Tuesday, May 3, 2011
Zillow Estimates of Value in Naples Florida
More than once in the past few weeks I have had the same conversation with a potential customer having to do with the accuracy of the "Zestimates" on Zillow.com
I just hung up after trying to substantiate an asking price of a home listed on Zillow and decided to view those listings which I know for a fact are priced very well, just to see what value Zillow has put on them. In all cases, [and I checked over a dozen addresses], the zestimate was well below the listed price. In one case the list price for a home directly on Naples Bay was 'zestimated' at over a million dollars below the list price. I think, as an agent, we need to inform the public as to the reason why this happens so often on Zillow. Here's my attempt to clarify:
Let's take the example of a home listed in an estate area within a subdivision. Estate area being considered as one of the premium lots and larger, luxury homes. Also within this particular gated community there are garden apartments, villas and single family homes on zero-lot lines as well as the "estate-size" lots. A diverse selection in price and architecture. Zillow determines value based on the closed sales which have occurred recently in the geographic area closest to the subject property. If the subject property is listed at $1 million dollars, and 2 of the 10 most recent closed sales were also in the estate area of this community, but the other 8 closed sales were in either the villas or the homes on smaller lots, then the value will be based on non-comparable properties because zillow uses all the sales, not just the 2 that were most comparable!
I hope this makes a little bit of sense. In the end, buyers need to work with licensed, professional real estate agents so that they do not overpay for a home and condo--And seller's need to work with agents prepared to determine value by doing a Competitive Analysis based on the best comparables available in any given market.
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Thank you, and make it a GREAT day!
The Naples Real Estate Blogger