April 10, 2015

Categories Real Estate

Facts About Zillow Every Buyer Should Know

How accurate is the listing inventory?

Unlike wkre.com or Realtor.com, Zillow does not receive listings from every brokerage in our market, so many listings that are currently for sale do not appear on their website. In a recent inventory comparison between agent listed homes on Zil-low compared to the MLS in Boulder County, Zillow had 29% less inventory than the MLS. This means that buyers searching for homes on Zillow were missing nearly 30% of the homes on the market.

Source: Comparison of listings in IRES MLS compared to Zillow.com of for sale “By Agent” in Boulder County in April 2015

Why does Zillow display homes as “Active” listings that are already under contract or sold?

Zillow pulls its listing inventory from many different data feeds which can cause it to be slow to update the status of the listings on their website. Therefore, it is very common to find homes listed as “for sale” that are actually under contract or sold. According to a recent study, up to 36% of Zillow’s inventory that is listed as “for sale” is already under contract or sold.

Source: Redfin: Data Quality Study—https://www.redfin.com/about/data-quality-study

Are Zestimates accurate?

According to Zillow CEO Spencer Rascoff they are “a good starting point” but that nationwide Zestimates have a “median error rate” of about 8%. On a $500,000 house, that would be a $40,000 disparity — which can potentially distort the per-ceived market value of a listing.
Source: LA Times article “Inaccurate Zillow ‘Zestimates’ a source of conflict over home prices”
According to Zillow’s own website:

The Zestimate® home valuation is Zillow’s estimated market value, computed using a proprietary formula. It is not an ap-praisal. It is a starting point in determining a home’s value. The Zestimate is calculated from public and user submitted data; your real estate agent or appraiser physically inspects the home and takes special features, location, and market conditions into account. We encourage buyers, sellers, and homeowners to supplement Zillow’s information by doing other research such as:

  •  Getting a comparative market analysis (CMA) from a real estate agent
  •  Getting an appraisal from a professional appraiser
  • Visiting the house (whenever possible)

Source: Zillow.com/zestimate

Does Zillow display inventory that is not in the MLS?

Yes, Zillow displays several types of listings that are not listed in the MLS including for sale by owner, pre-foreclosure, and coming soon properties. These properties are either posted by the homeowner or taken from public records. Pre-foreclosure properties in particular can be deceptive considering that they are properties in which a foreclosure has been filed against the borrower but the action is not resolved. It can take several months or even years before a home reaches foreclosure, so homes listed as “Pre-foreclosure” on Zillow may not be available for quite some time, if ever.

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Meet the author

Jeremiah Daly

Jeremiah is a real estate agent specializing in Boulder County’s fast-paced residential market. To provide his clients a competitive edge in Boulder’s intense local market, Jeremiah utilizes the most innovative and effective marketing technologies. His work has received national recognition, receiving several national awards, culminating with a seat on an international real estate technology advisory committee.
Jeremiah Daly

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