So, when was the last time you walked into a listing appointment and after you had presented your educated insight on the client’s property based on years of experience in the local market then heard the client say, “but Zillow says it is worth this”?
Whether Realtor or Appraiser, this question will continue to come up as more companies are moving to harness vast amounts of data to predict home values.
So, the next time you need to explain the difference in your Market Analysis of a client’s property and the Zestimate provided by Zillow that your client has asked about, you can go directly to Zillow's site.
They provide information on how accurate their Zestimates are for each state and county they cover. For example, here in Illinois, in the graphic below, you can see that for Cook County, a Zestimate is only accurate within 5% of the actual sales price 23.8% of the time and within 10% of the sales price only 44.6% of the time.
So, what does that mean? It means that less than 25% of the time, they are accurate within 5% of the indicated number. So ask your prospect / client, do you want to achieve a high degree of accuracy with a level of precision? Or do you want to trust a computer program that currently achieves a low degree of accuracy with a level of precision?
If your prospect / client answers the latter, then dump them immediately and move on!
Check out your county now.
Michael Hobbs, PahRoo Appraisal & Consultancy