Sellers:    No Lender, no Appraiser will use Zillow when they are deciding whether or not to originate a mortgage loan on your house.

Buyers:   This is a computer algorithm that may be rife with errors.  Read the Zillow fine print - by their own admission, they may be off by 20%.

I tell them that Zillow has no way of taking into account the nuances of the local market that we know as REALTORS.  I have also been known to say that Zillow is the bane of our existence as a professional real estate agent.

I tell them Zillow using general data from the area and neighborhoods surrounding the property and there is no way to know the condition, amenities and how one house compares to another Zillow has never been inside the neighborhoods or the homes.The result is a very general price range that has an error market of 20%.

Mimi Foster - for both buyers and sellers, I share a link provided by ZILLOW itself - How Accurate Zillow Zestimates are.

They understand the facts from horse's mouth.

I explain that it is based on computer algorithms, but I also check Zillow prior to a listing appointment because it almost always comes up. It is easier to explain why the comps they use don't work, or to explain that Zillow doeasn't take into account remodels, renovations, and "extras" that could be seen to add or subtract value.

Fortunately, my target demographic are NOT Zphiles. But my answer is "It says my house is worth LESS. And it hasn't been to your house or mine. Now let's look at some actual data that pertains."

Zillow or an AVM is not able to make price adjustments based on lot location (culdesac), view on west side of same street versus east side, or finishes remodeled versus original 1990's. 

when someone is hung up on zestimates I show them actual sold prices vs. zestimates and it usually ends it.

Tell the seller "Zillow hasn't been inside your house". Zillow doesn't differentiate between to seemingly identical homes, with one home being under a high-voltage trunk power line or adjacent to a railroad track, or next to a freeway with sodium vapor lights and truck noise and the other home is not influenced by those factors.

Zillow knows nothing about the condition and cleanliness of a home they are "Zestimating". Zillow overlooks items like high ceilings, or premium trim and finishes.  Zillow knows nothing about home improvements made recently unless the home has been recently assessed and the data has found its way into county records.

In exurbia or other low population density areas, Zillow is worthless. Without enough comparables (and without plenty of recent comparables), these estimates are nothing but speculation.

Basically what Fred Griffin said. I also ask them if the Z estimate were low would they still want to use it.  

That it is impossible to place a value on a home without seeing it and considering location, lot value and adding or deducting for condition, amenties, garage, finished basements, new kitchens and such

What Fred Griffin said! If you explain how Zillow comes up with its numbers in a way that your clients understand, they get it.

I tell them that the Zillow valuation tool is a "ballpark" figure to be used as a guide.  The sales people at Zillow will tell you the same thing.  The important factor is, no online valuation tool can determine an appropriate value without physically seeing the property.  Adjustments might need to be made and certain features taken into consideration that these sites won't know about.  Anyone that relies on these online valuations is showing they are really "green" and need our guidance.

Mimi,

You have great answers.  The fact is that Zillow has not been inside their home, which is why it is an estimate.  Wishing you a delightful Sunday, A

The information is not accureate 

Ask if they want the real take on this issue or the sugar-coated one.

As a real estate professional if I could be 15 to 20% off on my appraisal value of your home property and still stay in business I would call myself Xillow.  I am required to be within 1 to 3% of your house value....

What was the agent's name that Zillow sent out?

I once worked with a seller who called me every day or so to tell me how the price of her home had gone up or gone down in Zillow. Like it was the stock exchange. She was crazy. Of course, her home did not sell.

I tell callers that Zillow is a great website for demographics, market movement, local information but it is not a predictor of saleability of their home nor its value. It is not a conglomerate of all homes for sale. In fact, a good number of homes for sale on Zillow are NOT for sale. Zillow is not a Realtor. It's a website looking for eyeballs.

Hi Mimi, 

What Fred said is right in my opinion, 

People see the numbers from Zillow and think that they can go with this info. It supprises me that that site is ever used. It even has listings in my market that have been under contract for 6 months or more. 

I tell them that Zillow is not an expert in our area, and they seriously suck.  

When were they last here?

It is an AVM and like many it is like being a Walmart greeter, it's a nice introduction but is the merchandise worth buying?

Great opinions are local and professional. Me or Zillow?

Good morning Mimi. I hear the Zillow conversation from time to time when I'm doing a refinance for clients, it usually isn't difficult to explain the reality that the information is totally flawed.

I explain how Zillow works and why the data are so often wrong. And showing them comparables helps to show how wrong it can be, and often is

Simply  just not true. The problem is it accounts for distressed and quick sales that lower value.

Zillow is a national web site with filtered information that lacks information on a local level in order to be a reliable source.

I had one where I was selling her property and searching for a new property.  She insisted on making lowball offers with the "guidance" of Zillow. Finally, I became so frustrated that I took my phone, plugged in her current property's address and low and behold, there was her property with a Zestimate that was 15k-20k less than the property was actually worth. I just handed her the phone and from that day forward, the lowballing stopped.

Showing the true comparables to support a price you feel the home is worth should dispel the Z results.

I explain mls records true sold prices.

In my market, a small rural one, the information to swoop in and suck out to assemble back in the west coast sausage machine is easy to explain. I show them here is a house we sold for blank that was way off with the Z estimate. But I really don't deal with this little talk much because other portals, our own create the buzz. Zillow is just one of many portals. Your own website should be richer, fuller, with video, blog posts on pertinent topics and all over local. Zillow is just one take an agent/broker's listings and get those real estate professionals to compete with each other financial for better positioning. Build your own better mousetrap as the local expert we all are suppose to be right? You and I don't know the value until we tour, compare, ask lots of questions and consider many factors beyond assessed value from four years or more and only so many sales in a small Mayberry size type market.

I've blogged on this for a longer answer, but in short, 

It's a Z-Estimate, not a Z-Appraisal!  

No one at Zillow has seen the home, knows what's been done or needs doing.  I have. 

"Zillow will tell you anything to get you to fill out those forms so that they an sell your name to an agent, and none of it is true"

It's almost gotten to the point where people have an apologetic "I know, I know . . . you don't like Z," and then send me the link to the property they found.  My spiel is that the RMLS (my local MLS) is the BIBLE when it comes to local evaluations, selling comps.  

I show them the current MLS data and explain what is the difference betwee my personalized CMA and Zestimate. 

"Many real estate boards in the country, including all the local ones, no longer provide data to Zillow, therefore their data is inaccurate and flawed.  Would you want to go to a doctor who didn't have all the latest and most accurate information?  Neither would I.  That's the same for the Zestimate."

A bit wordy, but it works.

I tell them Zillow is using general public information and has now way of know what updates are in a home.  I have seen Zillow prices way over and way under a house has just sold.  

Has Zillow been in your home?

Let's check the comps they are using.

I suggest they review David Barr 's website!! 

I have a Zillow "zestimate" on a sold home that blows that number out of the water.  If there is still skepticism, I show them listings that are closed but still show on the site.  It doesn't take long for a consumer to see that Zillow is not a reliable site.

Do not rely on internet figures on the value of your home.

NM is a non disclosure state so there is no way Z can have correct numbers.

I show them  the sold comps.

"Wonderful. So Z-devil says your home is worth $318,000!"

That is when I pull out the consumer page of the CIS Score and show them a B of A evaluation and the tax authorities evaluation and the Cis Score evaluation and market adjusted value.

"Here are three more numbers declaring the value of your property. The difference in all these numbers, and identifying  the one you should trust, is knowing EXACTLY how those calculations were made. Better still, YOU are the one who provided the data for the CIS Score! Which number gives you the greatest confidence?"

I have never had such a talk with anyone.  If anyone would ask, I would simply state that Zillow does not offer its products in our great nation and it is geared towards properties in our friendly neighbouring country.

 People do not ask that questions anymore.  Each site has an estimate. Z and Trulia are same company they have their own estimates.  If you use bankers estimator BofA, Wells Fargo and JPM got theirs. Realtor and Homes got their estimates. Redfin has its own.

Owners get dizzy needing a professional.

I had this happen recently and I just let them know that the 3 different offers we received say something else.