Question:
“We’re interested in a house and checked what value Zillow shows for it. They have $517,000, but the home has been listed at $449,000 for a few weeks. So obviously it’s not worth $517,000. Why do you think Zillow is so bad?”
Answer:
I can think of at least three likely reasons that ALL such websites and “automated evaluations” are so far off.
1. They “pull comps” (decide which home sales to compare to) by proximity and can’t distinguish between pricier or cheaper neighborhoods nearby. Recently I saw an automated evaluations for a home in Clairemont pull comps from Bay Ho, a pricier neighborhood nearby.
2. They don’t factor in those pesky little details like amenities, condition, upgrades, views, yard size, location, etc.
3. They’re based on closed sales and don’t factor in the current market or whether there’s a shortage or surplus of homes for sale.
There may be more reasons I’m not aware of…
