Zillow accuracy evaluated

[J Grant]

Wrt to the AVM based values whether its Zillow or any of the rest, is that sometimes the values are good, other times fair, and other times off the charts bad

The problem is, we can never tell which it will be.

 

[GWISC]

I just recently found a comp on Zillow. It was used by other appraisers as per TOTAL software (when I type in the address, 1 or more columns of how other appraisers used it appear). All of the appraisers that utilized this comp used it at the price Zillow indicated. I called the agent listed in the contacts section to verify the price and transaction details. Turns out, the actual sale price was much higher, more than $130,000 higher (more than %16% higher) than what was indicated in Zillow (and by the other appraisers using TOTAL). The agent could only speculate as to the discrepancy, but acknowledged that the price should have published at the higher price.

Also, can Zillow separate out arms-length transactions from non-arms-length transactions (estates being sold by heirs who want a quick sale, desperate sellers getting out and selling quick, and sometimes desperate buyers who overpay for a variety of reasons)? Does Zillow just assume all sales are at market level and that market conditions are always ideal?

What about properties transitioning from residential to commercial and selling for a premium? Does Zillow recognize the buyer's intended use for these types of properties will be commercial?

All of these sales, non arms-length, arms-length and properties transitioning to other uses are likely added to the data soup for Zillow.

I know that much of my time researching the market is just sifting out the comparable sales to see which ones are AL and which ones are not. I find about 1 in 5 are below market level to some degree and are not comparable sales I could ever use.

In summary, not every sale is arms-length and, based on my own experience, not every sale price in Zillow appears to be accurate.

 

[shrubberyvaluation]

Wrt to the AVM based values whether its Zillow or any of the rest, is that sometimes the values are good, other times fair, and other times off the charts bad

The problem is, we can never tell which it will be.

I can normally tell, but for most people they will not be able too, except maybe for their own home which they might have done research on.

 

[shrubberyvaluation]

I just recently found a comp on Zillow. It was used by other appraisers as per TOTAL software (when I type in the address, 1 or more columns of how other appraisers used it appear). All of the appraisers that utilized this comp used it at the price Zillow indicated. I called the agent listed in the contacts section to verify the price and transaction details. Turns out, the actual sale price was much higher, more than $130,000 higher (more than %16% higher) than what was indicated in Zillow (and by the other appraisers using TOTAL). The agent could only speculate as to the discrepancy, but acknowledged that the price should have published at the higher price.

Also, can Zillow separate out arms-length transactions from non-arms-length transactions (estates being sold by heirs who want a quick sale, desperate sellers getting out and selling quick, and sometimes desperate buyers who overpay for a variety of reasons)? Does Zillow just assume all sales are at market level and that market conditions are always ideal?

What about properties transitioning from residential to commercial and selling for a premium? Does Zillow recognize the buyer's intended use for these types of properties will be commercial?

All of these sales, non arms-length, arms-length and properties transitioning to other uses are likely added to the data soup for Zillow.

I know that much of my time researching the market is just sifting out the comparable sales to see which ones are AL and which ones are not. I find about 1 in 5 are below market level to some degree and are not comparable sales I could ever use.

In summary, not every sale is arms-length and, based on my own experience, not every sale price in Zillow appears to be accurate.

What did public records and the deed say? Shocking if appraisers went off of what zillow said.

 

[GWISC]

What did public records and the deed say? Shocking if appraisers went off of what zillow said.

Public records indicated $790,330, not actual $905,000. I always attempt to verify sale prices and conditions of the transaction with a party to the transaction (agents, buyer, seller). In our MLS, arms-length is indicated no matter what. Often, sales are for estate settling, but are marked arms-length. Estate sale transactions can often sell under market level (heirs wanting a quick sale to settle the estate and move on with their lives).

In this case, I wanted to know why the sale price ended in an odd number. I was anticipating the agent was going to tell me that there was a concession, or some need repair that lowered the price. Anyway, the agent verified that the price was indeed $905,000. By the way, not the first time I have come across a sale price being misreported in the MLS and public records.

I have also called the register of deeds in my county on a few rare occasions to draw their attention to an error on a price in their database. Often times, I see corrections, or corrected deeds, to correct sale prices (not related to my tattling either).

Verifying the transaction and details is often very helpful in determining many aspects regarding the comp; ie... condition, quality, major repairs not noted in the MLS etc.. Every once in a while, there is a comp with some remodeling which seems to sell low. On these rare occasions, it is a major structural or electrical issue that was not a addressed during remodeling, but discovered by building inspectors. If that is the case, I follow-up with the agent if they know how much the repairs were. I generally grill my agents on details.

I always make a sale profile of the comp which includes;
-MLS#,
-public records #,
-if the verified price is different than what is published and why,
-source of the verification of the comps transaction (brokers, or agents name and company name),
-discussion of prior sales and title transfers (recently inherited, divorce, property flip by an investor etc..)
-discussion of the house, such as age, design, remodeling, need updates, quality features.
-lastly I indicate the source for my comps GLA and age (usually the assessor, sometimes my own files if I have appraised that house prior)

The next paragraph discusses the differences and the adjustments.

This takes longer, but then you have less questions from underwriters as to why you did X, Y and Z.

Also, after I create a comp profile, I copy it into a sales database so I don't have to re-write (re-research) the profile then next time I use it in another appraisal.