Zillow is not very accurate
“What about these?”
One of my clients sent me a list of homes he had found on Zillow for which he wanted more information. I dutifully set about to research these properties which were not listed in the MLS.
Two of the properties were listed as “preforeclosures,” meaning that the sellers were late on their mortgage payments and the lenders had instituted foreclosure proceedings but have not yet taken the house back. Preforeclosures are typically flagged as such in the county records. Zillow doesn’t list the address of these properties but instead links to Foreclosure.com, a site which requires paid registration. So instead I looked them up in the county records to identify the addresses and obtain other information.
As it turned out, one of the so-called “preforeclosures” turned out to be an acquaintance of my client’s and he was pretty sure that there were no foreclosure issues with that family.
The other two properties he had sent me as active listings sold and closed in 2010.
The MLS is a better search tool
The truth is, you will get better and more accurate data from the MLS than either Trulia or Zillow. Virtually all properties for sale are listed through the MLS now thanks to “limited service” companies that permit sellers to list in the MLS without hiring a listing agent, so prospective buyers have access to FSBOs as well as listed properties.
You can search the entire Triangle MLS on our site here, and we do not require registration.
And about Zillow’s so-called “Zestimates” of property values?
They are pretty much not worth considering. You can see in the screenshot above that while Zillow’s “Zestimate” for this example is $775,084, the range of value that Zillow recommends is between $666,572 and $860,343. I think you’ll agree that information is not particularly useful.
Appraisal Journal’s study last year of Zestimate data of 1,000 homes in seven states for which Zillow claimed they had the most accurate data. In this sample
Zillow overestimates value for approximately 80% of the houses in the sample by at least 1%. Fifty-nine percent of the Zillow estimates fall within±10% of the sale price and only 0.88% of values are underestimated by more than 10%. The average overestimation is 11.66% or $13,576, with a median of$9,717 or 7.92%.
Zillow is very mysterious about how it calculates the data, saying that it comes from public data including “hard to find” sources that it does not reveal. The problem is that public data comes from tax records which are largely inaccurate. Square footage measurements usually have no relationship to the real property, and there may be additions which were permitted but do not show up on the tax records.
When you’re investing in the largest purchase of a lifetime, it’s a good idea to seek out the help of experts and don’t rely on computer models. This includes Zillow.
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