Once upon a time there was a home buyer. This buyer was looking to get a good deal on a home. They found an advertisement and called the owner directly. The owner told the buyer that if he didn’t use an agent he would keep the price lower and save them thousands. Excited, the buyer looked up the home on Zillow and saw that it was worth $424,000. The seller offered to sell the home to him for $365,000. “What a deal” the buyer thought and quickly agreed to the purchase. And the SELLER lived happily ever after!
The buyer thought they were saving $59,000, but in reality they LOST $30,000!
What the buyer didn’t know was that the owner was willing to sell their home for $349,000. In fact they had the home listed on the market for a YEAR without anyone expressing interest at that price. This is not information you can get on Zillow. If the buyer had used a Neighborhood Expert, they could have bought the home for a lot less.
Sadly this story is more common than you might think. I’ve written multiple articles on why Zillow is inaccurate. I’ve even seen real estate agents make the mistake of using Zillow estimates when buying their own property. So why are people losing money when they listen to Zillow? The average home buyer and real estate agent are not as experienced and don’t know where to find better data. They put too much trust in Zillow. Zillow is excellent when it comes to marketing and web presence. The shear volume of data makes them seem credible, when in reality they are not.
Where does Zillow make their money? Advertising.
In an interview Greg Schwartz (Zillow CEO) said “The first and largest revenue stream is our Marketplace revenue stream — which includes local advertising from real estate agents, from mortgage brokers, banks, and brokerage firms — which is our largest and dominant revenue stream.”
Unfortunately, that doesn’t help you with your home purchase. Zillow is not looking out for you, they are providing a service for those annoying pop-up ads that bombard you while you’re on their site. So who is looking out for you?
While Zillow’s estimates are generated by incorrect information on a very broad scale, Neighborhood Experts have intimate knowledge about your local area. So they can provide an accurate evaluation. They are also local, so they care about maintaining the value and stability of the area.
Neighborhood Experts don’t make their money from advertising. Agents are paid by home sellers to get their home sold. If the home doesn’t sell, no one get’s paid. Can you imagine if you had to pay your agent every time someone wanted to see your home? They’d over price the house so it would never sell, or under-price it to get more showings. That may be the way Zillow does it, but not Neighborhood Experts.
An average real estate agent sells approximately 6 homes a year. Neighborhood Experts sell more than 4 times that. This experience will give you the assurance you need when making your transaction. You wouldn’t want to use the same agent who may fell for Zillow’s advertising would you?
Any time I hear about another victim of Zillow’s inaccurate evaluations I just cringe. Before you make any real estate decisions goBE Informed! If you’re looking at buying or selling a home in the near future contact us today to talk with your Neighborhood Expert.
Won’t be moving for a while? Get a free Market Snapshot to give you insights into your market. These periodic reports will keep you informed on the changes in your area. Then if you ever have any questions about the market you can contact a Neighborhood Expert immediately.
Don’t fall into Zillow’s trap, make your decisions based on accurate information.
By
Thursday, March 20, 2014
Thursday, March 20, 2014
