I have just improved my web site to make it more responsive to what consumers need. This took months to perfect, and I believe that you will find it extremely valuable if searching for homes, or thinking of selling, in the Northern Virginia area. Below is how it will help you, and highlights statements from Zillow CEO, Spencer Rascoff. I am very happy to have Mr. Rascoff as my partner in helping the RayMax team best serve clients in the D.C. area.
A summary of the web site, http://www.RayMaxTeam.com, is below:
A SUMMARY OF THE WEB SITE AND HOW IT CAN ASSIST YOU—- More Specific Searches and More Relevant Information Than Zillow
Welcome to my web site. Before providing a brief personal summary, I wanted to give you a quick synopsis of this site: Why it is developed as it is, and how it can benefit you most.
The goal of this web site is to build upon the excellent work done by Zillow, led by its Chairman Spencer Rascoff. In today’s world, I realized long ago that people wanted more from a Realtor than simply the latest food recipes, football schedules, and tips on how to make one’s home smell better during an open house. Given my extensive financial and sales background, my goal is to provide that valuable final step that Mr. Rascoff mentions as being so necessary if a buyer or seller wants proper execution in a real estate transaction: find a Realtor who specializes in an area you choose to live who can best serve your localized needs. I call it “on the ground intelligence.”
Two major points of emphasis about the comparison of searches in the RayMaxTeam web site versus Zillow: 1) Zillow is a very broad-based system which can be confusing for those looking to narrow searches to specific neighborhoods, types of homes, and the like. In the RayMaxTeam site, communities are analyzed, and searches are designed to pull up ONLY those listings which conform to the community or area you are searching. In most cases it is a one-click “no brainer”. The output and summary of each active listing is generally thought to be cleaner and more precise as well. On the home page, the RayMaxTeam site also allows the type of broader search you see on Zillow, if you want to go in that direction; 2) This is a major point: The RayMaxTeam site gets all information directly from the local MLS. Zillow does not. Zillow gets the listing information fed to it from each individual broker, so any glitches present in an individual broker’s site or listing flows through to Zillow. This often answers the questions I sometimes receive as to the reliability of my output versus Zillow, in those rare cases in which it is different. Zillow is aware of this glitch, and acknowledges it. I assume it will eventually get closer to 100% accuracy. However, what they are striving toward is something I already provide in the RayMaxTeam web site. I suggest you use the web site for Northern Virginia searches. If you are already comfortable using Zillow, I suggest verifying the information on Zillow by looking up that same listing on the RayMaxTeam site.
My web site will provide on the ground intelligence beyond what you can possibly find in Zillow, and I believe is the next step in the process of meeting most of your needs online.
The following are excerpts from an interview with Zillow’s Spencer Rascoff, and my reply to his comments. My web site is designed to bridge the gaps he identifies and the limitations he sees in reliance on Zillow alone:
Mr. Rascoff is a media expert, not a real estate-trained expert. He founded and sold HotWire.com, and makes this observation about how Zillow differs from HotWire and other online services: “At Zillow, we aim to unlock the information and make it readily available to consumers. The difference, though, is that in the real estate space, unlike in the travel space, there will always be the intermediary – somebody involved in the transaction (besides the buyer and seller). That’s fine by us. We actually think that real estate transactions are so infrequent, so expensive, so highly emotional and so complex, that there will always be and should always be a professional involved in the transaction. So we have a different business model at Zillow. We sell advertising and software tools to professionals. That’s how we make money, rather than being involved in the transaction, which is how Expedia makes money.”
My take on this business strategy: I have not battled with Zillow on the changing business environment for real estate, but have actually embraced it. I have been a Zillow Premier agent for years now, allowing my listings to pop up at the top of client searches among other benefits. But this web site is designed to capitalize on what Mr. Rascoff understands as the limitations of his broad-based system: Zillow searches provide a great broad-brush of large areas, and allow the consumer to casually browse through real estate listings. I love to do the same thing myself. However, once someone narrows into a geographic region or type of home and community in which I specialize (examples are golf course communities or penthouse condos), it is my goal and responsibility to be much more precise in the information provided than Zillow will ever be, and to do so in a manner which is ultimately user-friendly. The searches I have designed are specific to the immediate communities or types of communities you might consider; no need for you to guess, estimate, or slug your way through hundreds of listings which are irrelevant to get to the ones which are. I will discuss this in more detail later.
Mr. Rascoff often says that the consumer needs to know the value of his/her home today for many reasons: Are you going to sell? How does it compare to your mortgage amount? This democratizes data, and it makes the market more transparent, and more efficient. All of this is very important to a market that has seen its troubles This helps bring liquidity back.
This is a very important point. And Zillow continually tries to make its valuation models more accurate, but they have inherent valuation difficulties which cannot be cured by automated means, regardless of the sophistication of anyone’s algorithmic models. At the end of the day, your best estimate of value will come from a solid, intelligent, authentic real estate practitioner who understands your market and the underlying trends. Mr. Rascoff knows this and preaches it: identify and work with your local experts!
Per the ever-popular ZESTIMATES. I receive more comments and questions about this from consumers than any other. First, let’s allow Mr. Rascoff to tell us exactly how “Zestimates” are derived: The short answer is the data base. The software looks at the property attributes of the home, and tries to compare it with like homes. The longer answer is, at each census track level — census track is basically a couple of neighborhood blocks — Zillow has a meta-model that sits on other sub-models. For example, one looks at tax assessments, another may look at distance to an arterial, a third might examine dollars per square foot and a fourth would look at just regression against a number of bedrooms. The meta-model is constantly changing and improving itself as more data comes in, so as time passes, it becomes more accurate.
I have had people who swear by Zestimates, and others who laugh at them. I have found that, most of the time, a Zestimate is a somewhat reasonable look at current market value. But not always, and it is never precise. There are times when the “estimate” is way too low or high, but in any case, Mr. Rascoff is basically admitting to known limitations in trying to use such a model at the individual home level for every house in America. There is only one good way to get a solid estimate: use an intelligent, authentic, knowledgeable real estate professional who understands your market and underlying trends.
About 1/3 of homes in the U.S. have had their property attributes changed on Zillow by homeowners or their agents. This is much like Wikepedia, which is the largest living data base in the world. Zillow is the largest living real estate data base in the world, and so much of the data is missing or inaccurate, but Zillow is getting more accurate over time. Zillow uses what is known as a “hedonic analysis”. This takes the attributes of property and weighs them to statistically derive an estimate. It becomes more accurate as more accurate data is submitted.
I admire Mr. Rascoff for acknowledging the limitations and being honest with consumers. Once again, the answer is: use a solid, intelligent, honest, authentic real estate professional, preferably one who understands and works with Zillow as well. There have been several occasions when, as a Premier Agent, I have had to challenge a “zestimate”, and done so with success. My feedback helps them make their data base more accurate.
To the question about Zestimates accuracy, and criticisms that many valuation factors cannot be captured and automated, Mr. Rascoff answers that as follows: “I agree with that. I mean, it’s computer-generated on every home in the country three times a week. No employee of Zillow has ever been in your home. For a computer-generated valuation, we believe it is quite accurate, and a good starting point. We call it ‘Zestimate’, not “Zappraisal.’ It is meant to be a starting point. If you want to figure out a more accurate determination of your home’s value, we encourage you to talk to a real estate agent or an appraiser, who will come to your home and refine the valuation.”
I have nothing to add to what Mr. Rascoff says, above. All great points.
To the issue of “accuracy problems” and the fact that many real estate developers have complained to him about the inconsistency in valuations (according to them)…. Rascoff: This is an industry wide problem. We rely on county records, and data there can only be corrected by owners or agents, so Zillow is reliant on that. Zillow has spent a lot of money, a lot of business expertise, to try to solve this issue. It will be something they work on for years down the road. Many states and some cities have exceptional collection methodologies and many have poor collection methodologies. Zillow is somewhat hamstrung by this in terms of accurate output.
Once again, Mr. Rascoff is making the point that Zillow is improving and is an excellent starting point for searches. But as you move down the processing road, eventually enlist a valued real estate professional partner to help you.
When asked his ultimate goals, Mr. Raskoff says that he hopes to create an everlasting and enduring brand that his children, and someday grand children, will know. Zillow is just getting started. They hope to team with local real estate experts to create a system which works best for the consumer and home owner in America.
Amen, Mr. Rascoff. I look forward to walking the walk with you.
Ray Wedell, Realtor
Chartered Financial Analyst, CFA