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Old 11-08-2018, 01:45 PM
 
21,656 posts, read 9,229,371 times
Reputation: 19121

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Two houses: One is my best friend's. Bought it for $1,1m something in 2008. Almost identical home on identical lot sold in 2014 for $1.5m. Identical icky lot, identical size, yr built, etc. Friend is being relocated for job so listed house $1.3. Needed to get quick offers so dropped the price twice in less than 45 days. Some kind of deal with relo to get a bonus for a quick sale. Now priced at $1.15 and no contract. Zillow has it valued around the same. So just for fun, I decided to look at the OTHER identical house. Zillow has it's value at $1.778. Without a doubt, that's the worst example of what I see going on with Zillow I have seen.
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Old 11-08-2018, 02:27 PM
 
Location: Pacific Northwest
438 posts, read 371,888 times
Reputation: 2106
Zillow, like listing sites such as Redfin operate as a high tech marketing site. I worked for Redfin for a bit in their tech department and it's pretty comparable to Zillow (the owners of Redfin and Zillow used to be friends or industry peers before creating opposing companies).

There could be a multitude of reasons why the "identical" home is valued at a higher rate. But one of the biggest things I can think of is internet traffic to the particular home listing. The more people click and look at the home, the larger that home has a traffic rating. The way Zillow and sites like it work is they established the value of homes based on the perceived interest level and other qualifiers that no normal person see's, but Zillow will have info based on the interactions the home listing receives. If it have a lot of people save the listing or directly look it up that's increase the digital foot traffic of the listing and Zillow figures it's a highly sought out home therefor raise the perceived value of the home. So if you, your friend, and a couple other people click on the listing within a week you'll add to the amount of interest in the home and possibly raise the perceived value.

It doesn't stop there, price can also rise if home searchers or realtors make saved searches that highlight elements that the home has, if the neighborhood has a change that is noted as a positive like a new grocery store, or if the owner of the home updates something inside the home and Zillow get's wind of a renovation.

This is why you'll get different vales for homes from Zillow, Redfin, and Realtor.com; they all use different strategies and equations to estimate home value. It's important to note that the estimated home value is less for home buyers, and more for these sites to market and sell their platform to Real estate Agents and potential home sellers. I would advise your friend to mostly just ignore the estimates, if anything it'll help showcase your friends home as a steal and help sell it sooner. The higher price could be a recent reflection that homes are selling in the area or other hidden items (the home was purchased more recently so the previous real estate listing could have highlighted particular or newer items inside that are desirable for home searchers in the area right now) so it's hard to truly compare when it's not on the market and properly evaluated.
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Old 11-08-2018, 03:53 PM
 
2,916 posts, read 1,494,684 times
Reputation: 3112
I was looking for a condo about 2 years ago. There were tons listed on Zillow that had already been sold. I was told that Realtor.com is more accurate, only showing current listings. I used that, and it was helpful
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Old 11-08-2018, 04:10 PM
 
21,656 posts, read 9,229,371 times
Reputation: 19121
Quote:
Originally Posted by musicfamly5 View Post
Zillow, like listing sites such as Redfin operate as a high tech marketing site. I worked for Redfin for a bit in their tech department and it's pretty comparable to Zillow (the owners of Redfin and Zillow used to be friends or industry peers before creating opposing companies).

There could be a multitude of reasons why the "identical" home is valued at a higher rate. But one of the biggest things I can think of is internet traffic to the particular home listing. The more people click and look at the home, the larger that home has a traffic rating. The way Zillow and sites like it work is they established the value of homes based on the perceived interest level and other qualifiers that no normal person see's, but Zillow will have info based on the interactions the home listing receives. If it have a lot of people save the listing or directly look it up that's increase the digital foot traffic of the listing and Zillow figures it's a highly sought out home therefor raise the perceived value of the home. So if you, your friend, and a couple other people click on the listing within a week you'll add to the amount of interest in the home and possibly raise the perceived value.

It doesn't stop there, price can also rise if home searchers or realtors make saved searches that highlight elements that the home has, if the neighborhood has a change that is noted as a positive like a new grocery store, or if the owner of the home updates something inside the home and Zillow get's wind of a renovation.

This is why you'll get different vales for homes from Zillow, Redfin, and Realtor.com; they all use different strategies and equations to estimate home value. It's important to note that the estimated home value is less for home buyers, and more for these sites to market and sell their platform to Real estate Agents and potential home sellers. I would advise your friend to mostly just ignore the estimates, if anything it'll help showcase your friends home as a steal and help sell it sooner. The higher price could be a recent reflection that homes are selling in the area or other hidden items (the home was purchased more recently so the previous real estate listing could have highlighted particular or newer items inside that are desirable for home searchers in the area right now) so it's hard to truly compare when it's not on the market and properly evaluated.
Well, then that would imply that the for sale home would be valued higher.
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Old 11-08-2018, 06:24 PM
 
3,805 posts, read 9,284,449 times
Reputation: 4978
Quote:
Originally Posted by Grlzrl View Post
Two houses: One is my best friend's. Bought it for $1,1m something in 2008. Almost identical home on identical lot sold in 2014 for $1.5m. Identical icky lot, identical size, yr built, etc. Friend is being relocated for job so listed house $1.3. Needed to get quick offers so dropped the price twice in less than 45 days. Some kind of deal with relo to get a bonus for a quick sale. Now priced at $1.15 and no contract. Zillow has it valued around the same. So just for fun, I decided to look at the OTHER identical house. Zillow has it's value at $1.778. Without a doubt, that's the worst example of what I see going on with Zillow I have seen.
So you're angry about a free website that doesn't perform sufficient due diligence in real estate valuation?
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Old 11-08-2018, 07:14 PM
 
Location: Cary, NC
43,035 posts, read 76,548,777 times
Reputation: 45347
Quote:
Originally Posted by claudia2u View Post
Absolutely. REALTORS are professionals in the industry and REALTORS know how to value homes better than just about anyone else. Duh! That's a no brainer. Therefore I most certainly trust realtor.com's home value estimates much more than some random .com site like Zillow. If you wanna know what your house is worth, just look it up on Realtor.com. Go right to the source. The people who know what they are doing. Are you gonna trust some .com geeks to say what your house is worth or are you gonna trust the guys at realtor.com who are actually REALTORS who sell houses? I see a lot of people complaining about Zillow being inaccurate or whatever. The answer is simple. Use Realtor.com estimates instead! Duh.
Uhhhhh…. Realtor.com pop appraisals have nothing to do with REALTOR efforts or skills.
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Old 11-09-2018, 07:53 AM
 
21,656 posts, read 9,229,371 times
Reputation: 19121
Quote:
Originally Posted by Pfhtex View Post
So you're angry about a free website that doesn't perform sufficient due diligence in real estate valuation?
Who said I was angry? I was just showing the most extreme example I have seen about it being off. Why does it bother YOU?
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Old 11-09-2018, 07:53 AM
 
3,754 posts, read 4,171,990 times
Reputation: 7773
Realtor.com estimates are no better than Zillow as far as I've seen, for my neighborhood they are worse, in fact, they lagged the market where I lived where Zillow was more accurate, and much more fluid with their pricing.


At one point, Zillow had my house pegged at $760k, (and at the time, neighborhood comps bore this out, and using the $/sq ft of sales of similar homes, my home would be $758k) while Realtor.com was showing $650k, very undervalued. After about 6 months, Realtor.com jumped up to $725k while Zillow decreased to $700k.


People need to realize that Zillow isn't infallible, and usually pricing discrepancies are due to human error... There's a house near me valued at $4 million... and it shouldn't be any higher than $500k. Problem with that home was that the listing agent erroneously listed it at $4999k instead of $499k when it first hit the market... That messed up the algorithm for that home big time, and now it's dropping by like $200k a month.
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Old 11-09-2018, 08:09 AM
 
Location: Cary, NC
43,035 posts, read 76,548,777 times
Reputation: 45347
Quote:
Originally Posted by Katana49 View Post
Realtor.com estimates are no better than Zillow as far as I've seen, for my neighborhood they are worse, in fact, they lagged the market where I lived where Zillow was more accurate, and much more fluid with their pricing.


At one point, Zillow had my house pegged at $760k, (and at the time, neighborhood comps bore this out, and using the $/sq ft of sales of similar homes, my home would be $758k) while Realtor.com was showing $650k, very undervalued. After about 6 months, Realtor.com jumped up to $725k while Zillow decreased to $700k.


People need to realize that Zillow isn't infallible, and usually pricing discrepancies are due to human error... There's a house near me valued at $4 million... and it shouldn't be any higher than $500k. Problem with that home was that the listing agent erroneously listed it at $4999k instead of $499k when it first hit the market... That messed up the algorithm for that home big time, and now it's dropping by like $200k a month.
"With great power comes great responsibility..."
Responsibility which the pop appraisal purveyors shirk.
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Old 11-09-2018, 08:11 AM
 
1,094 posts, read 1,137,119 times
Reputation: 2183
Quote:
Originally Posted by Grlzrl View Post
Zillow has it's value at $1.778.

Zillow gives a Zestimate range. On houses @ the $1m+ level there's going to be a very high range because there are very few comparable sales and very high priced houses often have considerations that aren't reflected well in the basic data their algorithm is pulling. I'd bet the range on the specific house referenced is something like $1.0m - $2.4m reflecting the fact that the Zillow algorithm is aware that this specific Zestimate is very uncertain.

That said, because Zestimates are so misunderstood, they should just display 'Zestimate Not Available' for anything that has a range of greater than $200k.
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