website and trying to be a one-stop real
estate shop for consumers. But it’s the
listings that seem to attract most visitors
to the site.
Yet, websites like Zillow, Redfin and
Trulia (which has been owned by Zillow
since 2015) have a striking problem: Not
all listings in the market are actually on
each of their sites. Some of the listings
are outright missing, and I have even
seen homes listed for sale that have al-
ready sold. This is why real estate agents
frequently squash the joy of buyers after
they find that perfect house: Sorry, it’s
in contract — even though Redfin says
it’s available. In our area, real estate bro-
kerages have to opt in to share informa-
tion. I would say the bulk of them do, but
missing a few listings here and there can
make all the difference for buyers when
What about the accuracy of value?
These real estate websites are hit-and-
miss. Sometimes, they’re spot-on, and
other times they’re easily off by 10-20
percent or more. On a practical level, we
can’t expect these sites to be accurate be-
cause they don’t know the condition of a
home or whether it’s been remodeled or
not. These sites don’t know if 57 cats live
there (sorry, cat owners).
Regardless, sellers still tend to say,
“I know Zillow isn’t perfect, but I believe
my house is worth that amount.” In other
words, sellers get emotionally tied to the
estimate and give it real weight. It’s not
just a ballpark figure: To them, it’s con-
crete and written in stone, and sellers
may struggle to budge from the number.
Likewise, buyers sometimes wrestle with
offering more on a property if Zillow’s
Zestimate is lower.
What does a site like Zillow say about
its own accuracy? According to the com-
pany, in California its median error rate
is 4 percent. That sounds pretty impres-
sive, but this is the “median” error rate,
which means Zillow is basically within
4 percent of the sales price only half the
time. Does that reek of accuracy to you?
But there’s something more we need
to understand. Zillow states that “Zesti-
mate accuracy is computed by compar-
ing the final sale price to the Zestimate
on or before the sale date.” Let me ex-
plain why this matters.
Imagine a property listed for
$380,000 and the Zestimate was also
$380,000. But then after a series of price
reductions, the home sold for $350,000.
That would be 8 percent lower than
the original Zestimate. That’s not very
good, right? Well, now imagine as the
list price was reduced, so was the Zesti-
mate, and the most recent Zestimate was
$353,000, which is only 1 percent higher
than what the property sold for. Here’s
the kicker: The home may have sold
for 8 percent below the original Zesti-
mate, but for its accuracy rate Zillow can
claim 1 percent because it uses the most
recent Zestimate instead of the origi-
nal one. (It’s amazing how we can use
Two closing tips:
Definitive source: Zillow, Redfin and
Trulia can serve as a relevant tool for
home shopping, and these websites
have a place in real estate today. I
recommend using them, especially
since they’re easy to navigate. But
consumers ought to look to their lo-
cal MetroList (Sacramentans, check
metrolistpro.com) to ensure they see
Grain of salt: Sellers and buyers too
often get hung up on digital values.
My advice? Don’t make that mistake.
Don’t let yourself become emotionally
tied to the number. Listen to your real
estate agent’s pricing advice, and be
sure to pay close attention to similar
properties in your neighborhood that
have sold or are on the market.
By the way, a few years ago Zillow’s
prior CEO listed his home for sale, and it
ended up selling for 40 percent below the
Zestimate. What does that tell you? n
Ryan Lundquist is a certified real estate
appraiser at Lundquist Appraisal Com-
pany. Read more at sacramentoapprais-
alblog.com. On Twitter @SacAppraiser.
and Trulia have a
Not all listings
in the market are
actually on each of
Questions on the
real estate market?
April 2019 | comstocksmag.com