Weeks after revealing the company planned to turn the Zestimate into a live offer in certain Zillow Offers markets, Zillow announced Thursday that qualifying homeowners in 20 markets would now officially see their Zestimate turned into a live offer.
Jeremy Wacksman | Photo credit: Zillow
The move comes roughly 15 years after Zillow initially introduced the Zestimate to consumers, a proprietary automated valuation model that uses machine learning to predict the market value of a home. Now, the tool isn’t just offering a prediction, it’s setting the market by making an initial bid.
“We’ve long said, one of the beauties of Zillow Offers is that it’s the best first step for you to think about selling,” Jeremy Wacksman, Zillow’s chief operations officer told Inman. “Nobody wants to think about selling, most sellers are thinking about buying, they want to be thinking about buying, but at some point they have to think about, ‘oh my gosh I have to go through this process.'”
“The Zestimate is the starting point for that. If we can turn the Zestimate into a starting offer for certain customers, that’s going to get them to raise their hand and say, ‘Okay, I’m thinking about moving, help me understand, am I trading in? Can I talk to an agent about that?'”
Earlier in the week, Zillow announced two strategic promotions, including the elevation of Wacksman, a longtime Zillow veteran, to his new role. The promotions were aimed at supporting an end-to-end customer experience and the introduction of the Zestimate as a live offer follows that theme.
It’s another way for Zillow to get consumers into its tech ecosystem at the top of the funnel, and connect them to an agent or bring them through the Zillow Offers process, Wacksman explained.
Zillow publishes a Zestimate for more than 100 million homes nationwide and boasts an error rate for on-market homes of 1.9 percent, the company said. The data is generated by a combination of public records, feeds from multiple listings services and brokerages, as well as machine learning technology.
The company has made big investments in making the tool more accurate, and in 2019, began incorporating data from pictures using artificial intelligence.
Turning the Zestimate — a tool already routinely criticized by real estate agents — into a live offer may also create more fear among agents that Zillow’s initial offer will become a market maker.
Wacksman addressed those concerns, in conversation with Inman, explaining that the live offer Zillow is making is more an attempt at just determining the actual, precise market value of a home.
“The goal always with the Zestimate is to try and express what the market-ready price of a home is on any given day,” Wacksman said. “It’s hard to do that when it’s just a computer model and we don’t know anything about your house.”
“But as you’re seeing, there’s a set of houses where we’re getting really confident because there’s a lot of houses like it, or we have a lot of data about your house,” Wacksman added. “Ultimately the offer that Zillow Offers makes is intended to be the actual, precise market value of your house once you tell us more about and we come to see it.”
The live offer feature will be available to qualifying homes in Phoenix and Tucson, Arizona; Charlotte and Raleigh, North Carolina; Miami, Jacksonville, Orlando and Tampa, Florida; Portland, Oregon; Denver, Colorado Springs and Fort Collins, Colorado; Nashville, Tennessee; San Diego, Los Angeles, Riverside and Sacramento, California; Dallas, Houston and San Antonio, Texas; Las Vegas, Nevada; Atlanta, Georgia; and Minneapolis, Minnesota.
