Top 7 Things You Need to Know Before House-hunting on Zillow

Top 7 Things You Need to Know Before House-hunting on Zillow

Just as Kleenex has become the name for any brand of facial tissue and “to Xerox” is used as a verb for making copies, Zillow is the first name in online home search with 196 million unique visitors last year. That’s about double the number that Realtor.com enjoyed during the same period, making Zillow the platform that, in many ways, drives the real estate industry.

However, both real estate professionals and consumers have plenty of complaints about Zillow’s user interface (UI) and the accuracy of its information. If you’re thinking of starting a home search, here’s why you may need to bypass Zillow as your starting point.

zillow estimate

1. The Zestimate is often unreliable.

This is the most important thing to know before you start looking at Zillow to gauge prices in your preferred market. The Zillow Zestimate—an estimate home value calculated by Zillow’s proprietary algorithm—is notoriously unreliable and may have little or no relation to the actual fair market value of a property. In many cases, the Zestimate doesn’t consider upgrades that have been made to the home and it may be based on unreliable information about the market.

zillow search page

2. The agents shown on Zillow may know little or nothing about the property you are interested in.

So you’ve found the perfect home and there’s a smiling agent’s photo and contact information right beside that listing. Should you click through to ask about the home? In reality, that agent paid for that placement and may know less than you do about the property you’re viewing. Zillow promotes agents who pay to be members of its Premiere Agent program, not the listing agent associated with the property or a qualified buyer agent who has your best interest at heart.

3. Zillow doesn’t show all of the listings that are currently available.

Because Zillow obtains listing information from a tangled network of separate Multiple Listing Services (MLSs) and from individual agents and brokers, as well as from individual homeowners, they don’t always show all of the listings that are currently available in a given market. In addition, Zillow’s platform often takes longer to update than other platforms so it may not reflect all active listings.

zillow home search page

4. Zillow often has inaccurate information about properties.

You may find a property listed on Zillow that you like, and then find out that it is currently under contract or that it has already been sold. This is because Zillow listings may not be updated at all or may not be updated in a timely manner. Since some of their listings come directly from the homeowners themselves and from agents and brokers, they are not automatically updated the way that MLS listings would be.

5. Zillow’s iBuyer program may give you a very narrow margin for negotiation.

One of Zillow’s newer initiatives is an iBuyer program that allows homeowners to sell to Zillow, which then flips the property to buyers. The program has been unprofitable for Zillow and their margins are tight, so you may find that buying a Zillow home leaves you little room to negotiate or to request needed repairs or improvements.

6. Zillow makes money in part through ad sales to property management companies, real estate agents, and lenders.

While they have expanded their business model to include the iBuyer program, Zillow makes most of its money through advertising. That means that the professionals you see promoted on the platform have paid for that privilege and are being promoted by the algorithm, not based on their qualifications, experience, or track record. In addition, if you are looking at rental properties, Zillow’s recommendations are paid placements from property management companies, not properties that are ideally suited to your search criteria.

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7. Some of Zillow’s practices have been called into question through a series of class-action lawsuits.

Zillow has been taken to court for violations of antitrust laws and regulations, for promoting dual agency, and for regulatory questions related to its Premiere Agent program. While Zillow defends its business model, these legal issues call into question Zillow’s platform and the way that it promotes a pay-for-play real estate marketplace. Again, Zillow’s platform is not technically designed in the best interest of the consumer, but in the best interest of Zillow’s shareholders.

What is the better alternative to a home search through Zillow?

If you’re looking for a more accurate, more focused home search, a real estate professional is the place to start. An agent or broker can provide you with listings straight from the MLS, so you know that they are up-to-date and accurate. In addition, you’ll be able to narrow your search to properties that are in your ideal location and that have your most wanted features, saving you time and frustration throughout your home search.

Forget looking at the Zilllow Zestimate to determine the fair market value of the home you’re interested in. A real estate agent or broker will help walk you through the comparable properties in your market, helping you understand the factors that impact home prices and develop a clearer picture of the market conditions that are currently at play in your area. When it’s time to make an offer, your agent will help you craft one based on accurate, real-time data, not on outdated, impartial information and a flawed algorithm.

The best part? Real estate professionals aren’t motivated by advertisers or shareholders. They are focused on helping you find the right home at the right price on your timeline. That ensures that the properties you see and the information you’re given are targeted to your needs and focused on what’s best for you and your family.

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