With the ongoing dependance we find ourselves having on technology, it is important to sift through the noise and understandthe goals and driving factors from where these technologies are based. As a real estate professional, I have a love/hate relationship with Zillow. There is a significant amount of information consumers can find which is incredibly powerful. That being said, there are also misconceptions that consumers should know about when deciding where to price a home in order to sell it for the most money in the shortest amount of time.
According to Zillow’s inaccuracy reports, only 40% of Zillow’s estimates in LA/Orange County fall within 5% of the actual sales price. Zillow overall has approximately a 10% inaccuracy rate locally, either too high or too low, that is a 20% margin of error. This can be a huge difference, especially in luxury markets where we see many unique properties that can sustain significant value.
2. Zillow does not know your Neighborhood
There are significant differences between tracts within a given neighborhood, upgrades and style of the home. Zillow cannot determine whether you live on a more desirable location, on a quiet street or if your neighbors house is a disaster. Zillow’s algorithm will group a teardown in a less desirable location along with a brand new custom home with a spectacular view. As a real estate professional, I know that this type of comparative analysis could significantly mislead a prospective client in their pricing strategy, which ultimately costs time and and money.
3. Zillow’s Goal - Use Your Home to Make Them Money
I recently attended Zillow’s Real Estate Summit where Zillow’s top developers spoke. They said to the room full of real estate professionals that they are fully aware that their “Zesitmates” are mostly inaccurate and that their first priority is to drive revenue and sell advertising. They will never be able to measure neighborhood nuance, view, style etc. They also said very candidly that they are an advertising company, not a real estate company. Simply stated the more people who visit their site, the more they can charge vendors for advertising.
4. A human will buy your home… not a robot
The one thing that will never change is that a human being will be purchasing your home. For most people there is an emotional element to purchasing a home because home is the place where they will make memories, raise a family and come to after a long day of work. The human experience is not measurable nor is it something that can be packaged. Helping buyers experience your home and community are critical in the marketing efforts and should not be ignored or replaced by technology; rather technology should supplement and enhance the consumers experience.
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