Inevitably, when I’m on a listing appointment and sitting in the living room or around the kitchen table of a potential seller, Zillow comes up in the conversation – the apparent bible and undisputed resource for local home values.
Sellers are no dummies and they do their homework. I applaud that - they should. After all, it's one of the most important investments they will ever make. Sellers have an idea of what they feel their property is worth because they’ve done their research. Unfortunately, the tools they have access to may not be entirely accurate and has a margin of error – and that margin of error can be significant.
In some markets, Zillow has better accuracy than others when it comes to being up-to-date and incorporating the latest sold data. Zillow is a great tool for a lot of things, but, like any thing else, it’s important you read the fine print – and know what your looking at.
When you’re on Zillow, at the bottom of the page in a very faint font, you will see “About Zestimates.” That’s actually a clickable link that takes you to a page where the accuracy is revealed and explained.
Here’s what it looks like for Arizona:
When I first looked at this chart, the “99%” immediately caught my eye. The “99%” reminded me of an email I got several years ago – I’ve included it below to remind us if 99% is good enough, we should run for the hills. Then, I glanced to the far right column and looked at the median error: In Maricopa County, the error is nearly 15% - YIKES.
Think what 15% really means when it comes to the value of your home. That’s $ 30,000 on a property valued at $200,000. To me, that’s SIGNIFICANT!
Don’t get me wrong, Zillow offers some great information and resources for both buyers and sellers. My point is just remember what you’re looking at and consult with a knowledgeable real estate expert in the area who is familiar with the local market, conditions and factors, not one 1,500 miles away in a glass tower over looking the San Francisco Bay.
Here’s the jest of that e-mail I was talking about earlier that addressed accuracy:
IF 99% IS GOOD ENOUGH, THEN ...
- 12 newborns will be given to the wrong parents daily.
- 268,500 defective tires will be shipped this year.
- 103,260 income tax returns will be processed incorrectly this year.
- 811,000 faulty rolls of 35mm film will be loaded this year.
- 14,208 defective personal computers will be shipped this year.
- 2,488,200 books will be shipped in the next 12 months with the wrong cover.
- Two plane landings daily at O' Hare International Airport in Chicago will be unsafe.
- 3,056 copies of tomorrow's Wall Street Journal will be missing one of the three sections.
- 18,322 pieces of mail will be mishandled in the next hour.
- 291 pacemaker operations will be performed incorrectly this year.
- 880,000 credit cards in circulation will turn out to have incorrect cardholder information on their magnetic strip.
- $761,900 will be spent in the next 12 months on tapes and CDs that will not play.
- 55 malfunctioning automatic teller machines will be installed in the next 12 months.
- 20,000 incorrect drug prescriptions will be written in the next 12 months.
- 114,500 mismatched pairs of shoes will be shipped this year.
- 107 incorrect medical procedures will be performed by the end of the day today.
- 315 entries in Webster's Third New International Dictionary of the English Language will be misspelled.
- $9,690 will be spent every day on defective, often unsafe sporting equipment.
- 2,000,000 documents will be lost by the IRS this year.
- 22,000 checks will be deducted from the wrong bank accounts in the next 60 minutes.
- Homes would be without electricity, heat, water, and telephone service for 15 minutes every day.
- Every page of the telephone directory would contain four wrong number.
Source: (1991) InSight, Syncrude Canada Ltd., Communications Division in a post by snooze button (alarmclock_2000@yahoo.com), November 22, 1999
