Scenario: Owner wants to sell his home and list it on Zillow. The only problem is his house is zestimated at $300K and he has several appraisals/CMAs which say it’s actually worth around $450K. Owner decides to list it for $400K to get a quick sale. The only problem is the owner does not like the Zillow Zestimated For Sale sign sitting there right next to his listing price. He asks Zillow to take down the zestimate. Call it an Owner Right To Opt-Out. Will Zillow recognize this owner’s right to list his property without a competing price beside it?
Our Prediction: Yes, Zillow will give owners the right to opt-out. What’s your crystal ball say?
Related Post:
Will Listing Your Home Above the Zestimate Turn Away Buyers
UnZestimate my Home: Will Zillow Let Owner’s Opt-Out?
Technorati Tags: Zillow, zestimate, opt out, home valuation, appraisal, sellsius
Excellent thought, guys. My brain had not made it to that point yet. Who wants to ‘list’ their home next to a crazy low zestimate!
No, they won’t. They will become a platform. Resistance is futile.
Yes, Zillow has refused to take down zestimates, even ones they know are grossly inaccurate. But Zillow has represented to one person that Zillow would correct their zestimate (Steve Olshans). If you do it for one owner, why not another?
But here’s a new ballgame. If you list your house at a fair or even below market price, and the zestimate says it should be even lower, you may cut down on the number of buyers wanting to look at your home. They’ll just move on to another. No biggie, unless you’re the owner whose home was just passed over. A savvy owner will question why the zestimate has to be there when they are listing & trying to sell at THEIR price.
Here’s food for thought. Appraisal $795,000 - asking - $750,000 - Zestimate - $725,000 - two offers received - $725,000 each.
At what point can an owner claim damages on results like that? Real example, not hypothesizing.
Just for the heck of it I did a zestimat on a home I am tracking closely. The zestimate was about 200K less than asking price. I’m not saying it is right or it is wrong, but I can tell you the seller is not interested at that price. And zillow would be the wrong place to have it listed. I know that you would get 2 different appraisals on it even from an experienced appraiser, let alone an algorithm.
Much of my primary market is unzillowable. The housing stock is varied and sales prices are not recorded in public records.
Hi, it’s David G from Zillow
Sellsius -
Please try out these new features!
When you do, you will notice that the sale price REPLACES the Zestimate on the maps, in search results and on the home’s details page … so, if you believe that your Zestimate is wrong, it makes no sense not to post your home for sale on Zillow. We still display the Zestimate — on a home which is for sale, it is relegated to the bottom of the public records and is published along side the owners estimate.
This reflects the real world … by the time a house is listed for sale, it has had a local expert determine its sales price. At that point, the Zestimate is no longer as interesting — what’s interesting is what buyers think of the list price, not the Zestimate.
Again - please try it out; you may be surprised.
And as I’ve said before, the Zestimate is just a starting point. Most consumers get that — even the ones who quote their Zestimates in negotiations.
Nice to see the listing price taking primary importance. Good work. We will check out the site’s new features. You should still give the owner the option to “hide” the zestimate. Believe me, owners will thank you.
Our limited poll says they want the opt-out.
Just give us credit when you finally do it
I am not that familiar with this internet company. Are you saying that Zillow just places values on properties in a certain neighborhood as if they were for sale? Or are they trying to place a value on the home in a certain neighborhood to let the consumer know what the value should be.
I am a little confused with Zillow what is their purpose?
Ardell
If I were the seller, I would not want a lower zestimate to possibly get in the way of getting my list price (or as close to it as possible). A lower zestimate might encourage a buyer to underbid and both may lose out. In your example, there is no way to tell if the buyer was influenced by the zestimate to bid less, so I can’t say there was any harm. (I assume the appraisal was not revealed to the buyer) But if the buyer was influenced, I would not be happy the zestimate pulled down the offer price.
I dont know whether any harm could be actionable under law. I suspect an owner would first have to demand it be taken down, Zillow refuse, & owner not sell the property (a really tough case). Ask Russ if he could envision a viable “interference with propective economic advantage” or other tort for refusing to take down a grossly incorrect zestimate. It would be a unique case. One I would not bet on winning.
BTW, I see you are one of the few bloggers to see this list price/zestimate issue (Greg Tracy of Blue Roof, also caught it).
Next time you speak to David G, urge him to let owners “hide the zestimate, especially the really ugly ones (i.e grossly outta wack)
Obviously someone really hates seeing the Zestimate for valuations they believe may be grossly inaccurate. Think about this, if you allow people to opt out would it not cause others to wonder why? Isn’t it somewhat fairer to apply the valuation (be it right or wrong) across the board to everyone today? No bias towards any one home. In fact with the new features it behooves one to go and “correct” the information so that it is as accurate as they think it is. If you allow people to opt out, the Zestimate might as well be tossed out in it’s entirety. However if you don’t allow opt out you essentially are forcing people’s hands to make this as accurate as you can (on inaccurate, your choice). Think of it like a wiki, who’s going to really police these prices? The homeowner is going to want the best possible selling price while the buyer wants the best value. You have Zillow in the middle where with the Zestimate it’s a formula (with agents and sellers putting in information it’s in the hands of a human and who knows what damage that will be). Why is it that we don’t see similar bitching from people who use KBB or Edmunds when assessing the valuations of their cars? It’s a guideline, not gospel. At the end of the day the buyer and seller still have to duke it out.
Absolutely! Actually, what I think will happen is the owner of the property will be able to justify the price they believe. How? The owner will provide the documentation (A Realtor CMA, an appraisal, the comps selected, etc.) via a submit process. All this data will go into Zillow’ database and potential go into their zestimate formaula for other nearby properties. Eventually, the zestimates will get better and Zillow will have what is needs and wants - More data. Not only will they get a zestimate closer to Realtor estimates, they would have the Realtor name and begin tracking their estimates and eventually establish a track record for the individual agent, whereby more stats about the agent can be expanded upon. That will become another snowball of information to use. (how many houses listed, sold, avg price). Heck, a potential seller could lookup up their area and see who is selling the homes, their activity, etc. and the agent, for providing the beneficial service of a CMA for free, can then pay to advertise on those neighborhoods where they are providing their free services…
Excellent points wallow and VideoMagazine TV and I can agree with the logic. But I think there may be a superceeding right of an owner, or their agent, to control how their listing is displayed, including how much information they want to disclose, and whether they want any “incorrect” information displayed, especially if that information can have a negative effect on the sale of their home.
David G of Zillow had this to say about listing price & zestimate, which I repeat it here in pertinent part:
“….you will notice that the sale price REPLACES the Zestimate on the maps, in search results and on the home’s details page … so, if you believe that your Zestimate is wrong, it makes no sense not to post your home for sale on Zillow. We still display the Zestimate — on a home which is for sale, it is relegated to the bottom of the public records and is published along side the owners estimate.
This reflects the real world … by the time a house is listed for sale, it has had a local expert determine its sales price. At that point, the Zestimate is no longer as interesting — what’s interesting is what buyers think of the list price, not the Zestimate.”
This statement indicates their sensitivity to this issue.
Thus, despite the logic for leaving the zestimate, and ignoring for the moment the degree of inaccuracy, an owner should have the right to CHOOSE to prevent ANYONE from interjecting information they do not want on their listing. As a broker, I don’t want anyone’s opinion of it’s value on my listing.
All we’re saying is that if an owner asked that the zestimate be taken down when their home is listed for sale, Zillow honor that request. It is a matter of owner choice and control. If an owner wants the zestimate (eg when their list price is below the zestimate), they won’t exercise that right.
Owners, and the agents that represent them, should have control over their assests & how they are displayed for sale.
I don’t know - maybe its a New York thing with me. It’s not that I don’t like it - Its not that I love it. I just find any site that tells me that MY pricing on the home I have listed is wrong. Not only are they putting the Zestimates so close to the ASKING Price - but the “Adjusted” owners pricing is there too. SO, You have three prices - one high - one HIGHER and one way too low. I am just guessing, but I THINK that the buyers viewing the post - will go with - the lower price and DEDUCT from that!. So other than getting a FREE posting - you are getting ONLY that - with three prices. Where is the good in that?
Think - WHAT IF - Craigslist started going onto our postings and put a disclaimer on the bottom of our ads stating that “This home is over priced - I think the home is worth $100,000 LESS” Would people still use Craigslist?
Gee Christine if I saw your comment I could have saved a lot of typing. You distilled it to its purest form.
Christine, interesting points. The key here is that there are a number of vertical sites now providing data transparency, whether it be Zillow or Mpire as another example. Mpire does something similar to what you listed as an example with Craigslist. It will show you price trends of things that you may be looking to buy or sell. It does give you a baseline for which to start your pricing at. As much as a homeowner wants the maximum value for their home there are likely way more buyers who will demand this pricing transparency vs. leaving it to a guessing game. Same as what I used as the car example above. Everyone uses KBB or Edmunds (or whatever) to get a baseline for what they should pay. I think someone pointed it out above, if there are buyers who are intent on wanting to start with the lowest price they’re the ones likely to lose out. At least potentially now they have a number of prices to gauge their chances and figure out their own bid. The more information we have hopefully the more informed decision we can make.
I posted a couple of my listings on Zillow yesterday to get a feel for how everything was displayed. Personally, I would want the zestimate because that’s why people come to zillow in the first place. If I tried to hide it, the lack of transparency would be bad for business.
I used the My Estimate feature to help justify my list price. I entered a few of the homes improvements which made it appear that my list price split the difference of the zestimate.
The zestimate was placed at the bottom of the screen along with the little graph that shows just how much the zestimate varies.
I think people will be able to make the leap as long as the prices are in the same ball park.
wallow,
Do you agree that transparency should not justify displaying inaccurate information, whether it’s a zestimate or something else, on an owner’s listing? If so, a grossly inaccurate zestimate has no value on a listing & can infact, detract from it.
The Kelley Blue book analogy, that zillow first went with, does not really apply very well to housing. That’s why they dont push it anymore.
Cars are relatively straighforward in components and age and mileage are the key factors which invariably “lessen” the value of a car—not so much a house, which is usually an appreciating asset. Classic cars would be better suited to zillowing, not the Ford Focus. Besides, most cars are not upgraded by their owners—you cant add another room, or new deck or swimming pool, new roof. New rims is more likely.
Also zestimates are not a baseline. They can be a ceiling or overvalue a home. Many zestimates are ABOVE the list price.
Thanks for pushing the conversation.
Spencer,
What if they are not within the same ballpark?
i’m just saying that the kbb is a case where data transparency is being provided. you’re right that homes have much more discernable value due to improvements. baseline may not be the right word but it is a valuation provided based on some algorithm. i don’t see how that valuation is necessarily any worse off than a valuation some home owner puts on their own home (if anything that’s even more of a finger in the wind). your question to spencer of not in the same ballpark is subjective. what’s the differential that would qualify whether it was in your ballpark or my ballpark? i’d like to see the statistics on %age time that Zillow is above the list price and what the average %age difference is from the Zestimate and the list price. How was that list price determined and who’s to say that isn’t undervalued? I think eventually there will be gradual improvements in the way the Zestimate is calculated much the same way that whoever is applying that list price today is doing it. You mention accuracy too. Who’s the gauge of that accuracy? It’s not like someone is applying a mathematical calculation to it (albeit I would hypothesize that Zillow comes the closest to doing that based on historical, public and sales data). If anything I think your claim of what is accurate is even more subjective than that of Zillow’s. If Zillow were to really push the bounds of improving a Zestimate then I would think their next step is to ask people things that help improve the value of their home (how much is obviously subjective unless one were to do a bunch of analysis on the market rate for these items) so that they can factor it into the Zestimate in addition to the data they use today.
All valid points wallow.
To focus the issue better let me put it this way. The zestimate is admittedly error prone, maybe to a great degree, according to Z itself. What if the zestimate is way off? I agree an owners price may be blowing in the wind but we all know that. But the zestimate should not be a comparison value, the measuring stick, esp if the zestimate is way off.
Are you saying the owner should have no right to take down an admittedly grossly inaccurate zestimate? If so, that’s fine. But as an owner trying to sell I don’t like it.
Yes… Zillow is on the verge of being the first real national MLS. You will see that they fall in line really quick with the desires of the sellers and real estate agents as other sites are attempting to do the same thing behind Zillow. The site with the best inventory will win the marathon. The short term issue for thme is to develop a great inventory of houses for sale!
That is why the listings are free. For Now!
On the money Scott.
Do you think they would charge for listing, somewhere in the future?
I hope hope they DO charge for listing…vs. selling leads. Please don’t be another “lead generation” company…please?!
Can’t rely on Zillow. We believe Zillow wanted to be a listing site from day one and used the public data to get all the home facts. Quite a smart move since public data is free & copyright free. Get the listings BEFORE they are for sale.
Consider that Expedia was a transactional site & they mastered that—a static value site is not transactional & completely out of character. We’d love to get our hands on that smoking gun memo (surely with special sauce stains on it). We don’t think Z became a listing site because “that’s what consumers asked us to do”. Consumers, like Steve Olshans (look him up in the Elvis home value post on zillowblog), asked for grossly inaccurate zestimates to be corrected and zillow didn’t listen to them.
Z will have more surprises—why did they get licensed in several states?