You could say real estate website Zillow drives Charlotte real estate Scott Lindsley a little crazy.
Zillow, a Seattle-based database that lists homes for sale and rent and features “Zestimates” of property values, refers to itself as an “enormously helpful real estate site.”
But for Lindsley, it results in one out of every five of his clients, on average, being misled by an incorrect Zillow posting, he said.
“It gets people super excited because they think they’ve found the deal of the century or that they’ve found something that’s available when really it isn’t even for sale,” he said.
His experience is hardly unique: Real estate agents throughout the Charlotte area lament the headaches they say they suffer from thanks to their clients getting wrong information from Zillow, a popular site among homebuyers.
The biggest problem with Zillow, Lindsley and other agents say: It’s a computer-driven model that relies on public records. Since Zillow doesn’t take into account home renovations and upgrades in its Zestimates, two properties standing side-by-side with similar square footages and number of bedrooms are often valued the same regardless of condition, agents say.
“There’s no human interaction,” Lindsley said. “No one is gauging changes.”
Larry Sauder, an agent with Keller Williams in SouthPark, takes issue with Zillow, too.
“It doesn’t get inside the house and take into account things like floor plans, style, features and landscaping,” Sauder said. “Because of that, it can be way off.”
While Zillow is sometimes accurate, it frequently misses the mark when it comes to property value estimates, he said.
“Sometimes it’s right on the money, but not often enough to be a reliable indicator,” he said.
Zillow spokeswoman Katie Curnutte admitted that Zillow is limited in its ability to gather the detailed information about a house that an in-person inspection would reveal.
“We’re not inside the house,” she said. “We can’t see things like a new bathroom or kitchen renovation. And we’re really transparent and clear about this. Zestimates, in general, are a starting point to determine a home value. They’re not an appraisal.”
She said the website uses a proprietary algorithm — essentially, a set of instructions that govern how something is calculated — to come up with property values. She said the majority of the information Zillow uses for its Zestimates comes from public record data and through brokerage listings, as well as input from homeowners.
But Lindsley said inaccuracies on Zillow create friction between him and his clients. He’s received emails from clients who were annoyed that he didn’t tell them about a Zillow deal, which, upon further investigation, turned out to be too good to be true, he said.
“It’s almost like they imply I must be an idiot for not telling them about this property, and I always want to reply that you must be an idiot for thinking the information is accurate,” he said. “I have to educate clients constantly that Zillow and similar websites have information that can’t be relied upon.”
Lindsley said that while Zillow’s estimates can be fairly accurate when it comes to homes in large suburban neighborhoods where nearly all the houses are identical, they tend to be much less dependable for older neighborhoods, where there’s a range of property types and conditions.
There are other websites similar to Zillow, such as Trulia, but Zillow is by far the most popular, with a database of more than 100 million U.S. homes.
Zillow has estimates on a little more than 350,000 homes in Mecklenburg County, Curnutte said. She directed The Mecklenburg Times to a data table on the company’s website that compares Zestimates with the actual purchase prices of homes.
The table indicates that 37.4 percent of its estimates in Mecklenburg County are within 5 percent of the sales price. Widening the scope, the table indicates that 61.4 percent of the Zestimates are within 10 percent of sales prices, and 78.1 percent are within 20 percent of sales prices. Curnutte said Zillow updates that data about every three months.
She said Zillow, which was founded in 2005, constantly changes and updates its software to be more accurate and better respond to the market. The company announced in June it had updated the software it uses to calculate Zestimates, changing the Zestimates for millions of homes throughout the country.
“When we first started, the market looked very different, with home values steadily rising,” she said. “Fast-forward a couple of years, and values were falling steadily. Now it’s really volatile, and we’re trying to keep up with a market that is constantly changing.”
But Kerry Beach, an agent with Helen Adams Realty, isn’t convinced.
Beach said he has even used Zillow’s property value estimate of his Union County house as an example in a class he taught earlier this year for HAR.
He said he bought his house near Mint Hill in 2001 with the intention to renovate it. He did some initial demolition, but then he ran out of money.
“The house is a mess and has some major structural issues,” he said.
He said Zillow’s listed square footage for his house was off by 500 feet and the estimate was inflated.
“Zillow claims my house is worth about $226,000,” he said, “but I’d be lucky to sell it for $150,000.”
Timothy McCollum, an agent with My Townhome Realty, said based on his experience sites like Zillow and Trulia are useful only to a point and he’s encountered many errors on such sites.
McCollum said one of his clients recently found a Zillow listing for a home on East Kingston in Dilworth that would have been a great deal. But after checking it out, McCollum discovered that the house was actually on West Kingston in a far less-desirable neighborhood.
In another instance, one of his clients was deterred from buying in a neighborhood because Zillow claimed that a home sold for $10,000, McCollum said. He said he discovered the transaction wasn’t a sale after researching tax records.
Agents also complain that Zillow sometimes lists for sale properties that aren’t actually on the market. Lindsley said there have been occasions in which a client thinks they’ve found a steal of a deal on an uptown condo, when actually it’s either a preforeclosure or someone has simply filed for a second mortgage, yet it shows up as being for sale.
Beach said there have been occasions in which clients have contacted him about a house they saw listed in Zillow, but it turns out that it’s already under contract.
Curnutte said that often when a broker lists a property, the information is sent out to other sources that feed sites like Zillow. Sometimes that second-hand information is compromised or dated, she said. In some cases, the agent doesn’t remove a listing after a home is sold, so it will reappear in Zillow as active.
“Listings get syndicated to a lot of different places these days, and accuracy can sometimes be a challenge,” Curnutte said.
For McCollum, Zillow leaves a lot to be desired.
“Zillow is a concept is great, but the problem is that no one polices the site on a local level,” he said.
“There has been a lot of talk over the years of public sites like Zillow or Trulia taking over the role of the MLS. Until the sites develop a way to police information and increase their accuracy, these other sites will continue to be a tool for the public to use to conduct their own research, which may or may not be accurate.”
Boykin can be reached at [email protected].