Kim and I are often asked….
“Hey, we saw this house on Trulia last week, but it’s not in the Client Gateway that you set up for us. Why not?”
“Why isn’t the “Zestimate” for my house the same as what we can sell it for?”
“I just closed on my house last week – why is it still FOR SALE on Zillow?”
Here are our collective (One South Realty Group) thoughts to help you understand dependency upon sites such as these.
Are Trulia and Zillow the right tool to be using?
Zillow and Trulia are pretty amazing sights with amazing amounts of information. The depth of available information and the other resources placed a simple click away are astounding. Technologically speaking, they are a masterpiece, but from an accuracy standpoint, they are right about things far less than they should be or would lead you to believe. What is truly unfortunate is that they do not waive a flag and tell you, ‘oops, we are wrong on this one’ or ‘we are not really sure on this one.’ Their algorithm provides a guess (Zestimate) on every address it is aware of but fails to offer any confidence interval around the value.
The public needs to know that Zillow and Trulia are simply tools. They are tools just in the same way that MLS is a tool, public records are a tool, Yelp and Active Rain are tools and online tax records are tools. When used as they should be, they work well. When a tool is asked to do something it cannot, it falls short.
Here are the three major issues with Trulia, Zillow and other public search portals.
Issue One // Inconsistent Information
By their own admission, Trulia and Zillow know they are wrong a large portion of the time. The screen shot (below) of 10605 Tuckerman Court in Mechanicsville is off by about 1,000 SF and 2 full baths. We know this as broker of record for the home. The ‘Zestimate’ (Zillow’s estimated value) is off by a factor of roughly 20%. A buyer or seller may base a large part of their strategy on their strategy on flawed information. Additionally, Zillow and Trulia both generally accept that only 90% of actual values will fall within 10% of the estimate.
Issue Two // Time Lag
If you use Zillow or Trulia as your primary source of information on new listings, you will miss. The property below has already experienced a price REDUCTION but is yet to appear on Zillow. Those that understand the inventory crisis also understand the need for immediacy in their information. 48+ hours or more in delay means loss of opportunity.
Issue Three // Featured Agents
The Agents that Zillow and Trulia ‘select’ for you to see all paid Trulia and Zillow to be displayed there. In effect, the right to be displayed in a given zip code code is ‘purchased’ by the agent without any regard to their skill set or local knowledge. It is also important to note that Zillow makes no distinction between asset types (condos, new homes, land or multi-family.) For a site whose model is based on providing the public with information, they spend no effort whatsoever in making sure the recommendations they make are in the public good by basing recommendations on ability and/or applicability.
Zillow and Trulia have their place within the home buying process but they are not a substitute for it. Use these tools as a part of the home buying or selling process but don’t rely solely on the information they provide. Zillow and Trulia can help, but only to a point. Understanding what they do well and what they do poorly will make you a better consumer.