Search Results for ‘zillow’
Zillow.com Told to Stop Issuing Home Value Estimates in Arizona
The state of Arizona recently told Zillow.com to stop providing Zestimates, their version of property value estimates. The issue is that Arizona feels Zillow is providing appraisals and they do not have a license to do so. Zillow argues that their Zestimates are not appraisals and the public does not think Zillow.com is providing free appraisals.
You decide.
Are Zillow.com Zestimates appraisals?
The definition of an appraisal:
“An estimate of quantity, quality or value; the process of through which conclusions of property value are obtained; also refers to the report setting forth the process of estimating value.” From my “Fundamentals of Real Estate Appraisal” textbook.
From Zillow.com, their definition of a Zestimate:
The Zestimate™ (pronounced ZEST-ti-met, rhymes with estimate) home valuation is Zillow’s estimated market value, computed using a proprietary formula.
Although Zillow.com says Zestimates are not an appraisal, don’t these two definitions sound sort of similar?? Both use the words “estimate” and “value.”
Does the general public know the difference between an appraisal and a Zestimate?
There is a good discussion of this issue on BiggerPockets. You’ll see my response to the issue of the general public being aware of the difference but here it is anyway:
While real estate professionals understand that a Zestimate is not an appraisal, consumers do not. Not only have clients of mine referred to Zillow to make buying decisions but I just read with horror this past week in my local paper that a taxpayer was suggesting that towns cease hiring appraisers to do property valuations.
Furthermore, the writer suggested residents use Zillow’s Zestimates to fight their town’s property valuations. Obviously, she had not read the site to find that Zillow gets its information from the town and my paper is so clueless that they published it.
My point is that people are not reading the disclaimers, they do not understand how the figures are calculated and they are making important decisions based on this info.
Are Zestimates Illegal in CT?
In CT, you must have a license to issue appraisals and charge for them. According to the state statutes:
“Real estate appraiser” means a person engaged in the business of estimating the value of real property for a fee or other valuable consideration.”
No person shall act as a real estate appraiser…without the appropriate certification…unless exempted by the provisions of sections 20-500 to 20-528.
Exceptions would be:
…any person under contract with a municipality who performs a revaluation of real estate for assessment purposes…any licensed real estate broker or real estate person who estimates the value of real estate as part of a market analysis…
I don’t know if the Zestimates are illegal in CT or elsewhere. But I do know that Zillow.com has an issue with Zestimates at least being perceived as such.
3 comments April 18, 2007
Tracking Zillow’s Zestimates One Property at a Time
I’ve written a few times about Zillow.com and the (in)accuracy of their zestimates. I’ve been tracking one property in particular on a monthly basis and I thought I would share with you my findings. Out of respect for my clients who purchased this house, I will not give you the address but it is a real place and these are real figures.
House Description: 4 bedroom, 2.5 bath, 2200 sf, 2 car garage, colonial on 1 acre, built in 1979, full walk-out basement in Shelton, CT. House was only one of a few available in this highly desirable section of Shelton under $500,000.
List Price: $489,900
Comps: $499,000 and $477,000 – comparable in size, age, location, style and both sold within 3 months of this home
Offer Price: $465,000
Final Sales Price: $470,000
Appraisal Value: $470,000
Sold Date: 1/26/07
According to Zillow’s Zestimate, house was valued as follows (figures are rounded):
November 06: $460,000
December 06: $455,000
January 07: $450,000
February 07: $430,000
So, despite all other indications that the market has not crashed, this particular property dropped $30,000 in value in four months? Puhlease!
Some interesting facts:
- Zillow does not yet have the sales data from this property (sold date 1/26/07) and it’s now 2/16/07 – data is out of date
- Zillow is using comps for condominiums – like comparing apples and oranges, to be cliche
- Zillow is using comps that are miles away from this property even though there are excellent comps within one mile
I’ll let you know what Zillow says the value is when the most recent sales data is figured into this equation.
8 comments February 16, 2007
Let’s Make a Deal – Crafting an Offer in a Buyer’s Market Part 1
Despite the overabundance of houses on the market, sellers are not giving away their largest asset to buyers at “low, low prices.” At least not in my market. As a buyer, you still have to craft your offer in order to catch the eye of the seller and at a minimum, pique their interest enough to begin negotiating with you. Great deals exist in this market but many more can be made with a little work.
Here’s how to make your next home purchase a deal.
Be Prepared. Before you begin looking at houses, be ready to buy. Obtain mortgage pre-approval. Sell your existing house. Have ample deposit money. Be flexible on closing date. No matter the market, you want to stand out from the pack. By doing so, you may be able to get a better deal on a property by offering the seller something of real value other than money – confidence that you’re not likely to back out of the deal.
The Object of Your Affection. How can you negotiate over something when you don’t have all the facts. These are some questions you probably want to know the answers to: What did the sellers pay for the house? How long has it been on the market? Was it ever re-listed under another MLS number? What’s the condition of the property? Recent renovations? Are there sex-offenders living nearby? Is it a high-crime area? How are the schools? Is any development planned in the area? Is a revaluation underway?
Know Your “Enemy”. Sun Tzu wrote that “To know your enemy, you must become your enemy…” While I don’t like to think of sellers as the “enemy,” in any negotiations, you must know the type of person you’re negotiating with and their motivations. When it’s a seller, the first place to look is in the house itself. While walking through the home at showings, look for clues about their life. I don’t suggest that you start snooping through their belongings but do pay attention. A vacant home or a home where the owner has already packed belongings would suggest an urgency to close on the property. (more…)
3 comments December 5, 2006
Zillow for Rentals – New Website for Landlords & Renters Compares Rents
If you’re looking to rent but don’t know what the going rate is in your area or if you own rental property but are not sure how much to charge. Rentometer.com is a new website that may be able to help.
Users type in an address, rent, and some basics about the property (and I do mean basics) and Rentometer.com gives you the average rent for the area of similar apartments. It also shows you where the apartments are whose rent is being compared to the one you entered. There is no charge for this service.
Just for fun, I input the rents I charge for my rentals and the results were about what I expected. I am charging just a little higher than the average for properties in my area.
The website says that they collect data from public sources in print and on the internet. And every time someone enters in the rental rate for a unit in Rentometer.com, the data is collected and saved for future analysis and use by the site. It doesn’t sound very scientific but I don’t know of any website that offers this service for free.
1 comment October 13, 2006
