Zillow accuracy evaluated

[Tawfik Ahdab]

Zillow makes sure to note that the Zestimate can't replace an actual appraisal, but articles on its website also hail the tool as a "powerful starting point in determining a home's value" and "generally quite accurate." The median error rate for on-market homes is just 2.4%, per the company's website, while the median error rate for off-market homes is 7.49%. Not bad, you might think.

But that's where things get sticky. By definition, half of homes sell within the median error rate, e.g., within 2.4% of the Zestimate in either direction for on-market homes. But the other half don't, and Zillow doesn't offer many details on how bad those misses are.

Zillow's price estimates are screwing up homebuying

Zillow's price estimates changed how we browse homes forever. Here's what's wrong with the Zestimate — and what every buyer and seller should know.

www.businessinsider.com

 

[George Hatch]

Garbage in, garbage out. Appraisers spend a LOT of time qualifying their data prior to actually analyzing for value. Not only for the subject attributes but also for the comp selection itself (which can inform an AVM) and by driving the comps to put an eyeball on them.

IMO that's what makes the GSE AVMs different from all the others - they're using appraiser data. If they have 4 appraisals on file for a particular property it won't even make any difference if one of them is squishy with their descriptions and ratings.

 

[Fernando]

Homeowners get their valuation from Zillow. I check to see how the public values their properties.
Have to admit that Zillow is getting better and it does give standard deviations of the possible range.
I also look at their given sales and if not good comps than I know the valuation is less accurate.

 

[George Hatch]

20 years ago the buyers and sellers were completely reliant on whatever the brokers were telling them about the RE market and pricing and such. They literally didn't have any access to the information on their own. That isn't the case any more.

 

[alebrewer]

Information dissemination is an incredible tool for leveling the playing field.

 

[Fernando]

20 years ago the buyers and sellers were completely reliant on whatever the brokers were telling them about the RE market and pricing and such. They literally didn't have any access to the information on their own. That isn't the case any more.

I find Redfin more accurate in valuation.

 

[TerryRohrer]

I find Redfin more accurate in valuation.

Do you cross out the following when you report their valuation in your appraisals?

"I stated in this appraisal report my own personal, unbiased, and professional analysis, opinions, and conclusions, which are subject only to the assumptions and limiting conditions in this appraisal report. "

 

[George Hatch]

Ah, but if you looked at an AVM (or someone else's appraisal) and developed the opinion that it's value conclusion is reasonable then [your opinion] is your opinion.

 

[Fernando]

Do you cross out the following when you report their valuation in your appraisals?

"I stated in this appraisal report my own personal, unbiased, and professional analysis, opinions, and conclusions, which are subject only to the assumptions and limiting conditions in this appraisal report. "

I can't help it if I'm more thorough than you in checking and researching as much about subject.

 

[Fernando]

Ah, but if you looked at an AVM (or someone else's appraisal) and developed the opinion that it's value conclusion is reasonable then [your opinion] is your opinion.

It's relevant. If I get hold of a second opinion, I want to know what the other appraiser's opinion of value since subject owner has knowledge of it.
If significantly different from mine, I will scrutinize the other appraiser and see why it came about that valuation.
Subject owner will also wonder why if there's a difference. Be proactive.