Zillow has long been hounded by real estate agents for the inaccuracies of their home valuation model known as the Zestimate. We’ve talked about the unzillowable factor before on the site. Automated home valuation models are often pumped up to be the next big thing in real estate, but so far, they’ve fallen flat and have not lived up to most people’s expectations. But home buyers and sellers are still using them and they’re not going away anytime soon.
The other day, in one of the Facebook groups for real estate I frequent, Jonathan Dalton of All Phoenix Real Estate, pointed out that the Zestimates now come with an additional note that had not previously been there.
A Zestimate® home valuation is Zillow’s estimated market value. It is not an appraisal. Use it as a starting point to determine a home’s value.
The emphasis on the last two sentences is mine and it shows that Zillow is making steps in the right direction to help visitors understand that the Zestimate is not the be all, end all of pricing. In all fairness to Zillow, they have had such disclaimers and wording on their site before, but it was often hard to find.
I still don’t think this will solve every problem with home valuation models, but it is a start. Hopefully sites like Zillow will continue to evolve and help their visitors understand the role we as agents play in the pricing and marketing of homes for sale.
image courtesy of Lachlan Hardy
Zestimate does not consider that in my city (Miami) there are luxury neighborhoods, working class neighborhoods and even housing projects, but it makes an uneducated homogeneous average by including the $10,000 Luxury units in Brickell and the $700 units in Little River. I see landlords trying to use these inflated Zestimates for their roach motels in working class or even poor areas. Meanwhile, there is a housing crisis in the city as salaries (especially after the 2008 crash) do not meet the needs for the Zestimates now being charged for even Liberty City!
Here in Texas, we are a non-disclosure state, so it makes it even harder for the Zestimate to be accurate. We still see people basing their numbers off of these, so it’s our goal to educate and inform the clients of the issues as they exist with them.