Real Estate Online Pricing Tools Accuracy Threats Local Pros
Monday, February 27 2006 @ 01:47 pm UTC
Contributed by: jron
Local real estate professionals are questioning the accuracy of a new Web site that provides free estimates and information on more than 60 million property addresses across the country, with their exclusivity being threatened by yet another online service.
The service is designed to allow buyers to compare home values to avoid overpaying, for sellers to use the home valuation tools to pinpoint an asking price, and for homeowners to track the value of their home and estimate the value of renovations and upgrades. Houston/Galveston/Brazoria was one of 25 markets that served as a launchpad for Seattle-based Zillow.com on Feb. 8.
Typically, Realtors are considered to have a leg up on other forms of competition based on their access to home value information derived from the proprietary Multiple Listing Service. The Web site also allows users to explore satellite maps to see what nearby homes are worth and view recently sold homes that are comparable to the address entered.
But the company has already hit a nerve in Houston, as real estate experts question the accuracy of the site's information, much more like Zillow.com will offer less detailed information for free, generating revenue through advertisements on its site.
Zillow.com, admits that numbers for the Houston area rate the lowest of any metropolitan area covered because Texas is a "nondisclosure" state, meaning that the selling price of a home does not have to be disclosed to the state tax office, it was founded by former chief of travel Web site Expedia.com Rich Barton.
The chart shows that the site is within 10 percent of the selling price only 50 percent of the time. In fact, the company gives the Houston area a rating of two stars out of five stars on in its data coverage and "Zestimate" accuracy table. The company has a large amount of data on individual homes, including number of bedrooms, bathrooms and square footage, but doesn't currently have access to historical transactions.
Appraiser Pete Haginas said he doesn't feel threatened by Zillow.com, largely because of the accuracy issues. Haginas is the president of Houston-based Haginas & Chapman. He says Zillow.com also provided inaccurate information on the number of rooms and square footage of his home. Haginas, for example, entered his home address and found that the Web site was $80,000 off on the value of his country club estate.
Just six hours after launching the site earlier this month, Zillow.com crashed and posted this message: "Due to overwhelming demand, our beta site is down. We'll be back online as soon as possible. Please check with us again later." Accuracy issues aside, the Web site has already attracted hundreds of thousands of curious consumers.
Zillow.com differentiates itself from similar sites by offering free home valuations and comparable sales prices without providing the user's name to a particular real estate agency or mortgage broker.
The site is adequate as a general pricing tool but doesn't believe it offers much information that would be useful in an actual sales transaction, largely because Zillow.com is dependent on public records and isn't able to utilize the actual historical sales prices of local homes. Lorraine Abercrombie, chairwoman of the Houston Association of Realtors, believes.
"Public records sometimes don't even list home improvements in excess of $100,000, which could significantly increase the value of a home," she points out.