Navigating the real estate market can be daunting whether you're buying your first home or preparing to sell your fifth. Amidst the multitude of available tools and platforms, Zillow remains a key player in the quest for the perfect home. Yet, for all its user-friendly design and tantalizing listings, the question remains—how reliable is Zillow for the average consumer?
How Accurate is the Zestimate?
One of the most well-known aspects of Zillow is the Zestimate—an algorithm that provides an estimate of a home's worth. For many, the Zestimate is the initial benchmark for home value. However, its accuracy has been the subject of numerous debates.
By Zillow's own admission, the Zestimate has a median error rate of 7.49% for off-market homes. To put that into context, the median error rate on a $500,000 home would be nearly $38,000!
This means sellers who rely on the Zestimate to price their home could be setting themselves up for heartbreak—not only could they lose tens of thousands due to underpricing, but overpricing by the same amount can torpedo their chances at selling.
Once a home is listed on Zillow, the Zestimate often changes—at this point, Zillow claims the median error rate falls to 2.4%. This makes sense considering they now have the list price to take into consideration!
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What is a Zillow Premier Agent?
A Zillow Premier Agent is a real estate professional who pays Zillow for leads and features—NOT an employee of Zillow. They can work for any brokerage, have any amount of experience, be a part-time agent, etc.
The common thread between all Zillow Premier Agents is that they pay for leads. When you request information about a property, multiple premier agents are alerted and given your contact info. Since these agents know they are not the only ones who were sent your info, they will reach out quickly (and frequently) to try to win your business. This process often leaves buyers wondering: is Zillow trustworthy?
A Zillow Premier Agent reaching out to you doesn't mean they're the best agent for the job—it only means that they've paid Zillow for your information. These agents may or may not have further information on the house you inquired about or the area it's in. With this in mind, it's best to do your research and find an agent that you trust. You can still use Zillow to peruse listings, and then reach out to your agent instead of submitting your information.
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What Do Zillow Statuses Mean?
The vast majority of homes and properties have at least some information on Zillow, regardless of if they're for sale or not. While some statuses may seem self-explanatory, savvy buyers and sellers can read further into certain statuses to give themselves a leg up.
Common Zillow Listing Statuses:
- Coming Soon: A property listing that is not yet available for showings. This is a common pre-market tactic that can create buzz and collect potential buyers before the property formally hits the market.
- Tip: reach out to your agent to find out when a "coming soon" listing will be available
- For Sale or Rent: Self-explanatory, these listings are currently available to purchase or lease (provided the listing agent has kept the listing updated).
- Pending: The property has an executed contract, and a sale is pending.
- Off Market: The listing has been removed from active market availability. This could be due to a variety of reasons—for example, the seller may have changed their mind or the home wasn't listed for sale in the first place.
- Tip: if a home switches from "active" to "off market", there is still a chance the seller will consider offers. Your agent can reach out to the listing agent for more information.
- Other Statuses: Additionally, Zillow may feature uncommon statuses like 'Foreclosure' that indicate a specific category of listings. Since many of these listings are not as cut-and-dry as traditional sales, it's always wise to consult with a real estate professional.
What are the Pros of Zillow?
Zillow's greatest strengths lay in its ease of access and its vast database of properties. It's a tool that anyone can access and provides information in a digestible way.
Why Zillow is Useful:
- Accessible one-stop shop: Home buyers and sellers can access data on current listings and off-market homes, such as recent sales, tax info, and school data.
- Pulls from the MLS: The MLS is the system that real estate agents use to list and find properties. By pulling from the MLS, Zillow is taking information directly from the listing agent for maximum accuracy.
- Diverse information: In addition to the standard home sale list, Zillow hosts data for rental properties, foreclosures, and off-market opportunities, giving users the ability to explore various housing options.
What are the Cons of Zillow?
Despite its appeal and reach, Zillow is not infallible. The platform has its flaws and limitations that savvy consumers should be aware of before making any major real estate moves.
Where Zillow Struggles:
- Delayed data syncing: Listings on Zillow may not update in real time, leading to potential disappointment when a user discovers a property they're interested in isn't available. This is also a concern in very hot markets—some homes may have already accepted offers before even making it to Zillow.
- Inaccurate Zestimates: We've touched on the Zestimate's accuracy, but it bears repeating that this digital assessment is not a replacement for professional appraisal or market analysis.
- No substitute for expert advice: The most significant limitation of Zillow is its inability to replicate the insights and human touch that seasoned real estate professionals bring to the table.
What is the Best Way to Utilize Zillow?
Zillow is an influential platform that has changed the way many people approach the real estate market. By understanding its nuances and limitations, consumers can use this tool effectively as part of a larger strategy. In the end, the human element remains indispensable in the realm of real estate—and Zillow, influential as it may be, is no exception.
- A starting point: Zillow is a good tool to kick off your home search or selling process, but it should not be the sole resource you rely upon.
- Use with caution: Always approach Zillow listings and estimates with a healthy dose of skepticism and the understanding that further insight is crucial.
- Integrating professional guidance: Work with a real estate agent who can help you interpret Zillow data, understand local market nuances, and guide you through negotiations and transactions.
