Sellers beware.. You could be digging your own ditch..

I was trying to stay away from reporting or voicing my opinion about new Zillow feature that the founders and creators announced yesterday.  I played around with the site and tried to find some dirt.  I checked out other states that have been posting (Arizona and Seattle seem to be posting like crazy).  But here in my neck of the woods, Queens NY -11357, 11358, 11354, 11361, 11364 and 11356 - I could only find one new listing in Zillows new "Real Estate Wiki" tool. 

After a full 24 hours and every feed-reader spewing out the hot news, I can't say that there is an overwhelming amount of posting going on here in NY.  Maybe us East Coasters are not paying enough attention to the under/over Zillow?  Or perhaps the Zestimates are just so way off that an owner knows posting a listing either from an agent or a FSBO could break a sale. 

I did however, find one listing that was posted by an owner in College Point, 11356.  Here is what I found, his asking price was MUCH HIGHER ($649,000 with the owners Zestimate being $726,553) vs. the Zestimate (Zestimate came in at a low $548,318).  In my book a $100,000 difference and this could hurt/destroy/blow up his possible sale. 

To give you the facts, right out of the owners "mouth" about the home he is selling:  this home is a three bedroom, two and a half baths, on a 1900 sq. ft. lot (semi-attached).  The home was built in 1965, but completely remodeled in 2005.  The owner stated that the renovations cost over $92,000.  The original Zestimate gave a price of $561,451.00 - now with the owners renovation costs added into the price the new Zestimate shoots up to $726,553.   The list of renovations are:

Major Kitchen Remodel (Mid-range)	+	$	16,167
Bathroom Remodel (Mid-range)	+	$	15,660
Bathroom Remodel (Mid-range)	+	$	2,897
Minor Kitchen Remodel	+	$	2,017
Basement Remodel	+	$	1,640
Roofing Replacement (Mid-range)	+	$	4,152
Siding Replacement (Upscale)	+	$	17,809
Window Replacement (Mid-range)	+	$	7,006

While I don't think that Zillow is trying to replace any Real Estate Agents, I do think that Zillow has more tricks up their sleeves, but I still stand behind my saying that the difference of asking price and the Zestimates are so far off that it can not be used a viable tool by either a Real Estate Agent nor a home owner selling on their own.   

So as a real estate agent - I am not against Zillow launching a new Real Estate Wiki - but I myself, can only see false hopes quickly becoming shattered dreams. 

Oh, and by the way - the owner stated that he will work with a BUYER agent - sooo (shameless plug here)  If you want me to ...... never mind!

Comments

[Jonathan Dalton]

What don't we blog about out here in Arizona?

You're right, Christine ... it didn't take long for agents out here to start adding some of their listings to Zillow. Is there a risk? Perhaps if the estimate on Zillow is below the asking price. But these are being added on the theory that any exposure helps.

On some of my listings I'm taking Ardell's advice and not adding until I've spoken to the seller ... it's going to be hard to try and explain why Zillow's estimate doesn't really represent market value in the minds of some buyers, and the questions will be inevitable if the values are off.

For my active single-family listings, only one of Zillow's estimates is severely off. But we're also in a market where very few upgrades result in higher sales prices and market averages tend to dominate.

[Christine]

I do agree that all exposure helps. I am 1000% on board with that theory, and I am not saying that I will never not post a listing on Zillow, I will just be very selective and very careful, especially in todays market when buyers constantly tell me that it is a buyers market and then low ball offers. How do I explain to the "buyers" that the Zestimate is the price that is off - not mine? As for a for sale by owner - I would severly warn off the Zillow posting for right now, For the simple fact that a buyer who is looking for a FSBO is already deducting a 4-6% real estate commission off of their offer - and now if a fsbo has a home on the site like the seller I mentioned - the buyers will deduct the RE fee, AND go in LOWER than the Zestimate price - so its a huge difference and I feel that the seller on this home - created and jumped into a bad situation. He created it and now he wont be able to change it. So, exposure is good - but in theory - make sure that you are not getting bad exposure that you can not change!

[bill]

The Zillow zestimates for some inner city properties are more than inaccurate. As an example the property at 2653 S. Hoover St. in the 90007 zip code north of USC is zillowed at $903,604 - thoroughly rehabbed some time back - probably close to 2 million would be more accurate. House across the st. at around one million zillow is probably a $1,600,000 place. Zillow founders need a prayer breakfast with Reverend Jackson and plead forgiveness.

[Christine]

Bill - I agree. But according to alot of people out in the world - they feel that any owner who takes this as a serious matter - plays with imaginary people and showers with hairdryers. They feel that Zillow is a toy and should not be taken serious and home buyers/sellers should just treat it as such. But now - throw the wrench back in the fan - NOW - you have FSBOs and Agents placing their ads on Zillow with thier price and the Zestimates. So, my next question is - who's price do you go by? I know when I go shopping - I take the lower price. No? Forgivness at this point is mute!