Why Zillow Homes for Sale are Often Full of Bad Information

Karin Carr, Owner
Published on November 16, 2016


I have a love/hate relationship with Zillow.  Yes, the user interface is easy and nice to look at, the phone app is great, but Zillow homes for sale are just flat out wrong a lot of the time.  For example, I looked at the last few homes I have personally listed and sold.  Not one of the Zestimates was even remotely accurate.  One Zestimate was $229,000 and the home sold for $210,000.  Another was estimated to be worth $365,000 and it sold for $353,750.  Yet another sold for $294,900 and the Zestimate was for $320,100.

Why Zillow Homes for Sale are Often Full of Bad Information

Would I love to have sold all those homes for what Zillow said they were worth?  Sure!  I mean, everyone wants to make more on the sale of their house.  But the comparable sales in the neighborhoods did not support those inflated prices.  At all.  When the highest priced sale in the subdivision was $290,000 we were pushing it to get $295,000 so where does Zillow come up with $320,100 as a value?

I won’t pretend that I understand the algorithm they use to calculate the Zestimate, but clearly it’s not that great if 85 different counties in Georgia alone get a one star rating out of four on how accurate their Zestimate was!

Let’s compare two Zillow homes for sale.  One has new hardwood floors, a killer gourmet kitchen, a stunning master bathroom, and a fenced back yard with an outdoor fireplace.  The other house hasn’t been updated since 1982.  They are on the same street and have the same square footage.  Clearly the updated house will be worth more, but Zillow doesn’t know that because it doesn’t take into account condition.  When a potential seller looks at Zillow’s Zestimate they usually seriously overestimate what their home is worth.  They start out with unrealistic expectations and are disappointed when I have to be the bearer of bad news and tell them that if they list their home at that price, it probably won’t sell.

Probably my all time favorite story in real estate (other than the CEO of ForSaleByOwner.com failing to sell his house on his own and had to hire a Realtor®) is how the CEO of Zillow sold his home for a whopping 40% LESS than his own company’s Zestimate.  

Zillow is also one of the most popular web sites for buyers to research homes, but their information is woefully inaccurate.  I will often get calls from clients saying, “Hey, I’m interested in 123 Main St.  I found it on Zillow.”  I go look it up and it’s not for sale.  It’s not on either of the MLS systems that metro Atlanta uses, it’s not listed For Sale By Owner, it’s nowhere.  The house might have sold 3 to 6 months ago, or it might be in pre-foreclosure status (which just means that the owner is behind on their payments.  It doesn’t mean they’re selling their house.)  But it’s not for sale.  Zillow homes for sale might have a photo of the house, probably taken by the Google Maps car, and an estimated value which looks an awful lot like an asking price, with a lead capture box on the side of the screen.  If that buyer isn’t already working with an agent they can fill out the form to request more information.

When the buyer fills out their info, Zillow then sells this “lead” to a Realtor who has purchased the right to leads from that zip code.  Yes, they SELL YOUR INFORMATION.  And they don’t even sell it to the agent who is listing that house and would therefore know the most about it.  They sell it to the agents who have paid for that zip code.  So the buyer ends up with a call from a random agent (not the listing agent) telling them that the Zillow homes for sale aren’t actually for sale.  It makes the agent look bad for not having the information they’ve requested, and makes Zillow even more inaccurate.  Yet the consumer continues to use Zillow simply because they spend so much money on advertising.  Do a Google search for “what’s my home worth” or “homes for sale in XXX” and I guarantee you Zillow will show up at the top of the search results.  They pay big bucks to be there because when the consumer fills out that lead form, BAM!  They just made their money back by selling your information.

The long and the short of it is, Zillow homes for sale might look nice online and make it easy to search for available homes, but it makes no sense to research values using them.  If you are searching in the metro Atlanta area, my web site has accurate, updated information, a really nice user interface, and it’s also free.  

Keller Williams has a free phone app that’s every bit as user friendly as Zillow’s, and Realtor.com pulls MLS data constantly throughout the day no matter where in the country you live.  But if you’re interested in selling, refrain from using Zillow to figure out what your home is worth.  Just ask a local professional.  We’ll tell you for free and it will be based on actual local data, not on a computer generated algorithm.

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