Since its inception, the Zestimate has always been clouded in controversy. When browsing Zillow, a popular real estate website, home owners and potential home buyers are presented with a “Zestimate” of a home’s potential value. The Zestimate is an internally calculate Zillow “estimate” of what a home is worth. Although Zillow provides a disclaimer indicating that the value is automatically calculated, and only an estimate, many home owners and buyers have begun to inaccurately accept and rely on this number as a guideline in property negotiations. Since the Zestimate is an automated valuation calculation, it inherently lacks the precision and accuracy necessary to determine the true value of a home.
Real estate lawyer sues Zillow, calls Zestimate a ‘tremendous roadblock’ to selling her home – GeekWire
Barbara Andersen says Zillow’s “sloppy” Zestimate is making it difficult to sell her Illinois home. Zillow is often approached by homeowners complaining about their Zestimates, and now one is taking to matter to court. She isn’t seeking any financial compensation but is asking the court for an injunction that would require Zillow to either remove or modify the Zestimate of her property.
An interesting side-note, is that Ms. Andersen isn’t asking for money, but appears to seek action on her home specifically. We have not read the lawsuit yet, which can be found at Courthouse News, but it appears that any resolution will be limited to this specific circumstance. Inaccurate Zestimates, however, are a problem that will continue to plague many real estate transactions. The article continues:
Provocative is a surefire way to draw eyes to your site — crucial for any online ad-supported business — but it does come at a price. Zillow is often approached by homeowners complaining about their Zestimates, and now one is taking to matter to court.
Barbara Andersen, a real estate lawyer in Glenview, Ill., claims in a lawsuit filed in Cook County Circuit Court that Zillow’s Zestimate is making it difficult to sell her home. She isn’t seeking any financial compensation but is asking the court for an injunction that would require Zillow to either remove or modify the Zestimate of her property.
“Since the recession, Andersen has been attempting to sell her home on different occasions. However, a tremendous roadblock to same has been the fact that Zillow posts a ‘Zestimate’ of person’s homes without their permission, consent and/or any license to do so,” says the complaint, spotted by Courthouse News. “An estimate is effectively a sloppy computer-driven appraisal of the home.”
read more at geekwire.com
The problems with Zestimates, or any other automated valuation method, are based in the non-homogeneity of real estate properties. The Zestimate cannot tell you the value of any upgrades to a home. Furthermore, the Zestimate does not have access to real time data that may affect the valuation of a home. Only a licensed real estate agent and appraiser can help you ascertain the probably value of a home. This is especially true in the luxury real estate market. Even the Zillow executives place little value in their Zestimate. Last year, Spencer Rascoff’s home famously sold at 40% below its “Zestimate” of $1.75 million, which is roughly a $500,000 discrepancy between what Zillow said the home was worth, and what the market dictated that the home was worth.
Luxury homes, and homes in Las Vegas have even more varying discrepancies. Designer upgrades, combined with a rocky market over the last few years make it difficult to predict a home’s value without physically visiting the home, noticing the building materials, and taking in the view!
If you are thinking about buying or selling a Las Vegas home, and want to know what the market conditions look like for your unique home, please don’t hesitate to contact us!
What do you think? How accurate is the Zestimate on your Las Vegas Home?