DEBUNKING ZILLOW IN SARASOTA
Zillow and Trulia do a great job of marketing to get the general public to visit their sites. Unfortunately, a lot of people don't realize that neither company is actually a licensed real estate broker in any state.
#AccuracyMatters. Zillow and Trulia do not exist to sell homes. Their business models are based on selling advertising on their sites. The more visitors they get, the more they can charge for advertising.
Zillow, in particular, doesn't care that their data is inaccurate. They freely admit that their "Zestimates" are a range of values based on a mathematic formula. Accuracy matters not at all to Zillow, as long as they can report continuing increases in traffic on their website.
A study of Zillow and Trulia listings show that each has 78% of the total active listings of Realtor.com and local MLS data. The same study revealed that 17% of the properties displayed on these sites were not available for sale in the local MLS. In 2012, a man hired by Zillow to gain access to local MLS data left after 18 months on the job, citing MLS associations' concern over mingling data with Zillow's inaccurate data.
ZILLOW AND TRULIA
Consider these points when searching for real estate on Zillow:
Zillow does not have one single employee, or licensed real estate professional, in any local market in the US or Canada, that has ever set foot in your home or your neighbor's home down the street;
Zillow has no knowledge of local neighborhood boundaries, making their Zestimates even more unreliable;
Their real estate values are calculated from an algorithm applied to publicly available tax values. Tax values have nothing to do with market values;
Not one single mortgage lender uses Zillow "zestimates" for property values in a loan appraisal.
ZILLOW IN THE NEWS
WHAT ZILLOW AND TRULIA
MEAN FOR HOME SELLERS
Zillow says they list pre-foreclosure homes on their website so buyers can get a leg up on getting the best deals first.
You cannot buy a pre-foreclosure property directly from a bank until they list it for sale in the MLS, or until it goes to auction. Period.
Zillow scrapes pre-foreclosure data from local municipality tax databases, to appear to have a large number of available homes to the public.
Zillow can show homes that are not actually for sale, because Zillow is not the MLS nor a licensed real estate broker. All MLS groups across the country have rules governing data accuracy and property availability. Zillow has no such governing rules.
As a seller, when you hire me to list your home for sale, I am fully prepared to combat inaccurate Zillow data from the day your home hits the market, resulting in a realistic sale price and a quicker sale to educated home buyers.
If you try to list your home by owner on Zillow using Zillow "Zestimates", you could be costing yourself money by pricing your home too low.
Zillow pays employees to act as "consumers" who give advice to potential buyers and sellers on their website forums.
Look at the number of posts or answers a supposed unpaid forum member makes on Zillow. Who works that much not to get paid?
WHAT ZILLOW AND TRULIA
MEAN FOR HOME BUYERS
As a buyer using Zillow or Trulia without a buyer's agent, inaccurate data will result in lost time and money.
If the home won't pass an appraisal, which uses MLS data, you can't get your mortgage.
You might have spent money on a home inspection, mortgage application fees, or surveys that aren't refundable and you'll have to back out of your contract.
LIST PRICE TRENDS
If you see statistics on Zillow or Trulia showing "list price trends", disregard them.
Our industry makes property valuations based on sales prices in individual neighborhoods, rather than listing prices.
List price statistics can be affected by a large new home community coming on the market, or a few luxury properties being listed in a particular zip code. A prime example of this in the Sarasota area is zip code 34202.
ZILLOW'S MAKE ME MOVE MYTH
The supply of homes for sale is near historic lows across the country. Zillow markets their "Make Me Move" feature as a way to increase options for potential home buyers. It's pretty ridiculous.
If someone asked you what it would take to make you move, you'd probably give an inflated price. A buyer will never get a mortgage for your inflated "Make Me Move" price.
Zillow's mobile app has the same inaccurate data as it's website.
Do you really want to spend time and money driving to a property you found on the Zillow app, only to find it sold a year ago?
Get accurate, available property updates when you want them.
Below are screen shots of Zillow's statistics for Sarasota for 2011 through 2013. Zillow overvalued Sarasota real estate 75% of the time over the last 4 years.
For a 2014 analysis of Zillow versus the MLS for Sarasota and Venice, read my blog post.
Sarasota County Median Home Sale Price Zillow vs MLS
2010: Zillow $153,600 Local MLS $135,000
2011: Zillow $130,000 Local MLS $134,900
2012: Zillow $220,900 Local MLS $155,000 (Zillow prices increased, then dropped again in 2013?)
2013: Zillow $201,700 Local MLS $184,500
2014: Zillow $200,700 Local MLS $205,580