One of the bigger threats to real estate sellers (and sometimes buyers), is automated online home valuations by sites like Zillow. Why? I will explain on behalf of my partners and all the other ethical and hard working real estate professionals in the business.
First of all, everyone knows: Don’t believe everything you read on the internet! …and that statement applies to online home valuations as well! And Zillow agrees! They clearly state their “Zestimate” is purely a starting point. They claim their Zestimate “is created by an automated software process, designed by statisticians, and there is no ability for humans to manually alter the Zestimate for a specific property.” More about their Zestimate can be found on their website here: https://www.zillow.com/zestimate/
But this is about their business model which is to generate phone calls to real estate agents paying for advertisements on their site. Yes, that’s right, they are in business to sell ads, not homes.
Ask yourself, what generates more calls to agents paying for ads on their website? Low valuations or high valuations? If their valuations were low, so would the call volume to the agents paying to be one of their “Premier Agents”. If the call volume is low, so will be their ad revenue. If the valuation is high, sellers will call thinking they just made a bunch of money, its time to sell and cash-in!
Their business model does create calls, I agree. But sometimes it is because of misleading data.
As irritating as their site is to the real estate industry, it does create the conversation and helps us real estate professionals prove our worth by providing accurate data. Our opinions include the subjective layers of buyer motivations, turn-on and turn-offs, values associated with improvements or need to make improvements…. and how it affects buyers desire for the home, their offer and the final sale price. That is something Zillow can not do. Zillow has never stepped foot in your home, they have never worked with a buyer or never sold a home. They don’t have to, they sell ads.
Now consider my business model and how low values hurt me in two ways. First, it hurts the value of my personal home and all the other homes I am trying to sell. The more I sell a home for, the more my home is worth and so is the value for the other homes I am trying to sell. Right? Second, how could I win listings or promote great sales statistics if my values were low? I would lose listing appointments to other agents promising a higher sales price while sometimes praying on what is called “wishful pricing” in our business.
It happens a few times a year: “Oh Chris and Traci said its worth XXX,XXX?!?! NOOOO! (shock and awe moment) – List with me, I can sell it for $XX,XXX much more!!!” – This is when a wishful seller takes the bait. This unethical agent provided a high valuation (knowing its high) to gain the listing. They know that it won’t sell at that price and they will push a price reduction after it sits with no offers or let and get leads from the sign in your yard (to sell other homes priced appropriately). If you want to see proof of this activity, I have a list of homes that failed with wishful pricing.
So it’s your choice, have faith in the professionla that has worked with hundreds of buyers selling hundreds of homes in your neighborhood with higher than average sales prices, and ONLY gets paid for doing good business selling homes… OR risk thousands of dollars on the opinion of the internet and/or a website that has NEVER been in your home, or in ANY home, NEVER worked with a buyer, and has NEVER sold a home…. and is only in business to generate calls to their advertising agents.
I am the one to sell your home for as much as I can. I am not going to pitch you wishful pricing so I can stick my sign in your yard and let you get beat you up on price later. I have accurate data, solid facts, and stats to prove it. I have already invested years into evaluating and selling homes in your neighborhood and area. I’m on a team with the best results year after year with the highest average sales prices. We work hard, sell lots of homes and am proud of our stats, knowledge, expertise, and top of market results!
It’s our opinion that Zillow does not come close to our experience, knowledge, advice, or valuations… and it’s everyone’s opinion: Don’t believe everything you see or read on the internet! Especially Zillow!!!
This content is not the product of the National Association of REALTORS®, and may not reflect NAR's viewpoint or position on these topics and NAR does not verify the accuracy of the content.