Friday, February 10, 2006

Whats wrong with the latest site to offer real estate information to the masses. Want to know what your house is worth? Want to know how much to pay for your neighbors house? What a great idea, free real estate information at your fingertips.

I'm so glad that the expedia founder decided that this was a market worth pursuing because, it means two things to me. 1.) clients who use it, wont need me anymore (except to explain why the information on zillow is wrong) 2.) I won't have to work very hard (except for client's who have visited and think its a good thing and actually believe what they read).

Whats wrong with Nothing except for all of the features we tested. First off, real estate agents have been providing this information for years at no charge. Graphs, charts, and satellite photos are nice, but, its important to have a certain amount of human experience an knowledge in marketing and valuing real estate. Of the properties we tested, comparables were flawed to the point of being useless. Although, I'm sure that lots of people will be pleased to know that you can buy 3 million dollar home with ocean view for the low low price of $850,000.

The real problem here is that there are no comps for special properties. So the numbers given by zillow are as useful as a hole in the head. The only way to value these properties is with knowledge of the buyers, sellers, and properties in the area and trends in the marketplace. The only good thing about this site is the historical value trends chart which of course charted fairly accurately (minimal margin) the upward trend in prices in our area.

Its too bad that the math doesn't work out. The trend doesn't support estimates and vice versa. My own estimates are almost always dead on without the help of computer data (its usually outdated anyway). The idea is good, but there is no way for zillow to replace actual experience. Without human interpretation of numbers, and personal knowledge, "zestimates" will always be wrong. I know, I'm being hard on zillow's estimates because we all know that estimate means "guess", but, the best guesses from zillow are off by hundreds of thousands of dollars. That could be a very costly mistake for a buyer or seller. And if I made the same mistakes, I'd be broke and in jail.

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