Profile picture for rkevinadams

I am investor. Can I use the site to identify large discrepancies between asking and Zestimate?

Looking to identify properties that have high Zestimates and low asking prices. Currently I am looking for houses on the local realtor site and then going to your site to see what your estimate is worth. Wish I could do it all on your site. Thanks
  • July 19 2011 - Chesterfield
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Answers (9)

I will make this short.... Zestimates are usually very far off from what a local Realtor can advise you from MLS. Homes sold in MLS are far more accurate than a zestimate. I would form a relationship with a Realtor who is able to send you constant updates on the market. Looking at Zillow is good just as long you send the address to the agent to verify the most accurate info. 
  • May 09 2014
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Profile picture for Blue Nile
"A Realtor can give you actual selling prices." -

Apparently another agent hasn't bother checking to see what features and information Zillow offers.

On the homes search page (tab at the top of this page), one can chose "recently sold" and get the information on homes sold in the past:
week
2 weeks
Month
3 months
6 months
one year
2 years
or 3 years.

(The 2 years and 3 years presently seem to be defective, returning only 1 year; but they used to work).

The information provided is from county record data that Zillow pays third party data collection companies to provide in an electronic format.  It includes sales data that doesn't show up in the local multiple listings.

Besides, the original poster "investor" was not asking for CMA's on all listings; but rather the ratio of estimated value to listing price for all listings in the area.  (The poster was looking for equity potential, or profit flipping potential).

No Realtor is going to give you that information, no matter how much you pay them.
  • July 26 2011
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Working with a local Realtor would be best in finding your comps. Another suggestion, look at properties in the same neighborhood and same search criteria. This may be used as an informal way to find comps. At least you can get a general idea of what the properties are listed for in your area.
A Realtor can give you actual selling prices.
  • July 24 2011
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Profile picture for Blue Nile
The sort for the Zestimate to asking price ratio used to be much easier to obtain; and then for about 3 months it was almost impossible to obtain; but now it is attainable again, just a little more work.

I've done the sorts you suggest and have looked at the results returned.  It doesn't indicate at all what you implied; but rather, high Zestimates with low offer prices mean the properties are usually "fixers"; or that there are other idiosyncrasies involved (like problematic neighbors, drug dealers, gang activity...)

Sure, if you are a contractor that specializes in "fixers" this could be a helpful sort; but if you can't add the repair costs quickly to get a real comparison, it would be a waste of time.  Besides, if you have that much experience in construction and flipping properties, you don't care what someone elses' opinion of possible value is anyway as you would already know what it would sell for.

And why just get one opinion about possible value?  There are many other sites that give opinions on approximate market value; so you are better off getting at least 5 of those opinions, throwing out the top and bottom and averaging the rest.  And on a site like this with estimates that change multiple times in a month, you might want to look at the trend before assuming that any one published opinion is significant for your purposes.
  • July 24 2011
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Profile picture for wordsmth
Others have already explained the limitations of Zestimates. On the other hand, I understand where you're coming from. Let me suggest another strategy that may work better for you.

This involves working with a Realtor. But since you're already looking at properties on the MLS, obviously at some point--for any purchases--you will be using a Realtor.

Here's the strategy:

Have your Realtor set up an MLS search that'll screen the properties looking for bargains. It won't link to Zillow, and it won't produce a specific estimate, but you can screen for possibly undervalued properties. Now, all MLS systems are slightly different, but the one I access (MRIS) lets me have the criterion of "Tax Assessment." Now, I've warned lots of people that a tax assessment isn't a dependable gauge of what a property's worth. And it isn't. But you could use it as a screen. For example, screen all properties for sale on the MLS for $250,000-$300,000 where their tax assessment is $325,000 or more. I just did that for the county I live in (where the market is very strong) and came up with 5 actives (and a huge number under contract).

At a minimum, a property selling for $25,000-$75,000 under its tax assessment is worth a look.

You can narrow the search in other ways. Other than adjusting price and overall assessment, you can look at just the land assessment or the assessment for improvements.

And you can do all the normal screens--number of bedrooms, number of baths, etc. Plus, if you're looking for rehab opportunities, you can specify in the MLS "as-is condition," "fixer-upper," "needs work," or "rehab potential." On the other hand, if you're looking for ready-to-go properties, you can screen for "shows well."

And once you've got a batch of possibilities, you can analyze them even further. Our MLS has a whole variety of statistical reports that'll show you the average, high, and low prices, average days on market, etc. And your Realtor will be able to do the same search in the "CMA" (competitive market analysis) area, so that you can get detailed reports not only on what's currently available but how those compare with other properties that have sold, are under contract, or have been withdrawn.

And here's how you might use Zillow in all this. Have your Realtor set up an automated notification system so that any time a potentially underpriced (assessment significantly higher than list price) comes on the market, you're immediately notified. Then go on Zillow and see what the Zestimate is. 

Hope that helps.
  • July 23 2011
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Using Zestimates to identify good investments is risky.  The zestimate does not take into account the neighborhood only the Geographic area. You can have homes in a Gated Country Club or Upscale neighborhood with strict building  and home amenity guidelines near communities without those amenities.   Zillow will use all the homes in a geographic area to estimate value.  Obviously, the Country Club homes and upscale areas  will have a higher Market value than the homes not in the Country Club or upscale neighborhood.  Yet those communities can be less than a mile apart. Prices will vary significantly between neighborhoods. What if the most recent comps are a year old? What if the most recent sales were the upscale homes?  That doesn't necessarily make the home you are considering worth more.

You should enlist the assistance of a Realtor who is experienced in helping Real Estate Investors.  Sales price alone will not guarantee a good investment. There are many other factors to consider.

Give the Agent  your parameters they will do most of the legwork for you.  They can give you a list of properties that can meet your goals and objectives.   If the property is listed, the Seller pays the Buyer's agent's commission . If it's not going to cost you more,  why wouldn't you use a Realtor.

Your Buyer's Agent can keep you from overpaying for that home that has a high Zestimate and low listed price.

  • July 19 2011
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Profile picture for rkevinadams
Thanks Robert. I certainly realize the Zestimate is suspect as is using municipal assessment values, BUT it is VERY helpful in looking more closely at properties using more objective criteria that someone thinks is undervalued. I have seen really whacky Zestimates that are easy to dismiss at first glance when you know the market. I still would like to see them so I can explore those properties more. Thanks for taking the time to respond. Nice Dog !!
  • July 19 2011
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you are wasting your time with your theory, kevin adams. The zillow estimate is only extremely loosely based in reality, so choosing investments that look good based on it versus asking price is about as sensible as using your magic 8 ball to decide. 
  • July 19 2011
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Profile picture for wetdawgs
You can search for properties for sale on Zillow and get a list that includes both the asking price and the Zestimate.  The list appears below the map.     The biggest issue is whether or not the listings are up to date, but you can check that on other sites.
  • July 19 2011
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