Profile picture for Unknown18

Zestimate should be renamed to BSestimate or Gestimate

The Zestimate's is so amazingly inaccurate it should be renamed to BSestimate or Gestimate.  I can accept that they have not seen my home to do their calculation.  However for them to provide a number where the home is $59 per sq ft less than the average they list for the area is negligent.  My home is 50-100 years newer than surrounding homes and my property tax assessment is more than double the surrounding homes.  They have this information so it would stand to reason that my home would be priced above the average sq ft price.
  • January 12 2010 - US
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Answers (16)

Profile picture for Unknown18

That's rich discounting the only real indicator of market value aka actual sales as irrational behavior to continue the irrational belief that the zestimate is not grossly mistated. 

BTW the difference in the selling price of jeans sold by different retailers is not irrational buying behavior.  The difference is the percieved value of the product and service including the buying experience.  When someone buys a pair of jeans at walmart they are paying for one type of buying experience either knowingly or unknowing.  That is low price and expected little service including running the register aka self checkout.  At Macy's the shopper is not expecting the lowest price but is expecting a higher level of customer service.  For example one may be looking for help putting together an outfit.  This buying behavior is not irrational by far and I am not judging either shopper.  This is just how sales work. 

  • January 23 2010
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Profile picture for Blue Nile
And just as many that sold for that much more.  It is a "curve fit", and people's buying behavior is not rational, and cannot be predicted by a simple curve any more than you can determine who will be elected by polling only two people.  But just as politicians are foolish not to poll, it is also foolish not to track the market with similar statistical analysis.

Don't believe that buying is "irrational"?  Then why does the exact same pair of jeans sell for $7, $11, $19, $27, $52, and $115 depending on where you buy it, and who is doing inventory clearance?
  • January 22 2010
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Profile picture for Unknown18

PMSoldier the problem with zillow being so grossly wrong is some people in the market are being misled as to the value of homes they are looking at frustrating both the buyers and sellers.  The information is also being used by the media painting an inaccurate picture of the market.  Their inaccuracy is not limited to waterfront.
Here are some more.

4215 173rd Street Ct N East Molien IL 61244
10/6/09 sold $360,000
Zestimate 1 day prior $235,000
$125,000 53%

17397 N Estrella Vista Dr Surprise AZ 85374
11/12/09 sole $435,000
Z estimate 1 day prior $350,000
$85,000 24%

  • January 22 2010
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Profile picture for sunnyview
Waterfront again...Oh the humanity.!?!
  • January 22 2010
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Profile picture for CubsfaninWA
How wonderful, another waterfront property!

What is it with people and waterfront property?

Zillow hasn't harmed your value, stole money from you or prevented your property from being sold.  It is an estimate, check out pasadenan's explaintion of how they got it (he's the stat guy and understands it better than anyone I think).

From your postings I would gather that your home is the nicest on the block.  The surrounding homes is what is causing your ESTIMATE to go down.

Zestimate's aren't appraisals.  They have no effect on your home.  It is a useful tool to see how home values in a specific area are moving but to pinpoint an exact amount and go "Your home is valued at $X with 100% accuracy" it ain't.  Heck an appraisal ain't that.

Want to change your Zestimate?  Claim your home, input your Zestimate and place a "Make Me Move" amount on your home.  This will shift Zillow's Zestimate toward the bottom of the page and will be harder for someone to find.
  • January 22 2010
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Profile picture for sunnyview
I would not take a free haircut and hair grows back so why would anyone ever stop asking questions about their home value with one number Zestimate posted on a free website? Personally, I don't use the Zestimate, I use the other trend and Zindex type information because I find it to be more accurate in tracking value over time. 

Automatic Valuation Sites (AVM) are not going anywhere and they preexisted Zillow in lending circles. I think the key is taking them for what they are and learning how to make your own assessment of value. That is the only way short of hiring a professional to really get a handle on your home's value in my opinion. Owners and buyers would both benefit from doing that.
  • January 22 2010
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Profile picture for Unknown18

Pasadenan I checked those other sites and their numbers are fiction too but just because Zillows peers suck too is no reason to claim victory or that Zillows numbers are anything but fiction.  BTW here is yet another example why it should be renamed to BSestimate and the media should stop useing zillow as a source.

38813 N Kelley Rd Sping Grove IL 60081
5 beds, 4.5 baths, 8,000 sqft

Sold on 12-11-09 for $1,550,000
Zestimate 1 day prior to sale $850,000

That gives an error of $700,000 (82%) ! So tell me again how good this zestimate is.

  • January 22 2010
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Profile picture for Unknown18
Maybe I wasn't clear the 57.7% increase is what zillow had listed as an increase in zestimate over 1 year.  The property's value has always been understated on zillow zestimate by 100's of thousands.  Yes it is understandable that zillow had a wrong value for the 1st year of build but now its going on year 3 and the tax records have caught up.  At this point I would have expected zillow to be at least within 100k of the lowest of 4 independent assessors.  I would only expect error like that on multimillion dollar properties. 
  • January 13 2010
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Profile picture for Blue Nile
If you don't like Zillow's estimate; there is Cyberhomes.com, and Eppraisal.com.

What 1948 has to do with today's estimates; I have no idea.  But as far as "premium views", they are factored into the curve fit with two different independent variables in the curve fit.  The first being the last sold price/date.  If it is a premium view, the property would have sold for more than other similarly sized houses with similar lots, bedrooms, baths, etc.

The second is the tax assessor value.  If the premium view adds taxable value beyond the structure and the lot; it will be part of the assessed value that is used in the curve fit and estimate calculations.


So you claim your house estimate went up 57.7% in one year, but that it is valued substantially below the similar homes in the neighborhood?  Sounds to me like you played games with the tax assessed value when you bought, and that the apparent increase in value is just the "correction" for your under-priced reporting.  But since there wasn't a structure on the property when you bought, the most likely reason the estimate went up is the change in the tax assessed value in the public records, and the change in the # beds, baths, etc.

Again, unless you give all the numbers for all the units used in the curve fit, and all the numbers in the county records for your specific property, there is no way to single out the specific causes.  And it is irrelevant. The "fair market value" at any given point in time is only what someone will pay you for it; and since you are not selling, there is no way to determine what someone will pay "today" or "yesterday".  Sure, you can pay for an appraisal, but it is still a dated estimate that makes major assumptions.  Sure, you can ask 20 Realtors each for their CMA for the property, but they still have to base it on recent sales in the area, and make assumptions about what people are actually paying for.  The "view" doesn't have a specific value, any more than a painting at an auction.
  • January 12 2010
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Profile picture for workabee
Zillow's a media company. Don't like what they have to say, stop complaining, turn away from the light and get your information from another outlet. That's how America does it.
  • January 12 2010
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Profile picture for Unknown18

So what your saying is that I should compare Zillow's price on my home to the Chicago Tribunes November 3, 1948 headline "Dewey defeats Truman".  Both used bad assumptions to come to an incorrect conclusion.  Looking at the 9 factors that are listed the last sold price would make the result wrong because it was for a blank piece of property.  The "vicinity" used is flawed because it does not take into account view premiums.  The list goes on but basically unless your home is in a cookie cutter vicinity with frequent sales the zestimate isn't worth squat.  If you disagree explain how could my property have gone up $185,000 (57.7%) for the year when properties in the zip code are -11.8% and -6.4 for the county.  Basically the Zestimate was a BSestimate and still is wrong today.  It is just a shame that media people are quoting zillow.

  • January 12 2010
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Profile picture for Blue Nile
Estimates are recalculated 3 times a week with "recently sold" data.  If a Realtor incorrectly marked a property sold... or if one of the companies that Zillow PAYS to provide public record data to them makes a mistake, it takes a while for the mistakes of others to be corrected.

Besides, small sample size of what sells in an area can easily cause those kinds of fluctuations in the estimates; but when averaged with several, the fluctuations tend to cancel out.

Yes, a "sold" price in the right ballpark for property being "estimated" will make the estimate almost exactly the "sold" price, since the curve fit is to the "recently sold" data and that would mean the sold price is right on the curve fit results...  If it didn't sell, the data would eventually be corrected, and the curve fit calculated 3 times a week would eventually be more in line with what really did sell in the area, which could be $60k less than presently estimated.
  • January 12 2010
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Profile picture for runprn
I have a follow-up question. Earlier this month, Zillow incorrectly flagged our house for sale. The listed selling price was the original selling price from about two years ago. Values in my area are going up, not down, mainly due to a lot of new construction on teardown lots. Although this error has been corrected, Zillow now displays that bogus selling price as the Zestimate value for our home -- nearly 30K less than my last Zestimate email notification in December. Why is that?
  • January 12 2010
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Profile picture for Blue Nile
No, it doesn't "blindly" do anything!  Simply, it first finds the recently sold in the vicinity (not "neighborhood" as you would define it, but a distance that is larger for rural areas, and shorter for dense city areas.)  Then, it does multiple-linear regression on those "sold" price numbers using the county record info:
1) Sq ft of housing unit
2) Sq ft of lot
3) # bedrooms
4) # bathrooms
5) # stories
6) year built
7) tax assessed value (adjusted per local rules)
8) last sold price/date
9) covered parking (if in county records)

Then, with the resulting equation, each of the "recently sold" is tested against the calculated result.  If the numbers are "way off", those sold unit are discarded from the calculation, and new coefficients are calculated.  This process may be repeated.

Once the coefficients are determined, the resulting equation is used to calculated the "estimate".  Without having the specifics of the "sold" units in the area, you would be hard pressed to tell precisely which variables were affecting the resent sales, how much, and in what direction.  If the older homes sold in the area had historic merit, and it was affecting the amount offered, then it would affect similar homes in the area.  That is not "blind"; it is just how statistics work.

The numbers are NOT "appraisals", but it doesn't make them "invalid".  Consider polls....  They don't determine the outcome of an election; they are only a tool to measure effectiveness of political campaigns and if strategies need to be adjusted.  One would be very foolish to poll only 2 people, and then declare the outcome of the election.  But a politician would be very foolish to not do the polling and to not adjust accordingly.

Use "statistics" for what they were intended for, and stop trying to read something into them that was never there to begin with.
  • January 12 2010
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Profile picture for Unknown18

I've read the methodology and expected it to be some what flawed but not this bad.  I looked at many more varibles than the average price per sq ft, age of structure and property tax assessment.  Those are just the simplest to put into a formula driven price guess.  If the Zestimate blindly considers homes that are 50-100 years old as having "historic merit" then that may be the problem with the formula that has it so wrong.  The other structures are tear downs owned by retired people that don't have the money to build new and once the homes change hands (excluding being rented out) will be teared down and built new.  The homes were not designed by anyone famous, lived in by anyone famous nor do they have unique features.  The value on them is in the land.  The higher priced ones are lakefront the lower are not.  Plain and simple.  Mine is lake front.  The previous house burned down in the 70's and I built new.  The price I paid was more because I did not have to tear down and cart a way one of these other homes that zillow gives a higher sq ft and you are referring to as haveing historic merrit. 

  • January 12 2010
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Profile picture for Blue Nile
If you read the methodology, you would know it is not "negligent"; it is simply a least squares curve fit, also known as "linear regression".  Look up the LINEST function in your Excel program and especially look at example #3 "multiple linear regression".

Square feet of the structure is NOT the only thing considered.  There are 9 independent variables that are looked at!  To only talk about one shows that your are being negligent.

As for your home being 100 years newer; then you obviously have no "historic merit" to your structure.  And historic merit can add substantial value; but that again is only one variable of 9.

And again, tax assessed value is also only one variable of 9.  In areas where there are caps on assessed value, a correction factor is applied prior to using the variable, based on purchase date and the cap rules of the area.

It is already labeled a "G-ESTIMATE"; that is what "Z-estimate" means!

If you are unfamiliar with the use of the word "estimate" you should look it up in a good dictionary.  An "estimate" is not a "quote", in spite of the misuse of the word by the automobile repair industry.
  • January 12 2010
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