One of the common question real estate agents get from sellers centers around a home’s Zestimate on Zillow. Deep down sellers know what homes are selling for in their neighborhood and how their home compares.  Often, they just want to try a much higher price simply because Zillow says their home is worth more.  We attempt to answer the question, Are Zillow home value zestimates purposely inflated?

The buzz amongst real estate agents is they can’t believe how far off many Zestimates are these days.  Agents laugh anytime the words Zillow and home values are mentioned in the same sentence because they know they’ll have to explain how inaccurate these things tend to be.

Last weekend I had a conversation with one of our sellers.  She brought up her Zillow Zestimate.    Within 15 minutes after that conversation I went outside to work in my yard and my next-door neighbor asked me about his Zestimate.  He noticed it went up over $100,000 last month and wondered if the real estate market was that good right now.

Zillow Home Value Zestimates Purposefully Inflated

Of course, his value didn’t change $100,000 last month.  Perhaps you’ve heard the story of Zillow CEO Spencer Rascoff.  His home was valued at $1,750,405 on March 1, 2015.  The funny thing is, it sold 1 day earlier for $1,050,000.  That’s a difference of $700,405.  Put another way, Zillow was off over 40% on their CEO’s own home.

Are Zillow Home Value Zestimates Purposefully Inflated?

So is Zillow’s data that bad, or could there be another motive?  Let’s remember where Zillow gets its revenue. Zillow charges agents, property managers, and lenders to appear on their website.  They are gathering leads to sell to agents.  Some agents pay several thousand dollars per month for these leads.  Zillow takes MLS and public records data and assembles them and markets that data to the public in the hopes of attracting eyeballs to its site.

To increase revenue and charge more to agents, brokers, and lenders Zillow must increase visits to the site.  One way to do that is advertise more on the Internet and TV.  Another way is to change up the values frequently in hopes of getting repeat viewers to come back often and see what’s going on with their value.

We get it.  The market changes every day.  It doesn’t typically change $84,000 in one day.  So, either Zillow’s algorithm for calculating values is off, the underlying data are off, or they are trying to create a buzz by getting people to check back repeatedly.  In the news business, they call it Click Bait.  Click bait is when editors write a sensational headline to get readers to click on the article.  It could be fake news, doesn’t matter.  If the headline works, it attracts readers which ups the hit count.  The higher the hit count, the higher the advertising rates.  Most reputable news organizations don’t utilize this tactic.  They don’t have to because they have valuable content.  Tabloids on the other hand use this with perfection.

Agents are paying top dollar presumably for new leads not realizing Zillow is stoking the fire by attracting the same old leads repeatedly.  Consumers may be unaware that Zillow now has data on everyone who has checked their home value, and they are selling data like that.

Zillow Admits Errors

Zillow says that nationally their Zestimates are off by 7.9% on average.  That’s a lot!  However, in Seattle where their CEO’s former home is located, they claim to be more accurate at only 6.1% off.  Can we really trust their numbers when they were off over 40% on their own CEO’s home?

If you’re thinking of selling, we have an automated valuation tool that may be more accurate.    More importantly, we will never sell your info to other agents and brokers.  Why would we?  We want your business.  We’d love to earn your business.

If you’re thinking of selling, call the Ellis Team at Keller Williams 239-489-4042 Ext 4  Let us show you how we put more money in your pocket at closing than other Realtors and how we sell homes Fast!  And, we’ll show you what true Top Dollar is for your home so you can make accurate decisions.

We’re here to help.  Always ask for Sande Ellis or Brett Ellis.

Read about Southwest Florida Real Estate Market Statistics to be released tomorrow.

Paint the Town Red

This weekend is the Keller Williams Paint the Town Red Event.  We’ll have around 100 homes open in a single day.  It’s the single biggest open house event of the year.  Check back as we’ll be posting the addresses here.

Ellis Team Featured Open Houses

Sunday 1-4 PM

Ellis Team Open House

6180 Winkler Rd

 

 

 

 

 13624 Gulf Breeze St Reflection Lakes Pool Home

Dear Ellis Team:

Dear Ellis Team - Your Real Estate Questions Answered

Q: I’ve been paying my mortgage but slipped behind on my HOA fees. I didn’t want the bank to foreclose. I was surprised to learn that my homeowner’s association filed foreclosure on me. Is this normal? Alex

A: Alex, sorry to hear about your dilemma. This however is a great question. We have been seeing more and more condo and homeowner’s associations foreclosing for non-payment. We always tell people, pay your HOA first as some of them will foreclosure faster than a bank will.

Q: My home has been on the market for 4 months and we haven’t had a single showing. Are agents lazy? How come nobody wants to show my home? I didn’t want to pay a commission in the first place and I didn’t like my agent’s price. I told her if she wanted that much we’d have to raise the price for her to get it. I guess she didn’t want it that bad! Anonymous

A: Well anonymous, where to begin? The seller sets the price and the market determines the value. If you’ve priced your home above where the market is, you may not receive any showings. Why would a Realtor deliberately show an over-priced home when they can show other homes a buyer might actually buy? Sellers often believe they can always come down but you can’t go up. This isn’t even true as we have several homes that sell above asking price. It sounds like you wanted what you wanted for the home regardless of what the market was bearing. The market doesn’t care what you want or need. The market only cares about value.I’m also concerned about 2 other things. You’re blaming your agent for your mistake. The agent isn’t to blame for you wanting more than the market will bear. I do blame your agent for taking the listing in the first place. Sometimes a home has few comparable sales to value properly, and sometimes you just have to bring it to the market and see how market responds. Your agent should be communicating with you about re-positioning your home in the marketplace. Your question doesn’t tell us anything about that. If she has, she’s doing her job. We really need more facts to answer this any better.

Q: I went on abc.com (we blanked out the actual website) and it said my home was worth $412,000. I go on every day and it changes wildly. One day it said $350,000 and another it was up to $475,000. How can the market vary that much in such a short time?

A: The site you are talking about is historically unreliable. In fact, in the fine print it used to say their data was intentionally off. I guess this made online viewers have to check back often, which increased viewership, and thus advertising rates. Some of those national sites are filled with bad data. To get a more accurate and reliable estimate, go to our site www.LeeCountyOnline.com Even then it is just a computer. For the most accurate, call us and have Sande or myself evaluate your property if you’re thinking of selling. 239-489-4042

Q: What are the qualifications to becoming an agent? Can anybody do it?

A: Just about anybody can. You must not have a felony. You do not need to be a college graduate at this time. Anybody can do it, but not everybody is the same. Anybody can play baseball, but it doesn’t mean everybody is good at it. The best practice every day, learn, take classes, and work all day at it. Real estate takes work, and for those that are prepared to out-work everybody else, you can do it. You can do real estate part-time, but you won’t be great at it. It takes years of learning about property, people and situations. There’s always a place for great people in real estate, and yet about 80% fail within a year. It’s all about you and what you’re willing to put into it.
If you have more questions, give Sande or myself a call. 239-489-4042. We love helping people.
Good luck and Happy Selling!

We hope you enjoyed our answer.  If you’d like to ask more questions, simply write Dear Ellis Team and we’ll be glad to answer your questions.

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Paint the Town Red Open Houses this weekend:  Coming Soon