Updated Thoughts On Zillow

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Gratuitous cat picture.

Back in October I had the pleasure of attending FinCon, the financial bloggers conference. While all of the keynotes and smaller presentations were excellent, one of the best parts about FinCon was simply getting a chance to meet a variety of people across the financial blogosphere. And one of my favorite places to meet new people at FinCon was the daily 6am run around the St Louis Arch.

I find that you get to see a very different (and more awesome) side of most people when you wake up before dawn to head out and sweat together for 30-45 minutes. Maybe it’s just me, but the conversations seem more honest and less promotional and you also end up with a very different cross section of people. Among others, I ran with interesting folks like Todd behind The Financial Mentor, Jim from The White Coat Investor, Tanya from Budget and the Beach, and Lauren from Zillow. And it was my conversation with Lauren that provided the impetus for this post.

 

Are You Familiar With Zillow?

When Lauren introduced herself and asked if I was familiar with her employer, it became pretty clear that I have no verbal filter in the pre-dawn hours.

“Yes, I’m pretty familiar with Zillow. Actually we get a decent amount of search traffic to our site for the search term ‘zillow sucks‘.”

Ever the professional, Lauren said, “Tell me more.”

So I told her the basics. About how we’ve got a modest real estate investment portfolio and live in an area with fabulous access to public records, but where prices have decreased and then increased dramatically over the last 5 or 6 years. As a result, I’ve watched our Zillow Zestimates (those are Zillow’s algorithmically determined property valuation estimates) bounce all over the place and haven’t found them to be very accurate.

I told her that in general, we’re a big advocate of every homeowner understanding the basics behind how to figure out a home’s value and that it’s a process that most people should be able to do on their own. And really, since you likely know the details of your own house and your own neighborhood better than an algorithm combined with a database of public records, taking the time to perform market comps yourself will probably give you a more accurate answer than any algorithm could.

When I was telling Lauren some of the specific algorithm weaknesses I had noticed (like our multi-family dwelling being classified as two single family dwellings and how I noticed that our enclosed, underground pool and waterview didn’t seem to be included in the algorithm), Lauren told me something I hadn’t known before. “By adding to our data, you can help improve our algorithm and the accuracy of your Zestimate.”

Now it was my turn. “Tell me more.”

She went on to tell me how you can claim your home on Zillow, and then edit the information fields that Zillow uses in its algorithm. It might take a little time for the data changes to filter through to the Zestimate you see published on the site (and that gets imported into our mint account automatically). “Hopefully,” she said, “that will give you more accurate estimates.”

 

So I Staked Our Claim

I had to set up an account on Zillow, but then I was able to claim our properties and, exactly like Lauren said, edit the details of them.

  • For our primary residence, I added our pool and waterview in the appropriate features fields.
  • For the duplex, which had two entries (one for each unit), I marked one of the entries as multifamily, and the other I emptied out.

The entire process only took a couple of minutes and then I ignored it for a couple of months.

 

What Happened?

In short, the Zestimates got more accurate, but not perfect.

Right now, the Zestimate on our house is sitting at about $20K more than what I peg our home value at. Then again, I always discount my own initial estimates by about $20K because I know that any buyer would take one look at our ugly tile and assume it needed to be completely redone. Zillow wouldn’t have a good way of knowing that, so I’ll give it a pass. (But it’s a great example of how you know the weaknesses and strengths of your own home the best.)

For what it’s worth, our Zestimate used to be almost identical to a house a couple blocks over that is the same size and age as ours, but doesn’t have a pool or sit on a lake, and now it’s not. Which is as it should be. I think editing the data in this case allowed Zillow to give me as accurate an answer as can be determined algorithmically. (At least for now.)

The duplex Zestimate accuracy improved as well, but I think still errs on the high side. Here’s a map of the Zestimates around our duplex now. Ours is the one enclosed by the red square.

duplexMap_formatted

Prior to making the changes and distinguishing the property as multifamily instead of two single family residences, there were two valuation icons for our duplex, each one with a value of about $90K. (Much like the duplex immediately to the right of ours in the image above.) Now we’re down to just one valuation for the property, which is currently quoted at $159K.

From the most recent comparable sales of duplexes, though, this seems a bit high. My own spreadsheet puts our duplex valuation at about $135K* sold with renters in place. (We do have renters – and we even gave them Christmas gift cards again this year.) Duplexes with renters seem to sell for about a $5K premium right now.

So the Zestimate of $159K seems about 18% high to me, but it is definitely more accurate than having two $90K-ish values separately on the units.

 

Final Thoughts

I still think that calculating your own home value is a good exercise and not hard at all. But if you’re not going to take the time to do that, consider devoting a couple of minutes to “claiming” and “editing” your house on Zillow. By making the data on your own home accurate, you’ve at least got a better chance of Zillow’s Zestimate not being wildly inaccurate.

 

* This value will be updated on the January 2014 Balance Sheet.

 

Has anyone else claimed and edited their home info on Zillow? What do you use to value your property?

41 comments to Updated Thoughts On Zillow

  • I love the honest conversation you were able to have with Lauren. The things you can learn when people don’t feel the need to be stubborn! I think tools like Zillow, at their best, will probably be helpful as a starting point or to see if your own estimate passes the smell test. But it will be tough for them to be as accurate as someone who not only knows how to value properties but also has intimate knowledge of the properties, like you with your tiles. It’s good to know that it can actually be made to be more accurate though. That’s definitely helpful.
    Matt Becker recently posted..Traditional vs. Roth IRA: Some Unconventional Wisdom on Which is Better for Young InvestorsMy Profile

  • I claimed my house on Zillow a couple of months ago, but haven’t gone back to try and correct anything. Mainly I wonder about the photos, since our house was a foreclosure when we bought it. It looked terrible. I wonder if I update those, can I expect to see any change in value, or is it purely valued based on the stats and algorithm?

    Thanks for the info!
    FI Pilgrim recently posted..How To Waste Time And Ruin Your Kitchen CabinetsMy Profile

    • Without knowing the details of the algorithm I can’t say whether uploading photos would change the valuation. But I can say that it’s unlikely that the aesthetic quality of the pictures would make a difference… it’d be very tough to write an algorithm that distinguishes an “ugly house” picture from a “beautiful” house picture based on the pixels. And then to scale it to apply to the vast majority of the US efficiently? …

  • Hey thanks for the tip about being able to update your home’s info. We are potentially going to try to sell our former home (which is in a different state and currently being rented) later this year, and it has always bugged me that the photos of the home on Zillow are really old and don’t reflect any of the updates that we did while living there. I am also wondering if better looking photos will play into the price algorithm at all, but either way I think it will help out when we try to sell later this year! Thanks again!
    Dee @ Color Me Frugal recently posted..Talking to Your Partner About MoneyMy Profile

  • We haven’t bothered too much with Zillow – we have our mortgage with USAA, and they have a tool that will estimate your home value that I believe is fairly accurate. But this post has got me thinking, and I’ll probably look into getting on Zillow, claiming our property, and putting in the right information so I can compare what USAA says our house is worth and what Zillow says!
    Kali @ CommonSenseMillennial recently posted..Save More Money in 2014My Profile

  • Zillow has always had a low estimate for my place by about $20k. Right now I think it’s even too low by about $50k. I’ve never tried to fix it though – that’s an interesting idea! I would love to ask them to take the photos down. Despite the fact that I’ve now owned the place for over a year and a half, they still have the listing photos up, so strangers on the internet can see the inside of my home. I don’t really like that.
    Leigh recently posted..Reflections on Home Ownership: 18 Months InMy Profile

  • to tell the truth i had never heard about Zillo until i came across this article
    unfortunately i am based in UK does it have plans to go international?

  • Anne

    Interesting! I’ll have to do this. I don’t think of the mint/zillow number as accurate, but use it as a barometer for how the local market is doing and it being closer to the truth would be nice :)

    • I think it’s usually pretty good when it comes to overall trends for the neighborhood, but the granularity is tough for it to capture when you have really nice areas in the same zipcode as less nice areas, for example.

      Give it a try, though – and let us know how it turns out!

  • Cool post! I haven’t yet claimed my house there, but will do so to get a more accurate number, as we still use zillow in our net worth estimates. I figure there’s no real harm in doing so — we won’t be using the zestimate to determine whether it’s time to retire.
    Done by Forty recently posted..Budget PornMy Profile

  • I did not know that you can do that. I know that many people look at Zillow to see how much a home might be worth when they are looking to buy. If you can get your home value to increase, then you can prepare more people if they were to look at your home when/if you sell it.
    Grayson @ Debt Roundup recently posted..How To Make More Money – Ways To Earn Extra IncomeMy Profile

    • I don’t think you’d want to put inaccurate information on there just to game the system. I did notice one home nearby that seemed mis-priced actually had the “pool” field selected even though the words in the listing were “room for pool”. If someone was searching for a pool home and found one with “room for a pool” they might be kindof annoyed.

  • Thanks for sharing, I actually had no idea that you could claim/edit your home information. I like to search zillow and play around on it, but I agree with you regarding their valuations. I always figure it’s a “give or take” a few thousand dollars, depending on the overall price and market.

  • Zillow has our home about $30K overpriced in my opinion, but I haven’t claimed it and tried to change anything. We don’t intend to sell for a long time, so I don’t know that it makes much difference at this point. I think recent sales in the neighborhood are a better indicator. It seems you can command a high price if you are willing to wait long enough. We had one neighbor whose house was listed for about 3 years. He eventually took a much lower offer than listing price, but it was so overpriced that maybe that was the plan? I can’t imagine keeping things that clean to show for 3 years!
    Kim@Eyesonthedollar recently posted..Legal Marijuana in Colorado: What’s It Cost To Get Stoned?My Profile

    • 3 years is a long time to wait, but we’ve got a neighbor who has done the exact same thing. His home has been priced the same for 3+ years, it just took a giant increase in the market to catch up to his price. The house finally went pending over the holidays and all the neighbors can’t wait to see what it’s actually going to sell for.

  • Thats so interesting. I didn’t know you could do that at all. Thats pretty cool. Thanks for the info!
    Debt and the Girl recently posted..Blogger Spotlight and other UpdatesMy Profile

  • B’s not a fan of Zillow based on the premise you told Lauren, but I’ll tell him about the editable feature – thanks Mrs. PoP!
    anna recently posted..Wedding update – two month countdown!My Profile

  • Well I don’t know too much about zillow (zillow, not pillow spell check), save for the searches I did for “fun” in the area I live in, which had me weeping in a pile of tears in no time flat with what it costs to own here, I don’t have too much experience. It would seem that you shouldn’t rely on it to be a perfect science. However buyers and renters might be which could be a problem. I think it’s great you can edit your own info in. Makes sense to me. BTW I agree on the 6am run candidness. It was nice to be done with exercise just as everyone else was waking up. :)
    Tonya@Budget and the Beach recently posted..Adventures Around the World: Life as a Travel Club OrganizerMy Profile

  • That was pretty awesome to hear that Lauren wanted to learn more about what the issue was and how to potentially fix it. It’s nice to know some companies are still wanting to make their product work better for the end consumers and not just maximize their profit.
    Micro recently posted..2013 spending in review and 2014 budgetMy Profile

  • I forgot about Zillow because I haven’t needed to check it out in awhile. We bought our current house almost 3 years ago so the information is pretty accurate and so is the zestimate! Thanks for sharing the tip! :)

  • I think it’s great that you’re trying to give zillow a second chance, but I agree with your first evaluation: Zillow sucks. It’s not just the zestimate, because anyone should know not to trust some odd website to appraise your home…it’s actually that when searching for a home, zillow does not update as frequently as other sites. I found estately.com (a much less known but much more frequently updated) home-buying website) to be much more helpful when home-searching than zillow’s outdated info. (Estately updates every few hours, so we were always up-to-date on new listings by using estately over zillow).
    Becky @ RunFunDone recently posted..Seattle Half Marathon 2013My Profile

  • Thanks for sharing this information. I was unaware claiming your house was an option. We will be doing that soon with our home and rental properties.
    Brian @ Luke1428 recently posted..Some Unforeseen but Realistic Drawbacks to Chasing Your DreamMy Profile

  • So doing this! After we bought our house (for well below market value, of course), Zillow updated the value to be what we paid….booo! Thank you for this information!
    Retired By 40! recently posted..2014 Budget!My Profile

  • Very interesting, when we were house hunting a couple of years ago I was addicted to using Zillow to check the prices of homes in our area. I’ll have to “claim” our place and see if it changes the value at all. Right now I think the valuation they’re giving is a little high.
    KK @ Student Debt Survivor recently posted..You Need an Emergency Fund When Your Furnace DiesMy Profile

  • I’ve claimed my property and it is pretty accurate, although on the high side as well. I haven’t been living there for two years so I am a bit out of what comps sell for but at least the number has gone up since I bought.
    Pauline recently posted..Make money with New Year resolutionsMy Profile

  • Travis

    I claimed my house back in November and added some extra information on it (construction type, flooring, etc). On Dec 01 Zillow sent me an email with an update saying my home value jumped up $7,600 to $287k. That still seemed a bit low to me, but it is difficult to get comps in my state since sale prices are not public information. From what I have seen in the area, I figured my house was currently worth just shy of $300k. Then on Dec 23 they sent another email showing it was up another $6k to $293k. Now I just looked and their estimate shows $297k. So, it looks like their estimates are getting much better. That’s right on the nose of my guestimate at $120/sq.ft. Houses built +/- 1 year from mine are asking about $125-135/sq.ft. for similar sizes. So, about $120/sq.ft. seems like a pretty safe guess for actual sale price.

    Not sure if my updates helped at all or if they were just getting better at the time since I checked some of my neighbors’ houses and they are up as well. The house right next door to me shows a $24k+ jump over the last 30 days (they have a full finished basement). Prices aren’t really going up that fast in my area, so I am assuming it is Zillow getting better with their estimates.

  • Very interesting read.

    My problem with the national real estate sites (Zillow, Trulia, etc.) is that real estate is such a local thing.

    There’s no way they have the perspective that a local agent can have.

  • Hmm, interesting! I didn’t know that you can help Zillow’s algorithm by claiming your property. I think I’ll check it out sometime soon.
    Lisa E. @ Lisa Vs. The Loans recently posted..14 Ways to Improve Your Finances in 2014My Profile

  • […] Planting our Pennies: Mrs Pop talks about how to get a more accurate Zillow home estimate in her post Updated thoughts on Zillow. […]

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