Zillow accuracy evaluated

[Terrel L. Shields]

If you look at Realtor.com, most properties in areas with data will have 3 different AVM-projected values. The gap between those 3 models is pretty wide in most cases - which tells you all you need to know about AVMs and their reliability.

You mean this isn't accurate enough?

 

[Fernando]

View attachment 94862You mean this isn't accurate enough?

What does Zillow show?

 

[Terrel L. Shields]

What does Zillow show?

This is Zillow

 

[shrubberyvaluation]

Zillow does not know the difference. And further, it does not know the difference between rural property and city property. Since it cannot even differentiate between the two, its very premise is flawed.

How does Zillow do highest and best use analysis, I'm guessing it doesn't?

 

[Surf Cat]

How does Zillow do highest and best use analysis, I'm guessing it doesn't?

No cares about the H&BU or the CA or USPAP...especially the lenders. They just want the value. And, to make money off the loan.

 

[Digger88]

View attachment 94862You mean this isn't accurate enough?

Mine only has 1 which is 20% of actual value lol

 

[RCA]

Zillow does not know the difference. And further, it does not know the difference between rural property and city property. Since it cannot even differentiate between the two, its very premise is flawed.

I don't know why this is still being discussed, although I suppose Zillow is probably more accurate in some areas than others.

But, basically, Zillow cannot see inside the house, unless there has been a recent sale and plenty of MLS photos it can access; in which case, it already has a sale price. But imagine its price estimate for a house in the Silicon Valley that hasn't sold for 40+ years, looks nice on the outside, yet needs serious upgrading on the inside to bring up to the going standard for more recent homes sold in the local market area. Consider also that current remodels of just one master bathroom go a high as $30K or more. Imagine the interior needs all the drywall removed, electrical wires replaced, major plumbing repairs, replacing the floors, remodeling 3 bathrooms, a living room, a dining room, all floors and is 2,500sf or so. Zillow most likely doesn't know the degree of upgrading required. Some homes actually require $200k or more for upgrading to current sale standards.

So, what does Zillow do? - It makes a best guess. That's all. Just an intelligent guess. The estimate for a $2M home can EASILY be $200K off. It is capable of being much further off, if the home is in unusually good or bad condition, or has an unusually good or bad design, workmanship or material quality.

On the other hand, if you kind of know what the Zillow estimate means in terms of such things, and you yourself know the interior quality, condition and design, you may be able to appropriately adjust the Zillow estimate to something more reasonable.

 

[Fernando]

I understand Zillow use to buy homes and lost millions. Just show how bad Zillow's valuation.
Unlike Zillow and many other appraisers, when I value properties, I look at it in terms of buyer's eyes and if I'm comfortable in paying that price.

 

[Fernando]

Zillow can't do what I can do. Let alone many other appraisers.
I'm working on this difficult appraisal and I find it comes naturally what I need to do.
No comps in my area so I would go further back in time, go to similar adjacent area/city if needed, get different size comps, etc.
No need to consider thousands of data points in regression model.

 

[Tom D]

Regression works in the middle of the bell curve where most homes are somewhat similar. As you get closer to the edges of the bell curve, that 20%, the avm will be off.