Low Zestimates on Zillow hurt sales, complain homeowners

One Shoreline man says Zillow made it nearly impossible to sell his home on his own – and he’s not the only homeowner with complaints.

SHORELINE, Wash. — One Shoreline man says Zillow made it nearly impossible to sell his home on his own – and he’s not the only homeowner with complaints.

KING 5 investigated how seemingly inaccurate information on America’s most popular real estate website is leaving homeowners feeling burned.

In television ads Zillow has dubbed itself the place to “find your way home.”

The website is described as the largest single source of real estate information for home buyers and sellers offering estimated home values, market comparisons, even neighborhood and school ratings.

“It’s the most used real estate website out there,” said real estate agent Jeff Sievers.

So it’s no wonder Zillow was the first place Scott Hogle turned to sell his parents’ home.

“I really thought that I could sell the home on my own, and in doing so I would have saved my parents a lot of money on real estate commissions,” Hogle said.

It didn’t work that way.

Even around the time, The Seattle Times was reporting “bidding wars” for “homebuyers” in the Seattle area, many home values on Zillow were dropping.

Hogle’s estimated home value plummeted on Zillow by about $50,000, far below the nearly $400,000 an appraiser said Hogle’s home is really worth.

“And I couldn’t sell it because people would come on the property and think it was a $350,000 home because that is what they saw on Zillow,” Hogle said.

Complicating Hogle’s situation, Zillow had the size of his home wrong. Zillow listed it as only 1780 square feet instead of the 1860 square feet it really was.

It’s a common problem in older homes, King County never recorded an addition to Hogle’s basement back in 1960.

That’ not quite Zillow’s fault, but he couldn’t get it fixed.

So we called Zillow and got Hogle’s square footage promptly changed on his home page.

After the change, his home was still valued at around $374,000, more than $25,000 below where Hogle’s appraiser put it.

“I was done fighting. I waved the white flag,” Hogle said.

KING 5 found a series of similar complaints on Zillow’s online customer service thread. One person writes, “What is going on with Zestimate.” Another says their Zestimate decreased by about “$95,000” in one day.

Zillow responds, “We are aware of a bug… We are working to resolve this as soon as possible.”

Zillow wouldn’t to talk with KING 5 about the problem on camera.

The company said it fixed the bug. And when it came up with a new way to calculate home values, Zillow erased any evidence of old estimates made using prior formulas from their website, they say to reflect a more accurate picture of the market.

“To me, it is like predicting the score of a football game after it is already over,” Hogle said.

The complaints with Zillow’s estimates don’t begin or end with that bug, they mention.

Over the past three years, the Washington Attorney General’s office has logged 40 complaints from consumers around the country regarding the Seattle-based company.

The Oregon Attorney General’s Office has logged another handful. The majority are concerning misrepresentations on the website.

The Better Business Bureau has collected 246 complaints and gives Zillow a C-minus rating.

“We expect businesses to show a good faith effort in resolving complaints,” said BBB spokesperson David Quinlin. “The situation with Zillow because of the number of complaints they have and three of them sit unresolved that lowered their ranking.”

In other complaints, the owner of one Snoqualmie Pass home calls Zillow “completely inept.” Zillow values his home listed for over $1,000,000 at just over $400,000.

The problems go beyond Western Washington.

The owner of one New Jersey Home complains Zillow’s Zestimate are “completely inconsistent” after Zillow valued a similarly sized home two doors down more than $100,000 higher than his own.

The owner of one New York home writes that a low Zestimate is “hindering the marketability” of her home.

“I’m not not sure if Zillow questions the validity of the complaints. Bottom line, we have noticed this pattern since 2011 and it hasn’t changed,” Quinlin said.

Zillow said its Zestimate are just that, estimates, “not an appraisal” and are within 5% of the sale price just over a third of the time.

Zestimates are calculated using a formula that considers attributes like a home’s size, tax records and recent nearby sales.

Zillow argues a Zestimate is also as likely to be high as it is to be low.

Sievers says homebuyers often take those estimates as fact.

“So, that has become a problem because I understand that Zillow has a price, but in reality it’s not that. It’s what the market will bear,” Sievers said. “We will have to bring them back into reality and say, ‘hey, you know, there is a lot of different variations to a house and why a house would be higher or lower.'”

Hogle said he eventually hired a realtor and got two offers in five days nearing $400,000.

“In my opinion, had the Zestimate been right, I would have been able to sell the home on my own and I would have been able to save my parents $12,000,” Hogle said.

Sievers said Zillow is still a great website. People just need to understand its purpose.

“Zillow is an awesome place to go and get a ton of data. They have the schools, the walkability, the resources on there are great,” Sievers said.

Just keep in mind, unlike their ads may imply, Zillow is one source that requires some double checking.

Zillow provided us this statement:

“Before Zillow, consumers had access to very little information about homes. We created Zillow to empower them with information while they make the most important financial decisions of their lives – decisions around buying, selling and owning a home. We provide consumers with hundreds of data points about homes, including Zestimate home values. Zestimates are a starting point in determining a home’s value. Zestimates are most accurate when the underlying data about a home is accurate, so Zillow allows homeowners to update home facts like number of bedrooms and bathrooms and square footage, which often affects a home’s Zestimate.”

“The only way to truly know the value of a home is to sell it. Because most homes only sell every 5-7 years, there are very few of these data points in a home’s history. The Zestimate approximates the changes in value of a home over time.”

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