Sellsius real estate marketing blog

Hi, it's David G from Zillow,

Don't you think that "shit" and "crap" are a rather extreme ways of describing this issue? I'll take a shot at addressing your critique but in future, please consider contacting me for comment.

The blogger you are quoting is incorrect. The comps algorithm on Zillow does not just a list of recent sales in a set radius but rather it attempts to select nearby homes that have recently sold and that are similar to the home in question. It's important to remember that the list on Zillow is a list of suggested possible comps that is intended to be paired down by the user and so, we cast a wide net and let the user select the most relevant comps from the suggested list and so, you should certainly expect some of the homes in Zillow's list of possible comps to be poor comparables. I do think it's a cool feature that some MLS' allow agents to only pull recent sales within a sub-division at the click of a button and I agree that this is important when dealing with spec-homes in housing tracts but you can certainly do the same thing by filtering the list using the map of comps on Zillow - it may take a few more clicks but there's not a huge difference between approaches.

And using Zillow, users can search and filter all recent sales for a detailed online comps analysis that bypasses the recommended comps list. Frankly, this is the most thorough approach and the one I would expect many pro's to take. The blogger that you're citing in this post is rather naive to believe that any algorithm will give him a completely accurate comps list with a single click. That's simply not how a skilled pro chooses comps.

Lastly - please remember, Joe, that Zillow was never intended to replace the MLS and Zillow's users don't not have access to the MLS.

No, I do not think words like shit and crap to describe computer-generated comps buyers & sellers can't depend on, that may be incomplete, false or misleading, which can cost a buyer or seller thousands of dollars, is too extreme. Call it poetic license if you must. The point is computers can't pull accurate comps and they are especially crummy :) if they use a radius search to gather the homes for culling.

1. As I read the post in question, the author does not address the comps "algorithm" but rather the selection process, to which the algorithm is applied to cull comps. That initial selection of houses is based on a radius search, he says.

Are you saying Zillow does not use a radial search in any way in the comp process?

2. Can a visitor do a subdivision or builder search on Zillow? If not, and an MLS search can, Zillow is less useful. Agreed?

3. Finally, while I agree a professional can make independent filtering decisions, the consumer cannot. Zillow 's "edge in real estate" is not meant only for professionals , but also for consumers, no? If so, the edge is butter knife dull when it comes to comps.

PS. Although the post cited Zillow, the point is meant to apply to all third party online real estate websites which are NOT MLS data fed.

PPS
"Lastly - please remember, Joe, that Zillow was never intended to replace the MLS and Zillow's users don't not have access to the MLS."

Exactly. So a consumer who relies on Zillow (or trulia or others) for comps vs using a professional who does have access to the MLS, is at a distinct disadvantage. Wouldn't you agree?

Joe - no one is suggesting that a consumer relies on Zillow for comps vs using a professional. Quite the opposite ... Zillow is a great place to FIND a local expert.

"Joe - no one is suggesting that a consumer relies on Zillow for comps vs
using a professional"

And that is the crux of it. Inherent unreliability of Zillow comps renders
them stinky.

With no intent of adding any depth to this discussion other needs notation that Shiitake's (with the extra i) generic brothers are grown in equally genric matter and kept in the dark as well. Amazing what consumer's consider delicacy. :>)

Quite right. While the extra i variety is a delicacy, the ones with one "i"
are better scraped off the shoe.

I have limited experience with Zillow, but realize, even if you use three different appraisers to appraise a property you will have three different opinions regarding the value of the property. I think the deviation can be about 10 percent from the low to the high.

I can live with a deviation coming from local human experts but not from a
computer in Seattle.

Does the location make the difference or logic with which it has been programmed?

After all isn't an appraisal more art than science, due to the evaluation of the variables?

Logic applied to location.

But....a computer cannot account for "unzillowables" in its logic, while a human can.

http://tinyurl.com/26vx5z

An appraisal is just an opinion of value. Depending on the comps used I have saw 2 different appraisals that were 25% apart.

Wow. If humans can't get it right, how much faith can we put in the Seattle
computer, which doesn't even visit or inspect the comp homes?

That is some variation in value! Did you see where the difference appeared and what were your thoughts?

No, I did not get the details.

Hum, some good info, I will post on this soon, have to run out the door right now. But I will post on why I wrote the article: Never Use Zillow.com To Comp Properties.
until then,
Bill Guerra

Thanks Bill. Let me know when you write it.

David from Zillow made a comment on my blog and this is what I posted on there blog thought you might like to see it. Bill Guerra

Hello David G. of Zillow, this is Bill Guerra of WillBuyAnyHouse.com/news

I am responding to your comment, on our blog, where the article I wrote titled "Never Use Zillow.com To Comp Properties, Here's Why" is parked.

Thank you for the reply it provides great discussion for inquiring minds. You had mentioned about the Zillow and its ability to comp. My article really did cover most of this.

Zillow does not have the ability to comp in subdivisions only, nor does it have the capability to see whats listed for sale in the subdivision. Both are very critical when you are writing the check/cash for say $100-$200,000 dollars to buy a house and close in 3-5 business days.

In this instance an individual or investor needs the best software money can buy, wouldn't you agree? The proprietary software I am talking about is the multiple listing service (MLS) which the Realtors use.

Also it's critical to see what houses are available for sale in a subdivision or area here is why. Say you have a house you want to comp (this is called running a comparable market analysis)on, yet there are 15 others on the market for sale in that subdivision. You must take that into consideration in making a buying decision because your subject houses' value just plummeted.

The reverse is true to, if you know that three is no other houses like yours available in the subdivision then you can increase your price.

These are a few reasons why you need the MLS to seriously comp properties. That said, for a new investor trying to wrap their minds around running comps, or homeowners who want to get a gross ideal of what there place is worth, Zillow is just in fine. There is a place in the world for everything!

Thanks Bill.