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Zillowed!

This past week I was contacted by a friend/client to whom I had helped buy a house several years ago. He was interested in selling and wanted to know how much his home was worth in today’s market. It had been awhile since I visited his home, so I asked the standard questions such as what improvements he had made to the home, maintenance issues, etc. I then proceeded to do a CMA (Comparative Market Analysis) to determine a ballpark valuation.

When I gave him my results, he was a bit disappointed to say the least. He then proceeded to scour the web for his own comparables and sent me a long email with a list of addresses, sales dates, and Zesstimates from Zillow.com from which he used to create his own list price. That’s when the real fun began!

He mistook the Zesstimates as “actual” sales prices instead of what they really are, which are estimates of value based on tax data and other area factors. So, a home he thought had sold for $681,000 in reality had only sold for $635,000. In another example, he compared the $/sqft of his home with homes on Zillow only to later find out that the data on those homes listed on Zillow.com was off by several hundred square feet, which gave him erroneous results.

What’s my point in highlighting this situation? My client isn’t to blame for his assumptions (however wrong they were). He saw something on a website that he believed to be correct and relied on the data. Unfortunately, it is hard for the average consumer to know what is accurate and what isn’t. There is so much incorrect information available on the internet that even a very smart person (which he is) can be easily confused. Zillow.com, like other data analysis sites on the internet do the best they can to provide reliable information, but their computer modeling is only a small part of the equation when it comes to selling real estate.

My client then jokingly suggested that in order to “earn my commission”, I should be able to sell his home for what he thinks it is worth, not what I told him it is worth. My response was that I earn my commission by providing accurate and reliable data (and subsequent analysis) to my clients so that they can make educated and informed decisions instead of relying on Zesstimates.

What are your thoughts?

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