When I wrote this post about the decision to list your house for sale on Zillow five-plus years ago, I never imagined it would be the most read article on this web site. A dozen years give or take since Zillow first arrived on the scene and it remains one of the most talked-about real estate websites, for both good and bad. What’s best for you and your house? Read on …
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No, Mr. Seller, I didn’t list your house for sale on Zillow. There’s a simple reason for this. How would you feel if on the for sale sign on your yard, I added a rider that said you were asking $25,000 more than the home is “worth” according to a website. Do you think that might cause some issues for you and buyers’ perception of your property? Do you think maybe a buyer walking in the front door already will have in mind that your property is worth less than you believe and I know?
Would I be fulfilling my fiduciary responsibility to you if I intentionally marketed your home in such a way as to make it more difficult to sell?
Zillow itself says … “Armed with an understanding of how the Zestimate is calculated and the Zestimate Data Accuracy table, you can explain – and show Zillow’s own accuracy numbers and talk about why the Zestimate is a good starting point as well as a historical reference, but it should not be used for pricing a home.”
I only get paid when your house sells and it’s my fiduciary duty as your REALTOR to get you the highest price the market will bear. I can’t do that by intentionally sabotaging the marketing. And that’s what I’d be doing if I blindly decided to list your house for sale on Zillow.
List Your House for Sale on Zillow Sans Agent
No, Mr. Seller, I wouldn’t recommend listing your home and selling it yourself. And no, Mrs. Seller, there is no cost to list on Zillow but it still can cost you thousands.
While not rocket science, selling a home is one of those things that can be done just fine by an individual until everything goes to hell in a hand basket. As a REALTOR and member of the Arizona Association of REALTORS, I use pre-approved forms that provide my clients, buyers and sellers both, levels if protection not found in state statute. This is even more crucial with the latest changes, which says all properties are sold in As-Is condition. It also is important because the contracts deal with Arizona law, not national generalities like you’ll find on the generic online forms.
True, you might save yourself some portion of commission costs. I saw a portion because, generally speaking, commissions are paid out of the sellers’ proceeds – this is why most people decide to skip the agent to “save” a few sheckles. One of the trade offs is real estate agents won’t see your property because, as a rule, we rarely check Zillow for listings. Why? Because the data is far from complete, for one, and because most of us don’t have our buyers coming out of pocket to pay a commission. (Side note – we rarely work pro bono.)
Costs of going it alone
We can debate the pros and cons of such a system, but that’s the general expectation in our market. REALTORs often work with buyers who save just to cover a portion of their closing costs and certainly don’t have the additional cash to spare to cover what usually is a seller cost, the commissions. Because buyers generally have some sense of the process thanks to the internet, most realize how truly insane it is to purchase without an agent given the thin protections afforded buyers in Arizona statute.
So you’re probably going to have to work with an agent anyway and likely will pay the buyers’ agent their commission. And you will have no one representing your own fiduciary interests as you negotiate with someone who has sold dozens if not hundreds of homes in their career and likely knows the ins and outs of the sale better than you do. But it’s okay – you saved a few bucks, though it leaves you unrepresented and fairly unprotected.
More on Zestimates
One argument you often hear from fans of Zillow, especially in light of recent arguments about the role of third-party listing sites, is that sellers will be disadvantaged if their homes are not listed for sale on a site that gets bajillions visits a day and even trades on NASDAQ.
My question is, do those bajillions of eyes on your listing really help when the site is actively doing all it can to prevent you from selling?
Below is a screen shot of a Comparative Market Analysis for non-golf course, single family detached homes in Westbrook Village (you’ll need to click on it for it to be anything close to readable, unless you’re using a 50-inch monitor).
Based on the market averages, such homes are selling for $92 a square foot and change at the moment. We’re priced competitively at $87 a square foot.
But here’s what happens when I enter this listing onto Zillow. The sales price appears at the top in nice red lettering. And right below it is Zillow’s blessed Zestimate, which approximates the value of the home 20 percent below the prevailing market value.
You read that right … an incorrect valuation, 20 percent below the going market, listed right below your sales price.
Good luck with that sale.
Reality vs. Perception
Those of us who actually sell homes for a living long have known Zillow is little more than a toy, a Magic 8 Ball of sorts where buyers and sellers go to ask what the value of a particular property and might be and, every once in a while, a valid price will come up. More often than not, though, the values given are wrong.
What makes that particularly galling is, in an area like Phoenix where tract homes are the dominant force, finding the comparative market value of a home is a relatively straight forward task. In the vast majority of cities and subdivisions, across the board averages hold fairly well because the homes just aren’t all that different, aside from possible interior upgrades (or exterior differences such as a pool, a third garage bay, etc.)
Yet even in the simplest possible market in which to estimate value, Zillow fails.
Real estate agents know this. At least most of us do – those who pay Zillow to allow them to advertise on their site either don’t know or don’t care as long as they can snare some buyers along the way, then shock them with the market’s true values.
The problem is the public is blissfully unaware that the Zestimates have no meaning. Buyers look at those numbers as a sort of validation for their own views of the market, even when those views happen to be incorrect. Many buyers end up never purchasing because they’re too busy wandering Zillow’s land of make believe to really take a hard look at what’s going on.
Better not to list your house for sale on Zillow than intentionally shoot yourself in the foot.
Capitulation is Not an Option
When I get on my soapbox to rail against agents who believe capitulation and appeasement with Zillow and Trulia are inevitable and necessary, this is why I am doing it – for the sake of the buying and selling public who are being sold a bill of goods without realizing it’s happening. Any agent who blindly decides to list your home for sale on Zillow without taking into consideration market and site conditions is doing you a disservice.
If we as real estate agents won’t fight for what is correct, for what is right, then what really is the point of being in this business?
It would be much easier as a listing agent to tell a seller their home will be on Zillow; other agents will do so in their listing presentations and sellers will listen to the “lots of eyeballs” argument (not much different than believing heavy foot traffic in an open house means a lot, which it doesn’t) because it’s much easier to grasp than the details of why Zillow is fighting against their sale.
But it wouldn’t be correct. It wouldn’t be right. And that’s why it’s not going to be part of my listing presentation. End of story.