BrokerageIndustry News

Real estate values need human interpretation

Future-Proof: Navigate Threats, Seize Opportunities at ICNY 2018 | Jan 22-26 at the Marriott Marquis, Times Square, New York

(This is Part 2 of a two-part series. See Part 1.) It's probably safe to assume that the early surge in Zillow's traffic resulted in part from real estate agents and brokers who fear what Zillow may do to their business. Are "Zestimates" (Zillow's estimate of what your property is worth) something brokers should fear? The billion-dollar question for the real estate industry is whether computers can do a better job of accurately pricing property than experienced agents can. Like many other brokers, I decided to put Zillow to the test by evaluating the properties that I have owned in the past. When it came to selecting comparable sales on my home in Austin, Texas, Zillow did not select a single comparable sale from within the subdivision where I live. While the price was off by about 15 percent, the comparables were so far away that they were useless. Furthermore, every single comparable sale Zillow selected had square footage that was only 50 percent of the size of my home. After test...