Zillow has exited their e-buying platform. Why? Because they relied on their own Zestimate – and guess what, it set them up to lose money.
Their famous Zestimate is not accurate, and never was. This tool was an effort to give a value estimate for every home in the US – and literally every home buyer, attorney, or just nosey neighbor used the estimate to establish a value. But, of course, they only liked it if it was more than they thought. When the homeowner found the Zestimate to be lower than what they expected, they decided “something must be wrong”. These Zestimates only told half the story and corrupted the data.
Zillow wanted to play the role of buying low and flipping houses quickly, but their own algorithms didn’t accurately predict the right level to buy, and they ended up overpaying.
The result? Well, now you have it officially from Zillow – it was a flop.
Savvy real estate agents already knew this, but explaining that a home’s value is not a simple number created by a robot had its challenges. I watched the Zestimate of my own home go up and down like a bouncing ball every week. Really? I don’t think so. It’s not just square footage of a home. Value is complex!
An experienced agent knows how to price a property to sell and how to maximize the value. An app simply cannot. While Zillow is still around and offers some interesting services, agents keep a close eye on the market, house by house. Each is unique and must be evaluated accordingly.