Zillow Misses the Mark Completely in Utah

It’s no secret within the real estate industry that Zillow, and it’s Zestimates are not accurate, and really- they aren’t even supposed to be. Accuracy doesn’t even fit into Zillow’s core objectives. Their business model is not about being accurate at all- its about selling ads. But Zillow does create a real problem for many people who believe the ridiculous Zillow price estimates.

Zillow’s business model is simple;

1- Assign a price estimate for every home

2- Generate interest by showing how “fun” it is to see what it says other people’s homes are worth and satelite images of celebrity houses

3- Sell advertising on the website

Nowhere in that business model is accuracy. They want to be accurate enough that people will go to the site, but that’s about it. The state of Arizona’s lawsuit against Zillow only feeds them more exposure. And I’m a supporter of Zillow’s. I have been from the beginning and I advertise with them. But it’s important that home buyers and sellers realize that Zillow doesn’t know anything about real estate. It’s not a real estate company- and that’s the thing that most people don’t realize.

It’s a technology company disguised as a media company disguised as a real estate company.

The people who own and run Zillow have no experience in real estate, and most of the people working for Zillow have no experience in the real estate industry. They are computer programmers, PR and media people.

Apart from how ridiculous it is to actually believe that a computer program can determine the value of something that is as much about feel and flow as it is square feet and bedrooms, the idea that you could take an algorithm to determine values without even seeing what you are evaluating is absurd.

I haven’t put enough thought into the lawsuit the state of Arizona has filed against them to have an opinion, but I do think it’s a shame that consumers would be so fooled by the website that I do believe they need to make their disclaimers more obvious so people realize that zillow is simply a fun place to check out your neighbors house.

It’s like trying to put a value on a person based on a pre-set group of data points and an algorithym that places value to different attributes you possess. Sure, it might be fun and entertaining, but would you actually believe the values?

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