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Written by Diane Beck
Zillow is a website that consumers can shop for real estate. It is the fastest growing, and currently has the largest number of consumers in the country. If you are a home buyer and shopping for a home they have an app for your smart device that will automatically update all surrounding homes for sale in the area when you drive into a neighborhood. That's very cool and consumers love that feature. Trulia and Realtor.com currently have the same app, but buyers love Zillow.
Multiple Listing Services (MLS) across the country have created partnership agreements to share their data with these services, which is good for the consumer. However, most recently many of the largest MLS's in the country have cancelled their agreements for many reasons. First of all- the information is not always accurate; secondly the agents that pay Zillow or Trulia the most money are the "Featured Agents" or "Premier Agents" on listings that actually belong to another listing agent or company. They have included fine print indicating the Listing Office or Agent, but you have to really look for it.
The "Zestimate" has become a household name with many. Unfortunately in Montana that is not an accurate estimate of value of real estate. Montana is a non-disclosure state which means that sales price information is NOT available to the public. Most other states do allow this information to be reached by consumers. Zillow's "Zestimates" are simply the current tax appraised value of the home, which is public record and most often times is NOT accurate.
The good news — if you are one of the 90% who want to search online for a home you have many choices to search. Find the one that you like to use and stick with it. All listings should be featured on every site. If for any reason they aren’t there I would suggest not using that site for your home search.
The bad news — if you are thinking of selling your home and want an estimate of current market value, the Zestimate is of no value to you. You can get the same number by pulling up your tax information and finding the current appraised value, which as I said is simply the current tax appraised value. To receive the best results in what your home would sell for in the current market will need to call a real estate professional to obtain your Current Market Analysis. The Current Market Analysis is based on the most recent homes that have sold in your neighborhood along with the active listings that would be in competition with your home.
Here's a great example:
This home's market value is right about $200,000 based on the most recent sales and active competitive listings. The "Zestimate" on this home is $260,000. It would appear that this house is a "screaming deal" and should be sold by now, but it's not.
The Zestimate puts a false sense of the home’s market value in the owner’s mind, which can create problems with those looking at the home.
It will be interesting how this "game" unfolds in the next few years.
