Happy New Year! I get a lot of clients that utilize a wide variety of online websites to find houses, get values and stats, etc. But are these websites any good? Is the data accurate? These are valid questions and the answer is not as simple as yes or no.
There are many popular sites that people use. Redfin is a popular home hunting site but is not in all markets yet. Zillow is just about everywhere and at its core is a valuation site.
In general public search able sites that offer for sale listings are only accurate when they pull data directly from the local MLS system. If the site is relying on the listing agent to update the listing then often the information is inaccurate. Some agents may simply forget to pull the listing after it sells. If they have it advertised on a dozen sites the could easily miss one of the sites when they mark the listing as sold. Some agents may deliberately leave the listing up after it sells to get calls from prospective buyers. None of this is bad per se, just inconvenient for the person looking to see what's available online. Using the public access site for the local MLS systems is the best choice when searching for listings. Many real estate companies also have search able MLS on their websites. The local MLS system typically has strict requirements that agents keep the data current. This is what makes it more reliable for actual house hunting.
Websites like Zillow offer much more than just house hunting. Zillow made itself famous with the "Zestimate". This is their own proprietary system of estimating the value of individual homes. My experience with this is that they do not have enough data on individual sales to make a price evaluation on a specific house. They do not know the variables in the pricing equation. What they have is a bunch of numbers from local MLS and county recording records. You can have two identical houses right next door to each other one sells for $200,000 and a week later the other sells for $150,000. What gives? Zillow has no way of knowing the difference in these two houses outside of raw numerical data. Maybe the lower priced house was gutted inside. The $200k unit could have been nicely remodeled. Homes in the entry level and middle market that are solid enough to qualify for VA, FHA or USDA financing can generally fetch a high price than a home that does not qualify for those financing programs. As for county records, they can be inaccurate. Sometimes a home shows up on the county records as a four bedroom house when it is actually a three bedroom house. This is more common locally than many people realize. There are a variety of reasons and usually it is on homes that were built during a busy construction period and in large subdivisions where changes were made last minute on lots and homes. Zillow will not be aware of these facts.
But Zillow is not a bad site. On the contrary, I find some of their data to be quite useful. You will notice I use some of their tools on this blog! The mortgage and median value widgets in my right sidebar are powered by Zillow. The Zillow data is very good for looking at broad market indicators. Looking across the whole of a local market area, such as Clark County, Washington does not require specific individual data. Here we are seeking trends in valuation and general closing and recording data is more than adequate. If one wishes to compare large neighborhoods for valuation differences, Zillow can be very effective. Locally someone living in Orchards are of Vancouver might wonder if they could afford a similar house in Camas, WA. Checking the 98682 zip code against the 98607 zip code on Zillow is a broad enough comparison to at least get an idea of relative difference in pricing between the two areas.
I find that buyers and sellers that utilize these various websites often misread the data. When a buyer is using a loan to acquire a loan for a house, the bank orders an appraisal of the property. The bank does not log into Zillow. A real appraisal is necessary to get a reliable and solid opinion of the market value. The local tax assessed value is also very confusing to many people. Tax assessors do not do a true appraisal. They do not enter the home. They utilize a generalized condition in their market analysis. They also use a cost approach system. The land value is separated out and the structure is depreciated based on condition and useful life. This is done to determine the taxes on the property and is not a reliable source of fair market value.
Overall I think buyers and sellers should use these sites when they are in the preliminary stages of buying or selling a house. These tools can provide insight that may help a person decide whether they are ready to proceed to the next step. Once the decision is made then it is time to trust a local professional to help them find their next house or list their home for sale.
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