If you’ve ever searched for homes online, you’ve probably been to Zillow. Over 73 million people visit the website each month. I think it’s important that consumers are a little more educated on what Zillow is and isn’t so they aren’t led astray.
Zillow has been in the news lately, but not for a good reason. They’re currently being sued for violating consumer protection laws because of their automated home valuation tool, the Zestimate. The plaintiff in the case says that the Zestimate was so inaccurate that it ended up causing damages.
In Zillow’s defense, they have been publicly clear that their Zestimate is not 100% accurate. I hear from clients all the time that, “Well, Zillow says this” or “Zillow says that.” Here’s what Zillow actually does say. Their CEO, Spencer Rascoff, has publicly stated in the past that their Zestimates have a median error rate of about 8%. Last year, it was 14%. That’s almost $50,000 on a $350,000 home!
Rascoff’s own home was a victim of Zestimate misinformation. His home ended up selling for 40% less than the Zestimate said it was worth. That’s like losing $700,000. If Zillow is saying themselves that their Zestimates may be hundreds of thousands of dollars off, you can imagine how accurate the valuation for your home really is.
It all comes down to where Zillow is lacking. Their algorithm can’t take into account all of the things that play a role in a home’s value. At the same time, the market is moving so fast that a lot of their information is inaccurate, which can lead to many other problems.
If you have any questions for us about how we keep pace with the market or if you have any interest in buying or selling a home, give us a call or send us an email. We would love to hear from you.