Zillow.com. The new 6000 pound real estate gorilla in the room? Probably not.
While admitted kind of fun entering the addresses for each of our properties to see what Zillow thought they were worth, the results were staggeringly random. Three were at least in the ballpark (but way outside the foul line), but one property was off by a factor of two.
Zillow uses the tax record to compile a lot of their valuation and at least in our market, the tax records are far from accurate. According to Zillow, my parents house was built 40 years after it really was. Nor can Zillow tell the condition of the house. No computer algorithm is going to get that right. Sure, you can tweak these things in Zillow but it doesn’t really mean much if you are forcing your own home value.
Also, it is not entirely clear where they are getting their market data from. They claim:
For Portland, the appreciation rate was 24% in 2005 vs. 13% in 2004.
Cool fact but wildly inaccurate according to RMLS. They put 2005 appreciation at 16.1%.
From our VP/CIO comparing Zillow to our Property Investment Profile:
The site operates on an unknown and unproven real estate valuation system. It’s based on property tax records which, depending on the district or county, traditionally take 2-6 months to record sales activity for public access.
Tax records are notoriously wrong. Wrong number of bedrooms, sq. footage, lot size, and even missing lot price (structural value only). Style of home and upgraded amenities are ignored. Property views and location are not factored. All of which greatly impact pricing. A qualified Realtor or Appraiser will safely help to qualify all of these factors to provide a market valuation.
Zillow provides comparables for sold properties only.
Zillow.com is run by technology professionals. They are not real estate professionals.
Zillow.com’s entry into the market presents a perfect opportunity to highlight Prudential Northwest Properties’ Property Investment Profiles, which offers a similar but more accurate service to our clients and prospective customers.
Property Investment Profiles (PIP)
Information provided on a PIP is often “same day sales activity out to 2 months.” It is a much more accurate depiction of today’s “real” values.
A PIP includes ALL real estate sales activity (all statuses), not just sold data.
Sold: properties that have sold in your area in the past 1-60 days
For Sale / Active: when selling a home, this is your competition and an important pricing factor.
Pending Sale: shows very current sales “activity.” Are there Buyers out there for your price???
Expired/Withdrawn/Cancelled: indicative of many factors including over pricing of the property.
Time on Market / Days on Market: key to proper pricing and making qualified purchasing decisions in the negotiation.
We can also track for sale by owners when entered into the MLS as Sold – Did Not List.
Prudential Northwest Properties’ PIPs are prepared by knowledgeable local market real estate professionals
So for now, you can take the professionalism out of real estate but why would you?