Hat tip to swm for sending in this article about sellers blaming zestimates for why they can’t fetch their higher price:
http://www.king5.com/story/news/local/2014/11/15/zillowcomplaints/19054089/
The owner of one New York home writes that a low zestimate is “hindering the marketability” of her home.
Zillow said its zestimates are just that, estimates, “not an appraisal” and are within 5% of the sale price just over a third of the time.
Zestimates are calculated using a formula that considers attributes like a home’s size, tax records and recent nearby sales.
Zillow argues a zestimate is also as likely to be high as it is to be low.
“So, that has become a problem because I understand that Zillow has a price, but in reality it’s not that. It’s what the market will bear,” Sievers said. “We will have to bring them back into reality and say, ‘hey, you know, there is a lot of different variations to a house and why a house would be higher or lower.'”
The flipside is also true with high Zillow estimates; seller sees the moon and they aren’t going to give it away. Real comps be damned, Zillow says its worth what I have it listed for…. I ain’t gonna give it away. As laughable as the zestimate is, with the rise of Godzillow you cannot underestimate its impact. Zillow won’t drop it, of course, but perhaps the market would be better served if they at least dropped the specific number, and just left the range up there, which is usually big enough to actually capture the correct number.
Agreed, and today’s buyers are just as likely to use a zestimate to justify their lower offer.
It’s easier to use than an actual comp.
The zestimate for my house in LA is off by close to $1 mill. We did an addition and major improvements that aren’t shown in zillow or even on the satellite maps. If I listed at the zestimate I would have a bidding war riot within 1 hour of listing!!!