Pricing Of Homes - Are Online Sites Such As Zillow & Experian Fair And Accurate?

December 8, 2006

  Zillow & Experian and several other companies, have created online websites offering home valuations to consumers.  It may seem like a great idea and maybe even a flair of magic.  However, it has become a nightmare to real estate agents and to the buyers and sellers.
 

I do believe these companies have good intentions that they are providing this information to assist the consumer.  Helping the consumers with knowledge to empower them when they are ready to transact a real estate purchase or sale.  But, these companies may have created a big problem – a huge percentage of the time the information is incorrect. This horrifies many homeowners.  I’ve seen many incorrect evaluations via zillow, and I’ve read where seller’s homes were listed on zillow.com at or in excess of a half a million dollars below the recent purchase price.  In my opinion, this does not appear to be an acceptable way to help consumers.
 

Recently, I encountered someone who looked up a neighborhood on Zillow and proceeded to tell me that the home was way overpriced.  It was not my listing, but in professional experience and my research, I believe the property was priced fairly.  Being a member of the MLS provides me access to the current sales whether through the listings that were sold through the MLS or by my direct access to the Tax Roll.  In either case, these methods have current  and actual sale prices and comparisons.  In this particular instance, the buyer has decided not to proceed to write an offer for that property.  While I look-out for the clients best interest, when I tell them that the pricing on Zillow is not always accurate, they can suspect that I’m just saying that to make a sale.  I have always believed ‘it is what it is,’ tell the client the truth so they can make their own decision.  But in this case, the sellers facing the inaccuracy on Zillow is a huge roadblock and can be quite costly to them.  A major problem with these sites is they don’t seem to offer an easy way for consumers to contest their figures compared to current figures from the MLS or Tax Roll.
 

Zillow states and boasts about its accuracy.  However, I read where they state that their pricing will be within 10% of an accurate price 62% of the time. That’s horrible - even 10% off isn’t good.  They seem to be underestimating current values by a huge percentage - more than a third of the time isn’t something anyone should boast about, especially when speaking of someone’s home – their most valuable asset.  The good news is that the facts are on the homeowner’s side.  Realtors price homes more accurately – usually within a 1% margin according to the National Association of Realtors.  Why, because we have access to the correct information.  If you come across someone who disputes the pricing of your home, have your agent provide you with the current comps.  This should help counter any incorrect information.

For additional real estate information please call or email me.  (619) 297-7001  Gary@OceanViewHomes.com