When I saw that Zillow had unveiled a new Owner Dashboard yesterday, I was personally thankful for the timing.
Had an initiative like this been unveiled last summer, you see, I might still be looking for a home to buy instead of comfortably settled in the perfect place. Because the previous owners of my house might have heard about the campaign, claimed their home and thus put it permanently out of my reach.
Am I exaggerating? Here are the facts.
The house: the details
This is an impossible home to Zestimate. I’m sure every homeowner feels that way. But my loan officer and listing agent both confirmed the difficulty of finding comparable sales at the closing, commiserating together.
Why?
1. The location. I live in a tiny town in the mountains of Colorado, and most of the homes around here have Walk Scores of 0. Mine is 70.
I actually put an offer on a house with a score of 0, so that wasn’t critical to me, but it’s certainly nice to be within walking distance of:
- A small market/grocery store
- The post office
- A gas station
- A park
- A hardware store
- A laundromat
- Several restaurants
- A liquor store
- A dispensary (this is Colorado, after all)
- A trailhead
- Several gift stores
- A Sasquatch museum
Zillow definitely knows what the Walk Score of this home is, but I’m not sure if the Zestimate algorithm accommodates for rarity — this is one of a very small percentage of homes in the ZIP code (significantly under 1 percent, I’d guesstimate) with a Walk Score this high.
2. The lot. My lot is 80 percent flat, making it an unusually functional lot for the area, which tends toward the sloped-and-rocky. It’s also waterfront property — I have a creek running through the front. That’s not very common in Colorado, either. (And yes, there are plenty of fish.)
3. The build. This home was built by a master carpenter and experienced contractor who’d lived in another home on the lot for decades. He built this home to retire in, then fell in love with someone who wasn’t crazy about the area, and that was that.
It probably goes without saying that he took a lot of care with this home, expecting it to be his retirement “palace,” so to speak. It’s energy-efficient, there are some unique touches no one else would bother adding (I can use the sump pump greywater on my lawn, for example) — and the inspector couldn’t stop talking about what a find we had on our hands, either.
4. The finishing touches. See No. 3 and imagine how someone with a meticulous, perfectionist nature might finish his own house. There’s crown molding throughout, beautiful cedar ceiling paneling in the upstairs bedrooms, a modern kitchen with cherrywood cabinets and plenty of storage space.
I am fairly sure Zestimate can’t accommodate for these idiosyncrasies, and I wanted to make sure I was being fair discussing what I as the homeowner can and can’t adjust.
All that said, there were much bigger problems with the listing that could (and should) have been addressed.
The listing
I can sympathize with the sellers, who no doubt had a difficult time pricing this home. It was listed late summer in 2015, and I closed on it at the end of February this year.
The home came on the market at $400,000. In the fall, the price was reduced to $379,000. In January, it was reduced again to $350,000. That was when we came to see it — and when we put an offer on it.
(Fun fact: Our creative director sent me a link to this home in the fall with the note, “This house is ADORABLE!” I told her I agreed, but it was out of our agreed-upon price range.)
My agent told me he was surprised that it hadn’t sold at $379,000. He thought the home’s value was around $385,000, based on all of the information I shared above, his experience selling homes in the area and his own calculation of comps (not easy for him to find, either).
What’s all this have to do with the Zestimate?
When this home was listed at $400,000, the Zestimate placed its value at about $265,000.
Before everyone charges to the comment section to roar about Zillow’s inaccuracy — I claimed my home on Zillow last week and saw exactly what had happened. The information on the MLS listing I’d seen had carried over to the Zillow listing, and the MLS listing was flawed. (I remember being surprised to find a third bathroom when we first saw the house.)
Here is the information I added or adjusted after I claimed my home:
- Bathrooms — the MLS listing showed two bathrooms in this home. There are actually three, one with a bathtub and two with showers. This correction made the biggest difference in home value. (I’m still not sure how many “full baths” I have, but that’s a different debate.)
- Basements — there isn’t one, just a crawlspace, so I marked “none.”
- Rooms — I added a couple of rooms that hadn’t been indicated, “family room” and “office.”
- Indoor features — I added “attic” and “wired.” (I wonder when “wired” will cease to be a feature anyone cares about …)
- Outdoor amenities — I added “lawn” and “waterfront.”
- Parking — I added “on street” and “off street.”
Saving these changes increased my home’s Zestimate significantly — by about $50,000. And that’s the amount by which the price of this home dropped before I bought it!
Is that a massive coincidence, or does it prove something?
Well, it’s an anecdote. A case study, if you will. I can’t prove or disprove that someone who saw this home on Zillow when it was listed at $400,000 or $379,000 would have put an offer on it — or asked an agent if they could see it — if the Zestimate had been $315,000 instead of $265,000.
But I can show you this graph of all the people who looked at it and remind you of the timeline:
- Listed last summer at $400,000.
- Price dropped to $379,000 in the fall.
- Price dropped again to $350,000 in January.
I can say that, knowing what I know, I’m going to make sure my Zestimate reflects what I am certain is true about my house — not what gets put in the MLS — when the time comes to sell. (I plan to check my Zillow listing after the MLS listing is live to make particularly sure that bathroom fractions aren’t being rounded down to my disadvantage.)
And if I were a real estate agent, I’d be encouraging my listing clients to do the same thing. You might not like portals, but that’s potential money your clients are leaving on the table — and price reductions hurt your commission, too.
Like me on Facebook! | Follow me on Twitter!
