The Mystery of the Zestimate
Those “mysterious” estimates of home values are often incorrect. And outdated listings leave buyers frustrated when homes they thought were available are actually sold. They can leave sellers angry when price reductions aren’t reported quickly, the Post story said.
The story is significant because finally, the consumer press is recognizing what brokerages have known for years. The Zestimate can be wildly inaccurate, thus confusing consumers more than helping them. Zillow lacks reliability because it cannot take into account any form of property renovations, condition of properties and upgrades such as landscaping, roofing, new appliances, etc.
A study by University of Texas at San Antonio found that 40 percent of Zillow’s “Zestimates” were overvalued by 10 percent compared to the actual sales prices.
Listing aggregators, in their quest to sell advertising, leave potential buyers baffled about who the listing agent is. But a non-listing agent doesn’t have the same financial incentives to help a seller. Meanwhile, buyers are unknowingly dragged into a fight for business by agents who know little or nothing about the property they asked about.
All this isn’t good for consumers or brokers. As VHT CEO Alex Zoghlin noted in a recent white paper, Friend or Foe?: The Battle with 3rd Party Aggregators, it’s just a play for more revenue by the fast-growing aggregators.