Every Realtor knows that Zillow’s Zestimates are often inaccurate. What many homeowners don’t know is that Zestimates can often prevent the sale of their home or cause buyers to pay a below market price.
When Zillow’s Zestimate value is lower than your asking price (they appear together on Zillow), buyers presume that your home is overpriced, even when it’s not. Zillow’s Zestimates are so off-base that Zillow’s CEO, Spencer Rascoff, ended up selling his own Seattle home a whopping 40% below his company’s Zestimate valuation ($1.05M sale price vs. its $1.75M Zestimate). An embarrassing moment, to say the least.
Because Zillow has such a gigantic brand, homebuyers believe it must have some magical algorithm that allows it to mystically and accurately value a home without seeing it. It does not.
After 35 years selling Arizona real estate, I can assure you that no home can be properly valued without seeing it on the outside, the inside and assessing the neighborhood, including the way the next door neighbors maintain their home.
Homeowners have been harmed by the Zillow valuation nightmare for years. Now Zillow has crossed the line and done something so egregiously wrong that consumers must be warned. This is the dark side of Zillow.
Through its Instant Offers program recently launched in Phoenix, Zillow is trying to convince unsuspecting homeowners to sell at wholesale prices to institutional investors. The investors’ goal is to buy as low as they can and make as much money as they can. Then, they try to raise the price 10 to 15 percent or more when they sell to buyers.
Sellers get hurt by selling too low. Buyers get hurt by paying too much. The only beneficiaries are Zillow and its profit-driven institutional investors.
Zillow’s new program is an equity grab from innocent homeowners. It’s also deceiving.
While Zillow promotes that one of their investors will buy your home, the offers are so ridiculously low that few ever result in a purchase. So few, that Zillow refuses to release statistics.
So why does Zillow promote this program? When you inquire, Zillow sells your contact and home information to its “pay-to-play” agents looking for seller leads. These agents then call you and try to list your home. You could end up being pounded by phone calls from real estate agents hungry for business.
I’ve been writing articles for a local newspaper every week for more than 12 years. I’ve done my best to entertain and inform. This blog is a warning I hope you will share with family and friends.
Please caution them that the only two results that will come from inquiring about Zillow’s new Instant Offers is to either receive a wholesale, below-market price for the their home or have their privacy invaded with their personal information being sold to real estate agents (who buy leads instead of building their brand).