for lower commissions and cannot be trusted.
Zillow Could Have Helped The Industry
The main reason why you can't trust Zillow and its estimates because the majority of its revenue comes from realtor advertising on its platform.
Zillow has created a heard of zombies who rely on their zestimates to tell them what value a particular property is. Here's a news flash for all of you: A property is only worth what someone is willing to pay for it.
As a seller, you can't go around sticking to a selling price because Zillow or your real estate agent said your house is worth $1,000,000. If nobody has bought it after 6 months, it's definitely worth less!
Buyers are no better when it comes to relying on Zestimates. A big problem with Zillow's database is that it is based off comparable sales. In the downturn, volume dried up, making real-time comparables hard to find. All the data is lagging.
Feel free to pull up estimates around the entire neighborhood to educate yourself, but if you have only one or two sales in the past 6 months to a year, they are hardly reliable.
Erratic Zillow Estimates
I've had Zillow increase the value of my house by 23% during the housing collapse. As we begin to recover, their estimate has gone down by about 7% from the peak.
One of my rental properties also skyrocketed by about 25% during the housing downturn to about 50% higher than when I purchased it 4 years earlier. Now the estimate is only about 17% when I've seen comps trade at 40% higher this year.
And one of my other properties can't even get a Zestimate, even though there are many units in that building and is located in one of the best places in Lake Tahoe.
The point is, anybody trying to buy my properties during the multi-year downturn would be scratching their heads at ever increasing prices. In fact, anybody trying to buy any property using Zillow during the downturn would be misled.
Now that prices are recovering with all the pent-up demand, all-time low mortgage rates, and internet money, my estimates are declining. Go figure. There is a serious lag and volatility in their estimates.
Zillow's best use is for trying to figure out what the seller paid and when. That's it. Their Zestimates and Rent Zestimates give only ball park figures. However, they are just one of many considerations one should take before setting a price.
There was one time when Zillow had my house $400,000 over the market price. It was absurd.
The Biggest Problem With Zillow: Not Lowering Selling Costs
The biggest problem I have with the real estate industry is not the shady appraisers, or the unscrupulous agents whose motto is, “It's always a good time to buy, or sell real estate.”
No. The biggest problem I have with the real estate industry is the absolutely ridiculous 5-6% selling fee the homeowner has to pay the real estate agent.
If it costs $10,000 to sell a $200,000 home, does it really cost $40,000 to sell an $800,0000 home based on a 5% selling commission?! One could argue that it might take more effort to sell the $200,000 home, because it is likely in a less desirable, or lower demand area.
Imagine if you owned a $2 million home, which is quite typical in places such as San Francisco and New York City. Are homeowners really expected to pay a whopping $100,000 to sell their home? This is utterly ludicrous and something that companies like Zillow and Trulia should have fixed. But they haven't. Why is this?
The reason is simple. Zillow is in cahoots with the real estate industry. They derive advertisement revenue from real estate companies and agents who want to use Zillow's platform to broadcast their services and homes for sale.
Zillow Revenue Composition
In 2023, over 70% of Zillow’s revenue still comes from fees agents pay for customer leads and apartment leads. 8% comes from fees banks pay for mortgage leads. While 18% comes from advertising based on their latest earnings results.
Zillow is also now in the business of trying to buy homes from owners at a discount and flipping them. In other words, Zillow is in direct competition with homebuyers and sellers, the very users on its platform!
As a result, Zillow hasn't joined the fight to lower selling costs for sellers, which ultimately creates higher prices for buyers. Zillow's advertising revenue from realtors is just too great.
One of the biggest reasons homes remain illiquid and turnover remains low is transaction costs. If it only cost $10 bucks to sell your home, you'd probably be more willing to sell. But if it costs $50,000, you'll think twice and might be stuck and lose money because of it.
If the industry can drop down to a fixed fee model, or a scaling percentage fee which declines as the price of your house goes up, that would go a long way into helping the industry get out of its funk. The barriers to selling is just too high.
My proposed selling fee structure is simply $2,000 for every $100,000 value range in a home up to a $1,000,000 value cap. Hence, a $500,000 house will cost $10,000 to sell (2%). A $1,000,000 house costs $20,000 to sell (2%). While a $4,000,000 house also costs $20,000 to sell (0.5%). Sounds like a great solution doesn't it? Bring it up to any real estate agent and they'll scoff.
A New Reason Why You Can't Trust Zillow's Estimates: Zillow Offers
With the launch of Zillow Offers, you can now sell your home to Zillow based on its Zestimates. Think about this from an incentive post of view. Zillow is incentivized to buy a home from you for as low a price as possible to make as much money as possible when it sells.
Therefore, Zillow is incentivized to keep it's estimates of your home's value artificially low. The same thing is opening with firms like Opendoor.
Do not sell your home to Zillow, Opendoor, or other companies that claim to make it easier to sell your home! With all their data and resources, they are likely ripping you off! You can't trust Zillow and its estimates.
It turns out, even Zillow can't trust its estimates as it lost over $500 million in its iBuying business and shut it down in 2022.
Instead, internally market your listing with a brokerage first, go on the MLS, or try and sell the property yourself.
Haggle To Lower Commission Fees
Haggle like crazy on the selling commission price. If you can get down to a 3% total selling commission, I think that's reasonable. At least get down to a 4% total selling commission in this internet day and age!
Even though you can't trust the Zillow and Redfin estimates entirely, you can use their bad estimates to your advantage when buying and selling. After all, if you can't beat them, join them!
For 2024, Zillow has new housing estimates which are way higher than the historical housing price appreciation rate. Once again, Zillow's housing forecasts are likely to be wrong.
Please only use Zillow to understand the direction of the market and past sales. Relying on Zillow's housing estimates might cost you a ton of money.
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You still can't trust Zillow and its estimates. After all these years, Zillow still hasn't done anything to lower commissions, like Redfin has.
Is this a ChatGPT story? How can you claim “For 2024, Zillow has new housing estimates which are way higher than the historical housing price appreciation rate.” Do you work for Zillow and have insider information? Do you realize we are only 3/4 way through 2023?
Sure, it’s called a forecast. Zillow was forecasting a whopping 6.5% YoY price growth from July 2023 to July 2024, which I think is wrong.
Forecasting is a normal part of any investor’s due diligence. Do you not make any forecasts yourself? I’m dumb founded too if not.
I’m s senior citizen and rented a very small house in Kerrville Texas 78028, for many years. I had my normal rental increases over the years. My rental home was so small I’d have to move my couch to let visitors in. My rent was
$ 950.00 per month. Never missed a payment. One day the landlord came over to sign a new lease. He explained that Zillow he had hired to audit his rentals and they had suggested my rent would now be
$ 1,600.00 a month. At that moment I was forced to give notice with nowhere to go.
He said Zillow had audited all his friends rentals as well. Because of this ride in rental costs, our community suffered a substantial loss of available affordable rentals in our little city. People here couldn’t make enough income now to afford the cost of living and started moving away.
I recently saw a Zillow report that claimed that other entities were responsible for housing costs becoming unreachable for people. But in actuality is was they and a handful of others companies like them that were at fault. Kerrville Texas is not LA, New York or other metropolitan cities, but we’re paying that same as they are. What can be done to hold these companies responsible for making our City a soon to be Ghost town? What law can be applied to this destructive price fixing?
First, any web article should have a visible date. Who wants to invest time reading about sensible real estate lobbies practices without knowing if the article was written last year or a decade ago.
To all the home owner above bitching about zillow “under estimating” their house price. That is certainly not their intend, they are in cahut with the REA which is really a antitrust lobby that should long have been dismantled by federal order. Don’t know when this article was written but the crooks at Zillow are now putting whatever the listing agent asking price as “Zestimate”. Just now i see several house with “Zestimate” being asking price plus one dollar. How more plain do you have to be to make it clear Zillow is driving the Real estate bubble and supporting the outrageous privilege of the REA ?
Phone carrier companies have abused consumers with 2 year exhorbitant phone contracts and fees for years, until now pre-paid, no contract have short cutted these thieves. The same should happen to the realtor association. There is ample possibility to aggressively underprice the service of a real estate agent by internet startups. The day will come. For now Zillow is responsible for the huge overprice of housing. The real cost of a house in USA is between 10-25% of what you see compared to building standards of other developed countries. The government also needs to eliminate abusive house building regulation to allow more competition for higher quality housing without a 10X price that we see today.
You 100% can’t, Both Zillow and Redfin are *for sure* practicing driving prices down artifically. We’re talking on one of my properties, off by 50K. Doesn’t matter what the government actually values, but Redfin year after year has driven prices down in the area to help their agents be more aggressive.
I’ve worked in finance for over 30 years and I’ve never seen such illegal behavior like this. It begs to ask the question, are they driving inventory low to buy up, just to then raise prices again? Sure makes sense when their “star” listings are sold by their folks.
zillow?–hustlers and hucksters–very american.
Agree! I purchased my condo from my brother for what he still had left on his mortgage, as he needed to get out from under it quickly. Zillow, rather than going off the ASSESSED property value by the tax assessor, went with what I paid my brother. I don’t plan on selling, but I wouldn’t even consider Zillow if I were.
I am frustrated that our zestimate just went down more than 40% so I Googled the problem and found this from one of my favorite bloggers! Our situation is different from the typical and I know I should not expect Zillow to have any amount of accuracy because our home comes with a 136 acre “yard.” Therefore it’s annoying to have Zillow tell me that I can improve accuracy by updating how many half baths we have. For us it’s hardly about the house. There is no zillow for that. It was probably closer to accurate value for a couple years after we bought because there were not many local sales but in the good economy and because of demand here south of Atlanta many nearby homes are on the market and new ones are being built at about one fifth the price we paid. These homes are coming with a 2 to 5 acre yards so the rural feel is being somewhat preserved. I’m just going to unsubscribe from zillow emails and enjoy our beautiful elbow room.
Yeah, they are annoying. Hopefully you can do some editing of your property and claimants profile online? How was your redfin estimate? I feel that redfin is consistently a little more accurate.
Agreed about Redfin. Their estimates are generally more on-point than Zillow’s, which is sort of surprising since estimating is the only thing Zillow does, supposedly. They should probably take a glance at the competition once in a while.
Zillow’s estimates also seem obviously skewed in my area based on assessed value from the county tax offices. I’ve appealed my assessed value twice while my neighbors have not. Our houses are basically the same and their zestimate is above mine by about 20%. If I’m a buyer, I prefer a lower tax bill, and in our area you are not reassessed when buying an existing home, so in my book that boosts my property value for sure.
That’s right! I just looked at House on an historic listing site 56,000, Zillow’s estimate 112,000?
As far as I’m concerned, as of the Lilac fire and fires around southern California, Zillo and Trulia are scamming customers. It is against the law to price gouge and with their algorithm, they space it out to everybody. I’m disgusted! Oh, let’s not forget they seem to be separating certain homes that fall under rental protections and then algo-rhythm the “premium market” separately, therefore making the market look more depleted than it actually is. Some of these scumbags need to sleep on the street one night and maybe then they might know what it’s like.
As I see it, Zillow, is not perfect and can’t be 100% accurate in all it provides to the viewers and visitors of its content. How-ever it is a great tool to have, information that in the past was keep for those in the industry and very difficult for those of us to get to make an intelligent decision when buying or selling. The real state industry is plagued by many dishonest individuals that can take advantage of those of us that don’t know all of it and have to trust them. We have to be vigilant as these transactions are huge and life long. There are many great people in the industry and I have bough four homes, refinance, and have a rental but can tell you, we have to be extremely careful and aggressive at times with this business and like other business as well. Zillow has given us an edge with information. Lets face it now a days information is power. Now we have a better bargaining knowledge and understanding of the information provided for those who want to enter the field. There is more of course that goes in a transaction of this type and we have to get familiar with it as well. I want to say thank you for those in the business who are ethical and do the best for their customers. There are many of those as well.
IMHO
I find the rental estimates very confusing for my rental. I have a rental in a grouping of homes which have essentially the same square footage and layout (with small variations) to my home. However, when I look up the rental estimates for my home it says it is $400/mo less than all other properties that match mine. The only thing different about my home from the others is I have a detached garage whereas the others don’t. Maybe this puts my property in a different comp pool but really…… how can a house with the same sq footage and same basic layout have a $400 difference than the estimate of my next door neighbor.
I am house hunting and didn’t realize that the estimated mortgages Zillow posts are based on 20% down conventional loans and do not take into consideration taxes and insurance etc. Very misleading.
Thank you for this article! I am a certified residential real estate appraiser in the Raleigh-Durham area of North Carolina.
I have a master’s degree and more than 10 years of experience in this field, and have completed thousands of home appraisals. I also have a broker’s license, though do not use it.
I do have to admit to laughing out loud at your quote from a real estate agent calling Zillow “the bane of their existence.”
Because … I cannot tell you how frequently incompetent and lazy real estate agents actually do rely on these Zestimates — instead of completing a competent Comparative Market Analysis — to innacurately price homes based on Zillow’s erroneous data.
Real estate agents like these are the bane of our existence. It is their job to temper seller expectations, yet many go along with it and require the appraiser to reveal that their contract price was off the market by half a mile. And then it is the appraiser who catches the wrath for professionally doing their job and providing the true market value.
In my experience, Zillow is sometimes off by more than 15-20% on a regular basis. I just completed an appraisal on a home on a 7.5 acre lot with a horse barn with comparables many miles away and yet Zillow attempted to put a price on this property.
Ludicrous. They can’t even get it right in large cookie-cutter suburban neighborhoods.
Zillow is doing a real disservice to the valuation profession.
Zillow has become such a thorn in this industry that I may start asking lenders if it is OK if just start providing them with Zappraisals.
Hi, I’m on this site reading and some of the comments are exactly what I have experienced. Zillow is a joke. They have been miss leading from day one. I was in the process of getting estimates for my home. I checked 4 different websites and meet with 5 different agents from 5 different companies. Everyone came within $1500 from each other. Zillow priced my home almost 3 times the value. My question is, why are they still able to be in business? Someone must be getting kick backs from this company for them to still be reporting miss leading information and nothing has been done about it. Can someone please tell me why they still able to report and what is it going to take to shut them down?
Zillow indeed sucks. It is humiliating to post your house with Zillow, Realtor, and Trulia.
One salesperson came to sell my house, and he wanted me to pay for all the closing costs for the buyer and help with the down payment too! Hahaha.
I showed the fat lard realtor the exit door out off my house.
Homes who are closer to hospitals should worth more $$. One home buyer told me.
Many friends of mine who retired and sold their homes and went to live out in the country to nicer locations, some did not make it to the hospital when they were ill.
A medical clinic in your neighborhood will not help you when it comes to a heart attack. They are not equipped with the equipment as the main hospital.
Starbuck is a little far from my house and McDonald’s is closer to my house.
To me, that means convenient to both locations. Everything is close to my house, and that is what I like about it. For the hospital, when it comes to saving my life, super “location” is not important. Indeed, as a senior citizen, don’t mind going to McDonald’s for a fish sandwich. Don’t move away from your loving homes, take over your neighborhood, with neighborhood associations, and rase your home prices to keep scums out! Don’t be chased away from your neighborhoods.
In September 2015 we were fixing our house up to sell by doing new landscaping etc. We looked at Zillow to get an idea of the recent home prices in our neighborhood. We talked to our realtor and he said that Zillow’s estimates were very low. He was right. The house sold for 300K more than Zillow’s estimate. It really helped the values of the rest of the homes in the neighborhood that are similar.
Four months later we bought a new house in Southern California and looked at the Zillow estimate which was exactly what the owner was asking and what we offered. Six months after purchasing the house Zillow dropped the value by about 100K. They must have changed their algorithms. I don’t trust Zillow to be accurate.
Yep, Zillow is all over the map. Check out my 2016 Year In Review Post that has another two Zillow examples with charts that are out of whack.
The reason most of the public, however cognizant of the true marketing costs involved in selling real estate, feel that 6% or 5% or 4% is exorbitant is that they do not think of real estate as a business, or they haven’t run companies or been entrepreneurs. And the two things which the general public may not consider in forgetting that real estate companies are a business are:
1) Total costs. Marketing is a smallish part of a real estate business. Staff payroll, rent and building maintenance, insurance, utilities, equipment, furnishings, supplies, licenses, education…the list goes on, for both the company and the agent.
2) “Non-performing” clients. If your property doesn’t sell, the realtor doesn’t get paid a penny. Many either don’t sell during the listing period, or take a LONG time to sell, often because the price is too high and the seller won’t lower it. No one pays for that time, nor, with some exceptions, any portion of the costs associated with that time. On the other side, perhaps 70% of “buyers” don’t buy, and no one pays for those costs. Realtors could bill by the hour, but no one would pay that way when they can pay nothing unless they sell, or pay nothing whether or not they buy. Payment by commission will always be the public’s choice, and most of them will never realize that the business costs MUCH more to operate than the commission on their home.
As you’re guessing by now, I have a real estate business; with 10 agents. We’re in a high-value area, and our annual expenses are $1.8 million. With an average selling or listing side commission of less than 3% and an average company share of those commissions at about 35%, you can do the math…we have to sell a lot of real estate to break even. Of course there are unscrupulous realtors. Just like there are unscrupulous lawyers, accountants, contractors, even journalists…or doctors. But trying to make a living providing a valuable and usually much needed service for the public does not qualify someone as unscrupulous. The average realtor in America earns $50,000, with NONE of it guaranteed. Some months they earn nothing, and work just as hard. Harder even. Most of the realtors I know are very hard working folks; they don’t do it for the money as much as the relationships and because they just love houses and the business. And helping people.
Just like most things we think we understand, we usually don’t. We think that whatever we believe is the truth. I’ve found that thinking that way is not a virtue. It’s a vice, and it belittles everyone involved. And, unfortunately, it is VERY seductive. Human nature, we call it.
I would be happier paying a realtor an hourly fee, as I would any “professional” (lawyer, doctor, etc.), rather than the commission. As Sam points out, the justification for the commission is not scalable to higher-priced properties. Why wouldn’t a realtor prefer to be paid for their time spent, as opposed to getting a commission? Because, as price goes up, the commission gets higher and it becomes free money. The amount of work is about the same. Yes, very high end homes ($5M up) may require a certain level of contacts, and higher-end, more expensive advertising. But other than that, there’s no way a $2M home costs 5x what it takes to sell a $400K home, or 8X a $250K home. On a $2M home, at $100 an hour, is a realtor really going to put in 1000 hours of work, and spend $20,000 for pictures, etc.? Of course not, most of that $120,000K commission is just gravy.
And really, what is the need for a realty office anymore? A realtor can work for himself now. It’s not like a car lot, where you have to be where the inventory is. There’s no need to be paying these commissions to support a big brick-and-mortar setup. Those will be going the way of the dinosaur.
The way most homes are presented for sale by realtors is pretty underwhelming too. 10-30 pictures, and little puff description, and that’s it. Most of the pictures are more of the decorations and furnishings of the house, rather than what the rooms are like, and more importantly, how the rooms sit in relation to each other and the house layout. When I sell my home, I’ll do as Ryan did, and most importantly have a dedicated website for the property, with pictures of EVERYTHING. Flyers will refer to the website, where voluminous information will be provided – dozens of pictures, floor plan, survey, list of remodeling, improvements and updates, all dated, etc.
What is gobsmacking is that less than 5% (probably more like 2%) of properties ever show a floor plan. Yet this single thing is more important than 30 photographs of rooms with the sellers furnishings and decorations in it, with no idea of how the rooms flow. A very simple thing to provide. The other thing that I want to see is a survey of the property. Those 2 things, along with supporting photographs, will tell a person whether that property and that floor plan is suited to them so much more quickly then just pictures of 2 or 3 walls of a square room. And a floor plan with dimensions is even better. Anybody who’s gotten an appraisal or bought the property is going to have these items, so why not provide them? Because most realtors are hide-bound and dated in their thinking, and just think that throwing up a few pictures and a bit of happy-talk about the house is the way to sell it, as it has always been, before the advent of alternatives. It’s the minimum they need to do.
I’ve had both good and bad realtors. The bad realtors took me to 3 or 4 houses over the course of 2 hours, and then asked which one I wanted to buy. When I said none of them, they hit the road. The good realtors worked with me until I found what I needed. In one case, it took about 3 years. Now, that was in the 80s, before we had access to the listings. They ended up just giving me their MLS books, and I went through weeding out properties, so in effect I was doing part of their job. But she was very supportive, and worked with me until I found the perfect house. I drove every street around the lake front of the 10-12 lakes on the chain, dozens of miles. I knew virtually every house, as did she, because she lived in the area. I had no problem with her getting paid her commission. For buying a house, I think I’d go the route of hiring a realtor as a buyers agent, for a fixed, agreed-upon amount up front. That way, they won’t be steering me to a more expensive property just to get a higher commission.
13 years ago, we needed to sell my mother-in-laws house in FL. I went there, talked to 2 realtors, got an estimate of the price (this was before Zillow). I then found a guy with a realty license who was willing to do the paperwork for me for $1K, we put 3 signs up – 1 at the house, and 2 at busy intersections near the house. We sold it for $1K off my asking price in 1 week (and that asking price was what the realtors suggested it should sell for). Guy did the paperwork, done deal within 3-4 weeks total. About 2 weeks after that, I get a call from one of the realtors, asking when I wanted to put the house up for sale. I told him it was long sold, a done deal. There was silence, then he asked what it went for. I told him $1K under his estimate, plus $1K for the paperwork (I was in TX at the time, and needed someone to do the paper locally for me). A longer silence, and then he muttered, Wow, you really did good, and hung up. A real go-getter, that one! Yes, the market was hot at the time at that location, but I certainly can’t see paying this guy over $10,000 to do what I got done for $1k, and in less time.
As with any paradigm shift, there will be a transition period, and I think that’s where we are now. In 10, 20 years, the current realty business model will be akin to that of the buggy whip manufacturers.
Yeah, but you could argue that there should be some incentive for your realtor to get as much as s/he can for you. Disturbingly, this also creates an incentive for the buyers agent to make you pay as much as you are willing to
See: The True Cost Of Selling A Home Today (It’s Ridiculous)
checking Zillow estimates is like watching the price of pork bellies.. up/down, up/down, up/down… even the comps make absolutely no sense in our neighborhood… homes 30% smaller in size with fewer bathrooms are valued 25% more than our home, and sales of smaller homes that are on the same street have no effect on zillow’s ‘zestimate’ of our home even though the verified sale price of those smaller homes in much, much worse condition were many thousands of dollars higher! Zillow is a joke and time-waster like Facebook!
Zillow is making it hard for me to sell my property. It is worth 4x what they are posting. I own lake front property . But their bad estimate is making it hard for me to get what I would like out of the house. Too bad there is not a way we can file a class action at Zillow for degrading our values. Shouldn’t they be arrested for racketeering. You would think with the way they are ruining our financial situation; charges would be pressed by our DA’s.
I bought my house less then 3 years ago, at that time Zillow valued my house close to what I paid for it. Within a year, Zillow valued my house at 17K more then what I paid. Today it is valued less then what I paid for it and less then what I still owe on it. It makes no sense, I have made improvements, repairs, and updates on this house. The lot next to mine has an old mobile home on it and is valued close what my house is, because it has one more bedroom then my 1993 built house. I think Zillow has it way wrong. My taxes were assessed at a higher value then what Zillow listed, I fought it, and the county reduced it back down to 14k over what I paid for it, based on comparables. Now Zillow says it is worth 21K less then the county’s assessment, and 7K less then what I paid for it. Very unreliable information. I am not in the market to sell it, but their information, devalues my property so much that if I was, I could not even get what I owe on it back out. Sicking!
Every home I’ve sold made at least more than $50k of Zillow’s Zestimate. -Washington, DC
Sam,
I’m surprised you didn’t touch on selling the house yourself. This is what I did. I had professional signage made, paid $300 for an MLS listing, and went to staples to print up very pro flyers (template was free).
Yes, I did STILL have to pay the buyer’s agent…but upfront I SET the rate, rather than having to negotiate it. That shows up on the Agent’s MLS sheet, so they know going in what they’ll make.
Paying have the going rate made a big difference to me. The work involved? Not really too much. Stage your house, take careful pics and make sure they show well, keep it clean. Yes, the time wasters coming through were a drag, but not worth thousands of dollars to me to avoid.
Real Estate agents – particularly VERY good ones who know the market are worth it. But I’ve met alot of folks who don’t seem to know much more than I do about a home…and many who know less (background in construction).
So, I would do it again for sure. Thanks for the writeup.
Hi Ryan,
What did you end up paying the buyer’s agent in terms of commission rate?
I absolutely agree with the way you did it. But I’m on strike selling any property until there is a flat fee or a total fee of 2% or less. One of my properties is worth $2.5-$2.9M. I’m not paying more than $50,000 to sell it. What a waste!
https://www.financialsamurai.com/property-sellers-go-on-strike-dont-sell-your-home-if-you-dont-have-to/
I agree with you….assuming you have the ability to “hold”. In my case I didn’t.
I paid 2.5% commission. The broker mentioned to me “this is lower than my normal rate” (OK, whatever!).
He was cool and all, but the whole process just highlighted how unnecessary agents are in the age of the Internet.
You *might* be able to sell without the commission thing given the locale (S.F.), but for most people, you have to pay to get access to the buyers. I Sold My House.com has been a bit of a flop. It only works in super hot markets.
Given the expense of buying a home, people want hand holding. The crazy bit is they aren’t really analyzing what they’re getting.
When I was trying to determine if I’d sell myself…I went to the NAR website and read “why you need a realtor”. And it was basically all scare tactics. All you need is the MLS listing access and 6 months of sales to price correctly.
Still…I don’t think real estate agents are going the way of travel agents…and ironically that is because of 1.) consumer fear of getting the purchase ‘wrong’; and 2.) buyers who don’t pay “anything” to their agent.
At first blush the second point seems wrong. “Sure they pay, it just gets tacked on to the cost of the home!”. Wrong. I didn’t lower my price relative to other homes to shave 2.5% off the price…I pocketed it as payment for my time and the ‘risk’ of going it alone.
In a market where ALL or MOST buyers are foregoing agents, then yes, that unwarranted premium goes away. But it won’t be in our lifetimes I’m afraid.
I’ll give your second article a read! Best.
Zillow and Trulia are total scam! The home prices are so low, invites all the criminals to buy homes in good neighborhood and create one big ghetto city. The good homeowners who put so much money and effort to keep their home intact, now they are forced to move to a new locations due to many home buyers who are moving in, and cannot take care well for their new homes, creating poor neighborhoods, and all the good home prices are plunging down to nothing! The sellers are loosing almost 50% of their home value.
Senior citizens are most victims ripped off their homes who are trying to sell their homes to move to assisted living facilities. Zillow and Trulia created a rip off web.
DON”T PUT YOUR HOME FOR SELL AT ZILLOW OR TRULIA!
A realtor wanted to sell my house for $49k. But I went to a bank and the banker told me my house worth $99k or more due to all improvements and the age of the house is newer. I don’t trust Zillow or the realtors. The calculations go only 2 miles radius, where the banker told me to go 5 miles radius around my house, them price it to homes who are similar to yours.
The realtors are for their pockets and rip off homes from owners of their profits.
i met several home buyers who told me, ” I got my house practically for nothing”!
I have buyers who come to see my house and their cars, suv’s, hummers’ are more expensive then my house. for some buyers with expensive cars only their hub caps are worth more then my house whole furniture. Everybody is a scammer and a free loader. If they want cheap homes there is the ghetto.
I actually like Zillow and Trulia a lot. They provide an interface that is easy to use and full of information. I am working with a realtor for my weekend home purchase, and it is fun to see all the homes available, inside and out, as well as the land and the neighbors street views. I have also compiled a spreadsheet with over 50 somewhat similar homes to use a comps for the one I am looking. I find the recently sold home information very valuable, specially when I can see the pictures and really compare homes. I never, ever look at their estimates or trends. My spreadsheet is more accurate because it contains truly similar homes in all the aspects that are important to ME.
Turnstone, that is exactly how you use Zillow and Trulia. If you use it for anything else, it either gets complicated or the information can be very inaccurate.
Values change from home to home in high density areas and from block to block in suburban ones. Yet, AVMs aggregate data from “rings”, for example, a 1 mile radius around your home, which often includes areas of greater or lesser desirability. As a result, home values are skewed. Baseless comparisons are never fun to work with, are they?
Hello,
I have recently tried to sell my house thru a real estate agency and they have put my house in zillow. The problem is the school district is wrong and it ranks 2 out of 10 and the right one is 7 out of 10. from 2800 viewers I had 2 people that came to see the house. zillow causing me loosing money with their inaccurate information. After contacting them more then few time also thru my agent … no reply.
What can I do?
Thank you,
Josh.
Put your house on marketplace and craigslist. Dump the realtor! I got more clients looking at my house then from realtors and zillow.