What did we do before Zillow came along? Remember when people had to rely on Realtors to tell them how much their houses were worth? And weren’t able to download values in a matter of seconds?
I’m sure the techie-types who started Zillow thought they were making the real estate process more transparent when they unveiled their elegant platform to crawl the web and tap into troves of public record information. Best of all, their algorithms were designed to analyze all that big data in a heartbeat and deliver instant gratification to anyone who was interested.
In the first crush of social media in the mid 2000s, people somehow took it on faith that information on the internet was free. And because it was free, it was more accurate because it wasn’t coming from people trying to sell things – like real estate agents trying to sell houses. Thus, the ubiquitous meme of the Zillow Zestimate was born.
Fifteen years later, the age of innocence for social media Is over. Darker truths are becoming more apparent. We are revising notions about what “free” really means and how easily information can be manipulated into “fake news”. Specially when people accept the false promise of random “facts” at face value and don’t bother spending enough time gathering context.
I’m thinking about a text I got a few weeks ago from a buyer interested in a place I had just put on for $849,000 four days earlier. It said: “Your new listing looks great! Let me know when it gets down to the price that Zillow says it’s worth and I would really be interested in seeing it.”
Really? When I looked up the Zestimate it was $747,000, even though it had just received 7 offers in those first four days and was already in escrow for $900,000! He didn’t believe me of course, and I confess I didn’t try overly hard to convince him.
So much for Zillow. And chalk up another bad case of Buyer Disconnect. Fascinating that people would trust an algorithm more than a person. But that seems to be the state of the world these days. Has anyone seen the recent spate of commercials Facebook is running? Thirty second mea culpas acknowledging the wrong turn they took along the way.
Zillow is a huge corporation that’s publicly traded on NASDAQ. It was sued not long ago by a disgruntled homeowner who said that a Zestimate had torpedoed his home’s value. Zillow also just announced that it will start buying and selling homes through a new program called “Instant Offer”. Somehow, that just doesn’t sound like a good idea to me.
Next: Why Zillow isn’t accurate.