Zillow - is it accurate?

Using Zillow as your Bible?

I was out to dinner with some friends this evening, and they brought up the topic of “Zillow”.  They felt that Zillow was a great tool and I am not one to argue that.  BUT, I wanted to really test how accurate it was.  I wanted to see if I was on that mark or they were way off.  I have always prided myself with the knack for setting the right listing price.  I always felt that that was my forte’, so, let’s put Zillow to the test.

Home #1 – Asking $1.250,000.00  -   Sold $1.170,00.00 - Zillow Estimate $1.180,519.00  Not too bad. 

Home #2 – Asking $625,000.00  - Sold $620,000.00 - Zillow Estimate $584,670.00 – WHOA!!  That seller did well with me.

Home #3 – Asking $715,000.00 – Sold $712,000.00 – Zillow Estimate $813,171.00 -

OUCH!  ( I have to make a note that this would have in NO WAY sold for the Zillow Price, although a nice house NO house in that area has sold for that much). 

One last one –

Home #4 – Asking 515,000.00 – Sold $515,000.00 – Zillow Estimate $542,904.00 Again, there would be no way that any home this style or in this area could go for more than we sold it for.  We are the only realtors in that area that got as much as we did – we would not be able to “comp” out the homes for much more than this.  That is where we could run into problems. 

Bringing me to my point, Any seller can ask ANY price for their home, but how do you justify this to the bank.  There has to be some cut off point where a bank would say “no way can we mortgage this home for you, the sales price is out of line with the other homes that have sold in this area, with the same style home, same property size and the condition that it is in, Mr. and Mrs. Buyer we are sorry but you either have to come up with more money to offset what we feel we can loan you for this home or the Seller has to lower their sales price for you” 

With the amount of homes that are on the market today – it is more important to set the right price from the very start.