Nancy Kowalik of Nancy Kowalik Real Estate Group shares the top five reasons why you cannot trust the accuracy of the Zillow Zesimate for your home’s value. When you are thinking about selling your home, looking at the information on Zillow, (like their Zestimate), is a natural thing to do to get an idea of what to expect when you list. Before you jump, however, please consider these five points.
1. Zillow is not looking at your home’s condition or features, both good and bad.
Here is an example: The property, 9 Chestnut Court, the Zillow Zestimate was $602,781. Three other agents told the seller that the home was worth $650,000. But I could see important updates and the exceptional views and the privacy from its position on the lot. I knew it would sell for more, a lot more!
I sold this home in one day for $767,500. If the sellers believed the other three agents and the Zillow Zestimate, it would have cost them $117,500! When Zillow posts a “Zestimate” without knowing anything about your home’s conditions, improvements or special features of its location their guesstimate is destined to be inaccurate.
2. Zillow has little knowledge of your location or a lot of its qualities.
Mountain Views, cul-de-sacs, golf courses, private yards, “outdoor oases” and distances to schools can add value especially for those parents who prefer walking or biking for their children. Location is 70% of the buyers purchase decisions.
3. Zillow’s data is often inaccurate, and 50% of the company’s revenue comes from real estate agents buying their leads.
They don’t even tell buyers when a home is under contract because buyer calls help sell leads to real estate agents like me. When they post comparable sales Zillow does not always compare apples-to-apples which ultimately negates the purpose of such market information.
4. As the market shifts Zilliow’ s Zestimate cannot keep up with rapid market changes like the rise in interest rates or seasonal changes.
Their values could be over under stated by thousands.
5. The 5th and Top reason your home’s Zillow Zestimate may not be accurate is that Zillow is buying and selling them for a profit!
They have positioned themselves as the gold standard for real estate values online, similar to automobile Kelley Blue Book, but for real estate. They are offering to buy homes under value for flipping, the practice of adding few minor updates then selling homes for profit. So, they tell the world your home is worth X or Z.
Zillow then makes offers to desperate sellers who must sell now. The benefits to that home seller is that they get a quick cash sale. Zillow does not charge a commission but they do make offers on homes well below market value and they charge a 7% or more “Service Fee.”
Zillow Offers is not a fair fight for homeowners who need to sell their homes. Effectively they are selling their homes to Wall Street investors.
Selling your home to Zillow may work for those who need a quick cash bail. But even our local investors will often be more than Zillow for homes. The real numbers are that Zillow is only making offers on 2.4% of the homes presented to Zillow for sale. Once Zillow obtains the contact information of motivated sellers, they sell the leads to real estate agents for 35% of the commission.
Zillow has in their corporate mission statement put to real estate agents out of business! In Zillow’s world, consumers do not need real estate agents. They believe all can be done online with their very powerful website. Time and time again we find cases where sellers gave up tens of thousands of dollars of equity just for the easy button of a quick sale.
The good news is that a majority of real estate agents have the altruistic goal of getting seller’s the most amount of money from the sale, not the least. And, I believe, at the end of the day, because the real estate industry has home sellers best interests at heart. Real Estate agents will be flourishing for decades to come.
At Nancy Kowalik Real Estate Group, my agents and I take every aspect of your home into consideration when we suggest a listing price. Our goal is to get you Top Dollar for your home. If you are thinking about selling your home, be sure to interview with us. You’ll be glad you did!