But is that always a good thing?
Websites like this are data-collecting and lead engines; they gather information and send potential client leads to the REALTOR® – at least, usually the ones willing to pay for it. The actual goal is to create revenue for the site rather than to facilitate real estate transactions and property sales. Zillow, for instance, offers buyers the alternative of submitting their contact information and connecting with an agent participating in the Zillow Premier Agent program. Sites like Zillow and Realtor.com can be very accurate, because they use a feed delivered directly from a Multiple Listing Service (MLS) for property information. Zillow appears to often have a higher threshold for inaccuracies, and there’s no effective or timely way to correct the problems – other than to open a help ticket and hope someone answers you.
A typical Zestimate error in July 2016 was $14,000. That’s a big chunk of money that makes a big difference when you’re calculating a down-payment and budget. On Zestimate itself, the page shows its own margin of error and percentages of accuracy. For the Florida market, only about 85% of Zestimates are within 5% of the asking price. That doesn’t sound like much on the face of it, right? Except that’s 15% of listings that are off the mark – and that’s a lot of Benjamins. There’s an even larger margin of error for listings which are currently off the market, which is when many people are trying to assess the value of their own homes.
Zillow was founded in 2005 by Lloyd Frink and Rich Barton, a tech entrepreneur and former Microsoft executive who also created the travel website Expedia. Using that same model, Zillow was designed to generate revenue by flipping homes and charging fees, as well as through the interest they charge on home loans. Then, of course, is the advertising and monetization of their website, which makes a lot of money. Lastly, they’re data-collection hubs designed to extract and collate contact information, which is used to basically spam your email and social media with more offers and ‘exclusives’.