No, these apps and websites aren't completely worthless, but... 
...they really don't give you accurate information.
READ THIS BEFORE USING ANY OF THESE APPS
More often than not, if you're really curious about your home's market value, you're probably thinking about making a change. Maybe you're family is growing, or maybe you've recently become an 'empty nester'? Maybe you want to refi? Maybe you just want a little peace of mind knowing that this massive investment has been a good one. How do most of us learn our homes "value?" We typically ask Zillow, or RedFin, or some other real estate app, Let me cut to the chase. DON'T. ASk an expert. Ask me, if you're local. Seriously, don't let these data crunching machines steer you away from your dream home...or steer your hopes toward a home that really is only a dream.
Almost all real estate agents are willing to create what we call a CMA; Comparative Market Analysis for a prospective client. It's part of our job. No commitment on your behalf, just make the request. Heck...ask two or three agents. Gather a consensus. Personally, I'm a bit of a 'data geek' and I actually enjoy 'running comps'. Read on to learn just how wrong these apps often are.
I'm asked this question so often: "So, how accurate are those 'Zillow Zestimates?'" From my point of view, Zillow, RedFin, Realtor.Com, etc., are more often the cause of headaches and heartaches than they are a practical solution for buying or selling a home. No, they're not worthless. Go ahead. Wet your appetite with these apps and websites, but when you really need accurate information, not from the past, not as a generalization, not as compared to the rest of the nation...give me a call, or call another agent that you know you can trust. Please don't take the information you get from these apps as "the truth."
Today we've got more tools than ever to "help" the average person interested in buying or selling a home. Zillow is just one of these popular sites that offer many of these tools. Unfortunately, while these tools do provide some level of service (often pulled directly from MLS) the data that is pulled is not in 'real-time'. These sites do a reasonable job getting their users good market information. For me, however, "good" isn't good enough. Tens of millions of dollars worth of transactions occur locally every month. Properties have "Status" changes thousands of times per day. These changes in status must be known in real-time in order for your agent to really keep you in the game.
I'm not picking on Zillow in particularly. They're one of the very best, and I believe that they're absolutely ethical in their practices. That said, let me share why are these 'apps' and websites are such a pain in the butt for Realtors and ultimately for their clients. Below are a few unfortunate circumstances that could have been avoided if so many people didn't depend so heavily on their "Gotta know now" iPhone app.
Example 1:
Client: Hey! That property on Sycamore just came "back on the market."
Me: It did? How did you hear that? They've got multiple backups. I wonder what went wrong?
Client: I got a notification from RedFin
I immediately dropped what I was doing, called my partner and had her start drawing the contract. I then called the listing agent directly. I learned, with my tail now firmly between my legs, that the property was NOT, in fact, back on the market. The property fell out of escrow, went back on the market for 10 seconds in order to switch the status from pending with the 1st buyer to pending with the new buyer.
What happened as a result of this misinformation? My client was SO aggravated. "Why didn't you know this was available as soon as it went back on the market? You should be telling us these things right away...not after it's gone!" The property was never, in fact, back on the market. But I'm still guilty in the eyes of the client. My partner wasted her time and wrote up a contract for a property that wasn't actually back on the market. The listing agent wasted her time having to explain the actual status of the home, through no fault of her own. I looked like a complete chump for even asking about the status. 20 hours later, RedFin finally marked the listing as "Pending". Other than that, it was great! Without his trusty RedFin app, he'd never have received the "Back On Market" notification. Nobody would have wasted any time...and he wouldn't have felt so bad. Although I knew it would void his warranty...I politely asked him to gently place his new iPhone in the toilet so I could get back to work.Client: I just saw this awesome property on the golf course that's for sale for only $271,000! That's crazy! Get on it! Let's write an 'above asking' offer right away! How much should we write for?
Me: I don't see the house on MLS? How did you hear about it?
Client: Yahoo Homes!
Me: What's the address?
Client: ##### Country Club Rd.!
Me: I'm on it!
After looking into why the property wasn't on MLS, and confused as to how my client knew about this listing before me...
Me: So (with my profanity filter on 100%) ##### Country Club Rd. isn't actually for sale. It's what we call a "Distressed Property." The 2nd lender is owed $271,000. The first lender is owed well over $500,000. The property is not for sale. It's being foreclosed on.
Client: (LONG pause)
Me: Hello?
Client: Oh. (Now in an angry tone) Well that's lame! Why did they even show this as "For Sale" then?
Me: ??? uh...??? I don't know. I don't use Yahoo Homes. I only use the actual MLS. So what can I do to ensure that we don't end up disappointed like this again?
Result? Another of my clients is confused, despite my plea that he NOT use any of these sites.
Example 3:
Client: I keep seeing homes pop onto my (fill in the blank) app but I'm not getting any of them from you! That's really aggravating! I'm hardly getting any listings from you directly! They either come to me on my _______ app, or I find them on the internet myself!
Me: Will you please forward me the most recent listings that caught your eye? I'll look into them right away?
Client: Sure.
Me: (90 minutes later) ALL of the listings that you sent me fall into one or more of the following categories
- Permanently or temporarily withdrawn from the market
- Already pending & not looking at backup offers.
- Already sold/closed
- Will not accept an FHA offer.
Client: Well that's aggravating!
Me: I appreciate that. How can I help? What can I do to ensure that we don't end up disappointed like this again?
See the trend?
What about Zillow Zestimates?
Many of these apps pull from public record as well. They'll use a home's "Assessed Value" which is virtually NEVER accurate. They'll take inaccurate data, then average those inaccurate numbers (some too high and some too low) to arrive at what might as well be an arbitrary number. Add to that the most recent selling price (which could have been 8 years ago) and you've got...garbage.
OK. Benefit of the doubt. Maybe that's Google's fault and not Zillows? So I clicked on the paid for Ad at the top of the page and what did I get? The Zillow search yielded the following results: 213 homes for sale.
ACTIVE properties.
YUCAIPA.
145. Period!
Not 300. Not 213. Not 203. 145. We, actually, at the time of this post, have 145 active properties for sale in Yucaipa. Best case, Zillow's numbers were inflated by 40%. Worst case, they're inflated by over 100%.
Another issue is that Zillow (and all of the others) are number crunching machines. They're automated. They just can't "think". They don't see and understand that $150,000 backyard upgrade that completely distorts their "Comp." Realtor.Com doesn't take into consideration the fact that your home as an unobstructed view of the valley the home across the street that just sold for $399,000 has an unobstructed view of the high school basketball court.
I don't know about you, but I can't afford to be off by $40,000 in my estimate on a $375,000 home. Take this one step further into the area of custom and nicely updated & upgraded homes and you can imagine just how wrong these apps can be.
Finally, and most importantly, these apps undermine my personal credibility. Zillow is NOT an expert in my area. I...am. However, when anxious homeowners start digging around for answers...the first answers they find tend to hold quite a bit of credibility. This leaves me having to bust my butt undo what these apps and websites started. I simply want to give clients the truth, but I have to battle the enormity of the entire internet in order to earn my credibility back. "But Zillow said my house is worth $425,000 and you're saying that it's only worth $340,000." This is when Mr. and Mrs. "I know Real Estate 'Cuz I have the Trulia app" start really showing their fangs! Then I have to undo what's already been done. "I appreciate your position. However, the truth is that two of your bedrooms and 800 square feet of living space in your property aren't permitted...and you need a new roof!"
So do any of these apps serve a purpose?
ABSOLUTELY! When you are ready to buy a home they have an excellent platform for looking at properties. The information provided is second to none in my opinion. There is no doubt that tons of folks love their integrated Bing maps that come with every listing. These are super handy when trying to decipher what is around a particular property.
If you're a seller, Zillow gets your properties in front of millions of possible buyers.
If you're a buyer, Zillow shows you what's selling in the areas that you are interested, and for how much!
So what do I want you to take away from this rant? Just this: Go ahead. Use these apps for basic informations and trends. But once you are beyond a point of wanting simple and vague information PLEASE call a reputable local area expert. Here are a few questions to help you find just the right Realtor. If you're in the Yucaipa, Calimesa, Beaumont, and Redlands areas, I'd love the chance to provide you with the highest level of service.
My business thrives by word of mouth. If you appreciate the information provided on my blog, please share this post on your favorite social media sites, and with anyone you feel could use my service.
Until next time.
Andy Blasquez - The Last Realtor You'll Ever Need To Look For
BRE#01826135
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