Jay Thompson is a former brokerage owner who spent six years working for Zillow Group. He retired in August 2018 but can’t seem to leave the real estate industry behind. His weekly Inman column publishes every Wednesday.
Editor’s note: Jay Thompson worked for Zillow Group for seven years but has since retired, and he has small Zillow Group stock holdings purchased post-employment, not options.
Last week, Inman staff writer Andrea Brambila penned, “Most agents aren’t including Zestimates, iBuyer info in CMAs.” Unsurprisingly, within minutes of publication, the comments denouncing all things Zillow began to roll in.
Sadly, and again this was no surprise, it swiftly became apparent that many didn’t bother reading past the headline. The article was based on a survey conducted by W+R Studios (maker of the popular comparative market analysis software Cloud CMA). The survey results were compiled in a report, “Best practices for CMAs and listing presentations.” There’s some really interesting data and insight in this report, agents would be well-advised to read it.
Confusion reigned down in the comment stream. Why in the world would an agent include iBuyers and Zestimates in their CMAs? The Zestimate sucks according to several.
Greg Robertson, W+R Studios co-founder, was attacked, called clueless, and challenged as to whether he had any industry experience (yes, almost three decades worth.) IBuyers, also highlighted in the headline, got one mention. Nothing else in the survey report was discussed. A few commenters waded into the fray showing understanding of why they at least look at Zestimates and sometimes mention them in listing presentations. The vast majority of commenters sounded off on the evils of Zillow and the Zestimate.
That is, of course, well within their right. Everyone has an opinion. As this is an opinion piece, I’m going to share mine about why you should be including iBuyers and Zestimates in your CMAs and listing presentations.
Yes, I’m fully aware that I spent almost seven years working for Zillow Group, and obviously I’m biased. Despite one commenter’s implication, I am no longer on Zillow’s payroll. I do have some (very) small holdings in Zillow Group stock — not options, I bought on the open market long after I left the company. Those meager holdings have zero to do with my opinion. Talking to thousands of agents during my Zillow employment has everything to do with it.
The undeniable fact is, there are a whole lot of real estate consumers who look at Zillow. Most sellers have looked at their Zestimate. Most buyers are at least aware of the site, and countless use it as a primary source of listings. You might not like this, but it is what it is — Zillow has the eyeballs and attention of today’s homebuyers and sellers.
Simply put, that is why you should include mention of the Zestimate in your listing presentations. If your buyers or sellers are looking at the site, you need to understand what they are seeing. That does not mean you have to love it or even tolerate it. But understanding what your clients and prospects are looking at helps the astute agent prepare for any potential objections.
During my tenure at Zillow, I can’t count how many conversations were had that started with agents lamenting the fact that some sellers begin a price discussion with, “But Zillow says my home is worth … ” Want to know the best way to handle that objection? Understand what the Zestimate is and is not.
Understand the accuracy of the Zestimate in your market (the real accuracy, not what you think, wish or hope it is). Go to Zillow’s Zestimate page, remove your Zillow blinders, and really understand what it says.
Note that Zillow provides Zestimate accuracy details. Note that it says, multiple times, that the Zestimate is not an appraisal, and it shouldn’t be used to value a home. It’s called a Zestimate and not a Zappraisal for a reason.
Even the most ardent Zillow believer can not argue when you point out a sentence like, “The Zestimate is a starting point and does not consider all the market intricacies that can determine the actual price a home will sell for.” You know who does consider all the market intricacies? You do. That’s Zillow itself telling your seller not to use the Zestimate as a list price. Objection handled, closed, finished.
No one, including Zillow, W+R Studios or me, is saying the Zestimate should be used as a comparable in your CMA. Of course it shouldn’t be, that’s not its intent or purpose. But to ignore it is to ignore something your clients are looking at and wondering about. Address it upfront, leave out your personal feelings about Zillow, and put any objections to rest early in the process. The listing presentation is the ideal time to address it with sellers, and the CMA is the perfect place to have it on record.
For those who don’t want to hear this from the biased former Zillow guy, perhaps you’ll heed the advice of your fellow professionals. Here are some of the comments on Andrea’s article:
Brian Adams: I can’t imagine NOT going into a listing presentation at least aware of prominent AVMs like the Zestimate and prepared to discuss with your seller why your price recommendation is different (assuming it is). Your seller is looking that stuff up even if you aren’t.
Pat Tasker: Since buyers look at Zestimates and sellers know about Zestimates, why wouldn’t you address the positives and (mostly) minuses about them at the listing appointment? Let sellers know why they are NOT to be relied on. They are not USED in the pricing process but need to be discussed at the appointment.
All this holds true with iBuyers. Many agents seem to fear iBuyers. You need to put that fear aside and help your sellers understand the pros and cons (yes, there are pros, for some sellers) of iBuying. This is a prime opportunity to display your value proposition to clients.
In the markets where iBuyers are active, I can assure you that sellers know at least a little something about them. You know what’s dangerous? Knowing a little something about a complex topic. Take the time, and put in the effort to educate your clients well past “a little something.” Even if you are not in a market where iBuyers are active, yet, educating your clients and taking an opportunity to show your value is never a bad idea.
The commenter who attacked Robertson’s credibility mentioned something to the effect that bringing a Zestimate would be like a doctor bringing a WebMD article to a patient consultation.
You know what a sharp, caring physician does? They look up what their patients are experiencing on sites like WebMD. They want to know exactly what their patients are seeing and to directly address their fears, concerns and questions. Good doctors know their patients are looking at these sites, and if they know what patients see, they can nip potential issues in the bud, right there, upfront. A sharp, caring real estate agent can— and should — do the same.
Jay Thompson is a real estate veteran and retiree living in the Texas Coastal Bend, as well as the one spinning the wheels at Now Pondering. Follow him on Facebook, Instagram and Twitter. He holds an active Arizona broker’s license with eXp Realty. “Retired but not dead,” Jay speaks around the world on many things real estate.