Is Zillow Accurate?

Buyers and renters have more and more resources available to them now than any time in the history of real estate. There are apps for the smart phone and tablet that help users search for homes, estimate mortgages and taxes, and even point out hot spots in the neighborhood. There are YouTube videos, blogs, forums and countless websites with a plethora of information. In Houston, Texas, I have noticed that many of my clients prefer the user friendly interface of Zillow and Trulia over our local multiple listing service (MLS), HAR. Sure, I get it! It looks pretty and is incredibly easy to navigate, but on more than one occasion, I’ve found myself in the uncomfortable position of explaining to a client that a home simply isn’t on the market, or is actually listed for more. I find myself wondering is Zillow accurate?

Let’s start with a basic lesson on how information is shared. In many states, the sold price of  a home is public record, and automatically available to 3rd party sites such as Zillow and Trulia. However, in Texas, things are different. Texas is a non-disclosure state; so, the sold price of a home is kept private and not public record. This information isn’t automatically available to 3rd party sites. If a home is sold using a REALTOR®, the sold price is entered into the MLS where it is locked up and guarded. The sold price of a home is only shared to 3rd party sites (or the tax assessors office, even) if the new owner chooses to do so.  Sold prices are critical in determining what a home currently on the market is worth, and only REALTORS® have access to this information through the MLS.

So, if only REALTORS® have access to sold prices, which are used to determine the value of a home currently on the market, how can Zillow generate a “Zestimate”? Let’s think about this. If Zillow doesn’t have access to sold prices, the only public information available is tax assessment value. The Zillow algorithm is using tax assessment value to calculate a market value of a home currently on the market. Considering most homeowners contest their tax value and fight to have the value as low as possible, that isn’t the best representation of the market value of a home. Well, Zillow does the best they can and according to their site, the Zestimate accuracy in Harris County is less than fair. Wow, less than fair.

Zestimates are not the only area where Zillow and other 3rd party sites prove to be an inadequate resource for buyers and renters in Houston, Texas. Just the other day, I listed a 2 bedroom, 2 and a half bathroom townhouse for lease on HAR at $196, accidentally. (Yes, even REALTORS® make mistakes – we’re humans!) Within an hour, through syndication, this listing was on Zillow and my phone was ringing like crazy. I immediately went to Zillow to correct the issue, but was forced to make the correction at it’s origination, HAR. A few clicks here and there, and I was able to update the price to $1962 on HAR, and it updated for users in real time, too. However, 20 hours later, I was still receiving phone calls about a magical townhouse for only $196. Zillow still hadn’t received the price update nearly a day later! This same problem can occur when a homes sells or is leased – it can take Zillow days to update and show the home as no longer available.

About a year ago, I received an email from a client that had found a 3 bedroom house in River Oaks to lease for under $1000 monthly. If you know anything about the country club socialite neighborhood of River Oaks, you should be shocked! She sent me the link to the 3rd party site, and I did some investigative work. I immediately logged into HAR and searched for the address. It came up! Unfortunately, it wasn’t on the market for lease at $1000; it was for sale at $1.2M. Even $1.2M is a great deal for a 3 bedroom house in River Oaks, but not quite as amazing as the $1000 rental advertised on a 3rd party site.

It is unfortunate that Zillow and similar 3rd party sites provide such inaccurate information, especially considering the user friendly aspect of their site and app, plus the use helpful tools like mortgage calculators. If you are shopping for a new home to buy or rent, HAR.com is your best resource. REALTORS® are required to input correct information and update status and rates quickly. Since HAR is the original source, there isn’t a delay with the information you see. The website has great features that allow you to search by drive time, neighborhood, and home size, and the mobile app allows you to bookmark homes, request a showing or estimate your mortgage. The best feature by far is that data is accurate and updates in real time!

Are you ready to buy, sell or lease a home? Ask me how to get the most from HAR!