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In the trenches with Zillow.com: A working Realtor’s first-hand experience listing a home . . .

Zillow has had Greg’s attention for a long time, going back to an Odysseus post from last February, when we were blogging for our own entertainment. Greg has debunked Zillow, he’s defended Zillow, but till this week I’ve been indifferent. Zillow has held as much relevance for me as Ragnarok Online. Both have inspired a lot of buzz among their audiences, but neither made my life better, easier, happier, so I’ve not wasted time on them.

But this past Monday, when David Gibbons told us about Zillow’s plans to add the For Sale and Make Me Move tools to their comprehensive database, he gave me a reason to care. When someone hires me to sell her house, one of my jobs is to let as many prospective buyers as possible know that this house is for sale. Zillow will help me find an audience that I might not already be getting through buyers’ brokers, drive-bys, Realtor.com, open houses… So now Zillow has made my life better, easier, happier, by giving me a tool to bring my client’s house to more potential buyers.

To get to know this new tool, I claimed our own house on My Zillow. Here I got to experience first hand the problem with using Zillow for an accurate estimation of a house’s value. We live on a wonderfully eclectic street of ranch, bi-level and split-level 1960′s houses in the North Central Phoenix subdivision, Terry Terrace. Lots are all around 8000 square feet, but the houses range between 1400 to 2850 square feet. At 1993 square feet, ours is about average. The people who remodeled the house before we bought it did some wonderful things — enclosing the carport to make a 2-car garage and landscaping were minor compared to the the major improvement of raising the ceiling and removing the labyrinth of walls common in 1962, to open up the living area side of the house into two huge, very livable and very workable rooms. Then they added requisite granite, 18″ tile, designer cabinets and upgraded appliances. And, since we’ve moved in we’ve upgraded the bathrooms and all the light fixtures. Zillow doesn’t know any of this, of course, unless I tell them. Smaller houses, more unfashionable homes on our street are listed right now at between $429,000 to $510,000. We’re in process of refinancing just now, to retire an ARM, so Greg ran comps on our house. They range from $438,500 to $480,000, so we conservatively estimated it for the lender at $438,000. Imagine my surprise to learn the Zestimate on our house is only $376,637! The Value Range they assigned is $331,441 to $421,833. The good news is that once I fed Zillow with the corrected information on our house, The Owner’s Estimate went up to $464,067. Then, compare this to the professional appraisal of $503,000 that came in just today!

Whew… did you catch all those wildly divergent numbers to describe one fairly average house? Galen Ward wrote on Rain City yesterday about why he thinks Zillow isn’t taking API feeds from Real Estate brokers. But here’s what I think the problem is — reconciling the list price with the Zillow price. I told David Gibbons that this was going to be a problem for me. So yesterday, when I inaugurated Zillow with my first listing it took me longer than I would have liked. Before I could enter the listing, the house’s owner and I had to fix the estimate.

One thing that I learned by claiming my own house and helping my seller claim and correct his is that the comps that Zillow uses are less reliable than even the tax comps. My seller had no problem going through the first three steps of Zillow’s five step “My Estimator”.

In Step 1 the home owner edits the home’s facts. On my own house, here is where I showed the number of bedrooms we have and the year the house was updated… information missing from the Zestimate. On my seller’s home, this step resulted in his house being valued $17,926 more than the Zestimate.

At Step 2 the home owner enters recent home improvements and their costs. Here’s where I described the “Upscale” kitchen remodel in my own house. The recent upgrades my seller made in his house improved the Zestimate by $10,020.

Step 3 lets the owner add other features he thinks are important for calculating the value his house. Here is where I told Zillow that the ceilings had been raised and walls removed to update my home. This step improved my seller’s Zestimate by $5,000.

Step 4, I believe, is going to be the most difficult step for people who are not in the real estate profession to complete on their own. This is where the home’s owner needs to select the neighborhood houses that are most comparable to his own. Here’s where I had to help my seller, and here’s where I’ve found Zillow to be really out there in left field. I live in a very non-hemogenous part of Phoenix. From my front door, I can easily walk either to a really rough area of town or into a neighborhood of million dollar homes. While the Zestimate didn’t take the million-dollar homes in account, it definitely did include houses from the more depressed area in it’s Comps. In the case of my client’s house, Zillow compares his 1608 square foot, 2.5 bathroom home to condos that have less than 1,000 square feet! Once I fixed the comps, we added $5,366 to the Zestimate.

Then Step 5 is a simple Save.

When we corrected the Zestimate, the value given as “My Estimate” went from $233,443 to $271,755. This is good, because we’re listed at $270,000!

Adding the listing itself was easy… as easy as putting the listing onto Craig’s List or eBay. But this is better than Craig’s list, because now that the information is entered I don’t have to enter it again, I just need to verify that the house is still for sale as long as it is. And this is better than eBay because it’s free! :)

One more neat trick I found upon listing the house for sale: You know how GoogleEarth or MapQuest or any of the other mapping sites that overlay the address on top of a satellite aerial never quite match up the address to the picture of the structure? David Gibbons explains how Zillow matches the addresses to the picture of the house, and why these might not be perfectly aligned. What is really cool is when you list a house for sale, you can use your mouse to drag the little icon representing your house to the actual location that you’re able to visually locate on the aerial view. I would love it if Zillow used these adjustments to create better accuracy in the Geocoding, and then let my GPS provider use that data to give me better directions when it’s talking me to a house.

There has been a lot of speculation about the long-term implications of Zillow. As usual, I’m interested only to the extent that Zillow makes my life better, easier, happier. Although I still have strong objections to the idea of putting one of my listings on Zillow.com if my list price is higher than the Zestimate, I’m game at working toward fixing the Zestimate. And as long as I can demonstrate why the Zestimate is wrong, and the Zillow listing introduces more potential buyers to the home my clients are selling, I’m all for it.

BloodhoundBlog’s team coverage of the Zillow.com upgrades:

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  • 9 comments

    9 Comments so far

    1. Doug Quance December 8th, 2006 7:41 pm

      Thanks for the writeup, Cathleen.

      Answers a few questions I had, for sure. :)

    2. Dave Barnes December 8th, 2006 9:27 pm

      Cathleen,

      I did not read your entire post.
      But, you did convince me to surf to Zillow and “claim” my house.
      I set a “sell” price of 1.6M$ which is 2x the appraised value. If someone is stupid enough to offer that, then we are out of here.

      ,dave

    3. jf.sellsius December 8th, 2006 10:50 pm

      I quite agree that having an inaccurate zestimate, perhaps grossly inaccurate, sitting next to my list price is troublesome. As an owner, or agent, I want the option to remove or hide it. I want control over my listing, at least enough control to say “I dont want your inaccurate zestimate to influence my buyer in any way”. And I would not want David G. holding a zestimate sign in front of my lawn sign either. It’s not a point to be philosophically dissected. It is, as this post illustrates, a matter of seeing reality.

      Transparency does not justify a faulty zestimate sitting next to my list price. Beware of anyone who throws this buzzword around to justify the publication of misleading information.

      Something about this rubs me the wrong way. Is it biting the hand that feeds you? My listing helps you zillow, so why not help me sell without throwing up an obstacle. How do you explain this to your client?

      Who can argue persuasively that an inaccurate zestimate has absolutley no adverse effect or interfere with the transaction? Obstacles don’t make for efficiency. An inaccurate zestimate is an obstacle. Buyers may pass over your listing rather than stop to consider why there is a discrepancy. If buyers perceive zestimates to be at all reliable by virtue of Zillow’s much publicized median error rate of 7.5%, many will.

      Thanks Cathleen for a dose of reality. Since you may have David’s ear, tell him to open his eyes to it.

    4. [...] Cathleen Collins at BloodHound writes a very in depth post, “In the trenches with Zillow.com: A working Realtor’s first-hand experience listing a home . . .“ [...]

    5. Kris Berg December 9th, 2006 8:44 am

      The Zestimate issues concerns me as well. I have been talking about my problems getting my listings uploaded. My test listing, ironically, has a list price (justifiably) over $100,000 higher than the Zestimate, so I wouldn’t have really pushed the “publish” button on that one any time soon. I think I have isolated my problem to something I am doing at the photo upload stage. Cathleen, how many photos are you loading and what are your file sizes? I’ll be going back this weekend to give it another try. Maybe my own overexuberance in loading too many photos too quickly is my downfall. David, if you are out there, feel free to chime in.

    6. Cathleen Collins December 9th, 2006 10:05 am

      To Kris’ question

      Cathleen, how many photos are you loading and what are your file sizes? I’ll be going back this weekend to give it another try. Maybe my own overexuberance in loading too many photos too quickly is my downfall.

      I made this consistent with the listing process I already use.

      When I take a listing I create a folder on our server. This folder will contain a lot of data, including all the photos that I take of that house. In all cases I only use 640×480 photos. Anything larger is too much for the websites. The twelve best photos get copied into the house’s 12 eBay Photos folder. The best six of those are copied into the 6 Listing Photos folder for the MLS. And the four of these that tell the story best get copied into the house’s 4 Craigs List Photos folder. The 12/6/4 limits are all set in the structure of those entities, and sometimes I have to stretch to find twelve worthy of eBay. But I want to be sure I include as many as the limit allows, in case quantity matters to a prospective buyer’s filter.

      I’ve decided that with Zillow I’ll load all of the photos from one of these three folders. Which folder depends on the house. If Zillow listings had been available when we listed this amazing 1931 Cotswold Cottage, the 12-photo folder plus the website would have told the story. For a simple Navaho-white little vacant condo, four interesting photos is pushing it, so I’ll use the Craigs List folder of pictures and jazz it up with the home’s website. I expect that since Zillow isn’t giving us a limit, prospective buyers won’t be as concerned with filtering out any listing that hasn’t included the maximum allowed. My own buyers have told me that they dismiss listings off hand that don’t include the maximum photos allowed because they think something is being hidden. When there’s not a set maximum, I expect prospective buyers will appreciate brevity — especially if a website or virtual tour are available for in-depth research.

    7. CarolK December 9th, 2006 10:47 am

      Cathleen – thanks for the posting – a really useful article just at the time when I need it! Cheers

    8. CarolK December 9th, 2006 10:49 am

      Forgot to say – you can list for free as well on http://www.addmyproperty.com

    9. Thomas Johnson May 21st, 2007 9:52 pm

      Who said we just plant a sign and collect money?