What do you do with a Zillow Zestimate?

In the post below, I have shown comparisons of Sold price vs. Zillow Zestimate and Cyberhomes valution of the most recent recorded sales.  Why do we need to know this, and how do we use this information?

1) Short Sale vs. Zestimate – Was buying a short sale worth the extra hassle?

SS#1 – the Zestimate is identical to the 2008 assessed value. The Cyberhomes value is also almost exactly what the owner paid for it in March of 2006.  So neither was needed, as most buyers would look at assessed value and what the owner paid for it. This short sale is good for an “end user”, but not for an investor.  The discount of 5% under the Zillow Zestimeate and 10% under the Cyberhomes value equals the hassle, no more and no less for this buyer.  But there was a buyer before this buyer who waited around for 60 days for the bank to not approve the original offer price.  The first buyer flushed out what the bank would take.  The second buyer had the advantage of the first buyer’s hassle factor.

SS#2 – This is a good one.  The assessed value, Zillow Zestimate and the Cyberhomes values are all about the same.  This is down where current prices are about equal to 2008 assessed values in Auburn and Federal Way.  So this sold for 20% under fair market value and 30% under what the current owner paid for it. Hard to see the hassle factor, as it looks like they didn’t put this one as pending until they had bank approval, which was 10 days or so before it closed. This one is a stereotypical good Short Sale from the buyer’s standpoint and the Zestimate and Cyberhomes valuations and assessed value all confirm the discount.

Now that you know what a good and bad short sale looks like relative to a Zestimate, et al, you can see that SS#3 = not so good, SS#4 = Zillow’s way over on this one.  Assessed is $717,000 Cyberhomes is $794,000, the owner paid $803,000 for it in 2006, so not likely the Zestimate of $937,000 is correct. Compared to the Zestimate it looks like a screaming deal…but in reality it’s about the same as SS#1…OK for an end user but not for an investor.

For those who wanted to know Original Asking Price, I don’t know how it helps you to know that was $1.4 million on a property whose value is clearly just under $800,000?  Maybe I’m missing something, but asking price is never part of my valuation for  a buyer client.

Bottom line, looking at the Zestimate AND the Cyberhomes value AND what the owner paid for it and when AND the 2008 assessed value (not 2009) and the improvements or lack thereof, tells you a lot more than “the comps” these days.  Looking at comps is dangerous, as if you go back even 4-6 months, you are looking at prices that are higher than today’s current market value.  That may change into the second quarter…but the full area trend is MUCH more important right now than what the neighbors’ homes sold for back in June or July.

Zestimate vs. Sold Price

“Tsuru” over in Seattle Bubble comments, asked me for a comparison of Zillow Zestimates vs. Closed Sale Prices in the current market.  To be sure the Zestimate isn’t picking up the recent sale, I’m using the latest 50 or so sales recorded in the mls for King County in the last few days.  42 are single family homes and 8 are condos. I’m only showing the data for the single family homes, but thought you’d like to know the breakdown of the sales for the last few days.

I think I saw David G. at Zillow and someone from Cyberhomes going at it recently, so let’s throw Cyberhomes in the mix too.  As usual, I am posting this as the results come in…so I have no idea how it is going to turn out.  Let the best “man” win 🙂

Also of particular interest are the number of sales that are Short Sales and Bank Owned or other “stressed” sales, many, and very few of those indicated so in the Public view vs. Agent fields.

Sold Price Zestimate                Cyberhomes

$262,000 SS*                 $275,000                  $292,552

$365,000                         $301,500                   $398,192

$287,000 BO*                $311,900                   no result

$530,000 CO*                $743,000                  $695,991

$140,000 BO*                $186,957                    $196,698

$210,000  SS*                 $269,500                   $274,417

$282,500                           $320.000                  $281,461

$285,000                          $276,000                   $276,134

$347,500                           $334,000                  $347,910

$480,000                          $422,500                   $483,891

$550,000 ES*                  $705,500                 $688,842

$565,000 NC                      none                              none

$652,500                              ” N/A”                       $661,320

$190,000 BO                     “no result”                 $234,017

$269,950 SS*                    $285,400                  $282,102

$279,900                           $413,000                  $272,349

$517,000 BO                     $682,500                “$0-Foreclosure”

$450,000                           $454,500                 $518,982

$176,000 BO                     $312,500                 “0-Foreclosure”

$267,999 NC                           n/a                                     n/a

$740,000 SS*                   $937,000                $794,218

$325,000 CG                     $547,000               $567,171

$420,000                           $410,000                $402,384

$451,050 CR                     $637,000                $559,188

$850,000 NC                         n/a                               n/a

$835,000                           $802,500                $811,305

$915,000                            $831,500                $875,266

$850,000 NC                          n/a                              n/a

$370,000                           $367,000               $428,766

$636,500                            $702,000              $676,200

$650,000 SS *                   $707,500              $662,000

$360,000                            $347,500              $376,152

$475,000 BO*                   $584,157               $585,199

$292,500 NC                            n/a                              n/a

$305,000 NC                           n/a                              n/a

$309,950 NC                            n/a                              n/a

$373,000                            $342,000             $352,252

$386,000 NC                               n/a                         n/a

$389,950 NC                               n/a                          n/a

$400,000                            $391,000             $392,337

$577,000   TR                   $467,500             $405,413

$416,000                            $468,500              $484,506

*disclosed in Agent Remarks or owner field, but NOT in public remarks

SS = Short Sale. CO  = Corporate Owned, CR  = Corporate Relocation, BO  = Bank Owned, ES  = Estate Sale, NC = New Construction, CG  = Completely Gutted, TR = Totally Remodeled

Geographically, most of the short sales, all except one, are South.  The first sales are in Federal Way, Auburn, then Burien, Kent, South Seattle, over Mercer Island, Eastside, Bothell, North Seattle on the Green Lake/Greenwood side, then North Seattle up through Shoreline. That is how the mls code numbers run from 100 through 715.

Thanks for the great time, Zillow!

As one of the presenters put it, last night Zillow took a page from real estate agent’s marketing tools and conducted an “open house.”  A certain number of agents were invited to attend, some mortgage professionals, and there were even invites out to buyers and sellers that frequently are on the site. Part of the open house involved sessions where the attendees could learn more about how Zillow functions – one session for marketing and another for the more technical side of the site.  So, my business partner and I split up to cover as much ground as possible.

For me, the marketing session didn’t produce anything new.  But, I guess I hadn’t realized until being there what a “power user” me and my team are with their site. Somehow I thought that the invites had said that they would be introducing new features, but as far as I could tell it’s stuff that we have found and started using as each new feature was introduced.  Plus, we also had already figured out that syndication sites (like Point2, vFlyer) weren’t the best way to get an individual agent’s info maximized for SEO. Although we do still use syndication sites because the go out to a lot of other sites that we just don’t want to spend the cycles having to re-enter each listing over and over and over.  It is very time consuming.  Gotta love widgets, that’s for sure!

Speaking of technical stuff… I was interested to see the data that they gave about the various sites and the stats for user activity.  Part of what was shown here also filtered over into the conversation at the after-function with regard to Zindexes ( and how that is measured and it’s rate of accuracy.

Afterward there was a soiree down at the Waterfront Grill in their private function locale in the former Rippa’s space.  (I’m curious to know where those photos they had taken will end up…. no, nothing tawdry, just lots of PR stuff) Good times had by all and some great debate between agents and Zillow employees alike.  Thanks to David Gibbons, Drew, Mike, and Scott Huber for all of your discussions with us and for being wonderful hosts along with your other employees.  It was really great to meet all of you and we look forward to seeing what else is “up your sleeve.”

RPA Zearch – Now with Turbo Zillow!

OK, I admit it. I got early access to the Zillow API. 🙂 And it’s pretty interesting stuff, it provides Zestimate values, comparable properties, Zestimates charts, and Zindex charts. Anyway, everybody knows I’ve done Zestimates before, but the charts are a new wrinkle I haven’t had the opprotunity to explore yet.

As some of you know, I’ve been working with Gordon & Jay of Real Property Associates (old site) to develop their new site (beta). Although the site is about a month away from going live, I thought I’d let the world know so they beta test my favorite new Zearch feature which I call “Turbo Zillow”.

So if you run a search for Eastside communities, below the map (sorry about the lack of pushpins folks – the server is having a bad geo-coding day), you’ll notice the new Zillow control. The control will populate with every city & zip code that was in your search results. (PS – Will the agent who entered a 00000 zip code into the MLS for MLS# 25147354, please fix it, don’t get me started). It will then let you plot a Zindex chart based off location, dollar/percent appreciation, and 1/5/10 year durations. So the control, looks like something like this…


This is really cool, because getting a new chart, is as simple and changing the drop downs to what your interested in, and the watching the chart change. Comparing city & zip codes median price histories has never been this easy on Zillow. The details page of a listing will also have a Zillow control that will show the chart of the listing, the zip, the city, the state, and the USA in the same way. Currently. the details version of the control appears to have a bug with getting the USA chart if Zillow can’t find the Zestimate. So if you see something that is way off. it could be my bug, or it could be Zillow’s bad Zestimate. Either way, I think charts & data visualization are the next big thing for MLS searches after everybody gets the AJAX maps out of their system.

On the Zillow site, to get this information, I have to click here for Bellevue, click back, click here for Redmond, and then back, and then click here for Kirkland. Why do they make getting Zindex charts so hard? I have to scroll to the bottom page, for everything and then click? Why can’t you do some Web 2.0 map magic instead of a sea of links (or just put the links it at the top of the page)?

OK, enough mini-flaming, I have to give credit were credit is due and I thank the crew at Zillow for having the guts to release an API to the public and having the courage to let me put it through it’s paces. Perhaps my experiments will inspire them to greater things, more APIs and a better UI for the Zindex pages? Until then, I’m using “Turbo Zillow” for my ZIndex fix.

Visit http://www.rpare.com/search.aspx, do your thing, have fun the fast lane my friends!

The Accuracy of a Zillow Zestimate

[photopress:2faced000.jpg,thumb,alignright] Much has been written about the accuracy, or lack thereof, of the Zillow Zestimate of a home’s value. What one must remember is that a property can sell at the low point or the high point of its Zestimated range.

I don’t pay much attention to the articles written on bubbles bursting and what kind of market we are in, because I always know what kind of market I am in. I feel it in my bones, the same way an old person can tell that it’s going to rain before the weatherman predicts it. I know just how far I can push a price in either direction, depending on market conditions and who I represent in the transaction.

Every agent wears two hats and is two-faced, because a home’s “value” has to be higher when I represent a seller and lower when I represent a buyer, and it is my “job” to “make it so”. The Zillow range of value represents my best hope for my buyer client at the low end of the range, and my highest hope for my seller client at the high end of that range. I have yet to meet an agent in the Country who can jump back and forth over that line as well as I do. I guess that makes me two-faced, but being very good at being two-faced has always been my forte.

When I represent a seller I try to get the seller to give me the key to his house for a couple of days and go away and give me “carte blanche”. Mainly because I look very odd when I am “doing my seller thing”, somewhat like “MONK” at a crime scene. I keep going out to the street and walking up to the house, at various paces from all directions, emulating a buyer getting out of the car from every possible available parking spot. The neighbors must think I’m looney.

I trim trees and bushes based on the angle of the “walk up” and what I can see and what I can’t see. “Good, that bush blocks that window frame that needs painting…bad, that tree is blocking the main feature, the rounded brick archway…then I trim the tree to “accentuate the positive” until I can see the brick archway from the position of the buyer driving by or getting out of the car, and leave the bush overgrown to “de-emphasize the negative”.

I walk into the front door 25 or more times and change things, until I remove any negative influence in my sight pettern (which is eye level side to side, without looking up or down). I always tell agents, “if you are standing in one place when you are staging a home you are “decorating” and not “staging”. Walk through and walk fast. Remove negative influence or distract the eye away from the negative with a bright vase or photo in the opposite place from the negative. If you can’t eradicate the negative, draw the eye toward the positive. That is staging, and that is why the agent has to do it themselves and not hire landscapers and decorators.

Staging is about the real estate, and a real estate professional must be in charge of what will and will not be done, to enhance the sale price.

Conversely, putting on my other hat, I take out my other face when evaluating homes with buyers. We both step into the house, and usually I walk one way and they walk the other, and I see things quite differently than they do.

They say they “love” it and I say “Oh, my God WHY?”. I get them to focus and point to what they like. Sometimes by forcing them to tell me what they like, it turns out to be a painting or a piece of furniture. I say great, let’s find that painting to put in your new house, but for now let’s go back and try this again and look at the “real estate” of this place. Sometimes, if it is vacant, I actually have to move the staging so they can see what I see.

To achieve the lowest possible price for my buyer, I either have to find a seller who has “left money on the table” or I have to find a property that is overpriced. If a house could have sold for $510,000 or $515,000, but the seller priced it at $519,000 and staged it incorrectly, I can usually get it for $500,000. That’s a standard best case scenario. If a property comes on at less than fair market value, which happens on occasion, I can usually swoop in and modify terms, to grab it while the vultures are still hovering.

Often people comment on the Zillow Zestimate wondering “Where exactly is the value of this house? Is it closer to the high end of the range or the low end of the range?” The answer is it is the agent’s job to pull “the value” in the direction of their client. When I represent the seller, I have to DO something before I hit that “live on the mls” button that makes it go higher. When I am representing a buyer I have to DO something to force it back in the other direction.

I pretend that all my clients are Captain Kirk, who command me to “make it so #2” 🙂

Rich Barton of Zillow talks at Northwest Entrepreneur Network on Friday

Just a quick note to let you know that Rich Barton of Zillow and Expedia will be talking at the Northwest Entrepreneur Network on Friday morning. Here’s the link for anyone who wants to check it out: http://www.nwen.org/calendar/regbreakfast.htm

Note that you have to get up before breakfast for these meetings 🙂

See you there.

Zillow fans, meet your new blog

Blog of Spencer Rascoff, employee of Zillow. Today’s post gives out (already available) information about Zillow. They’ve raised $32 million. It sounds like they’re settling in on a business model: Zillow’s 75 employees (mostly engineers) will manage to get the beta version out within the next 6 months. The comparison of Zillow to Hotwire is also very informative.