As I mentioned in my last post in this series about the illusions of real estate sites like zillow.com,  trulia.com, and realtor.com, websites like these do not have as many search description fields compared to the extensive search capabilities of our MLS.

               First, let’s talk about how buyers are affected

In MLS, a property could be ‘active’, ‘UBC’ (excepting backup offers), ‘pending’, ‘closed’, ‘expired’, ‘canceled’. The three websites mentioned previously, only show ‘active’, ‘pending’, or ‘closed’. To show how significant it is to be missing something like the indication of UBC, this typically indicates that the property is accepting back up offers on a short sale, which means you might inquire about  seeing the home.

Another great example is with the Multi-Listing Service, which has a time of more descriptions about what is in the property: for example, is a block construction or wood construction, does the home have any energy efficiency features, and if so, which ones?

               How sellers are affected

If you’re a buyer and you look Zillow.com to see what an estimate is of the value of your home, you won’t find an actual “estimate”, but in fact a word like “Zestimate”. This could be that they can’t call what they do an actual “estimate” legally, just like “Froot Loops” can’t say they have fruit in them.  Functionally, they just don’t have access to the MLS data the way we do and so their estimates of home prices must be constructed from other, less accurate sources. 

For instance, if you go to the County Assessor and see what they estimate as the assessed value of your home, that is not the same as the estimated price or market value. Their assessed valuation, in fact, is designed to be way off of what the market actually is. They are prevented by law from increasing their estimate of your home value too fast so that your taxes (which are based on that value) are not raised too quickly. So a lot of where these websites are getting their estimates of your home is informed largely by, if not based on, the local County Assessor’s office.

In fact, there is a page on the Zillow.com website that describes their estimates and actually says,

“[Our estimate] is not an appraisal”

“Our data sources may be incomplete or incorrect; also, we have not physically inspected a specific home.”

I’d give you the link, but there’s a lot of hobly-gobly-now-you-see-the-truth-now-you-don’t nonsense in the writing that’s hypnotic and designed to get you to ignore the man behind the curtain who’s actually short, timid, and uncertain of much of anything. Need more proof? Check out their ‘Data Coverage and Zestimate Accuracy Table’, where you’ll learn that 86.4% of their Zestimates in the Phoenix area are as much as 20% off the actual sales price.

Let me say that again: 86.4% of their Zestimates in the Phoenix area are as much as 20% off the actual sales price.

This is one of the reasons you want to use a professional agent with access to the MLS. Well, like ME for instance!

If you want to buy or sell, and care about how you are affected as a seller or buyer, please give me a call at 602-456-9388 or email me at ken@getyourphx.com.