I’ll never forget the phone call.
A Zillow rep called me and said: “I am on the other line with Suzie (an agent I had worked with for years), and she wants you to co-market with her for $1,000 per month, and if you don’t, I will introduce her to another loan officer who will…”
It was that blatant, and it happened repeatedly for about four years.
So Zillow’s extortion tactics are reason #1 why I despise the company, but I have more.
REASON 2: They Compete With The People Who Pay Them
Real estate agents and loan officers pay them for advertising and leads – while Zillow runs competing real estate and mortgage businesses at the same time.
People are literally funding their competitor.
Sidebar reason to despise Zillow: We purchased some Zillow mortgage leads years ago, and they were utterly worthless.
REASON 3: Zillow’s “Zestimates” Often Badly Mislead Homeowners
I have blogged about this numerous times – including here: Zillow: As Flawed As It Ever Was.
Here are some of the things Zillow’s algorithm misses: (1) Recent appreciation/depreciation trends; (2) Pending sale prices; (3) Lot size and lot UTILITY (a huge lot is not worth that much if it has a steep slope and little usable area); (4) Views; (5) Updating; (6) The reputation of the builder; (7) Deferred maintenance; and (8) External influences, e.g. nearby schools, commercial buildings, busy streets, freeways, etc.
Despite this, homeowners often stubbornly cling to Zillow’s value estimates.
REASON 4: Misleading Market Analyses – The Reason I Need To “Re-Hate” Zillow
Zillow recently analyzed residential real estate prices across the entire planet, from Madagascar to Argentina to Russia to Japan – and it noticed some declining prices. So, it then declared that real estate is crashing – so nobody should buy a home in Frisco, Texas….
OK, Zillow did not say that, but they might as well have…
What they did do is tell the world that the Oakland, CA market is crashing at the fastest rate in the country, according to their most recent data from April.
It was ridiculous because Oakland is a large city, and there are many areas that are not only not crashing, but they are doing quite well. Especially desirable areas where the tech crowd with cash is buying.
Andrei from our office recently posted this popular Instagram video breaking down the flaws in the article, “Oakland home values continue to fall — at one of the fastest rates in the nation,” which based its claim on Zillow’s data.
As odd as it is to have Zillow join the “Crash Bro” crowd, given that they are in the real estate space, it is also very frustrating because Zillow has so much influence on buyers.
A few weeks ago, I wrote a blog titled, “Dear Buyer, The Market’s Not Soft, Please Don’t Low-Ball..” And it was largely because we were seeing so many buyers low-ball in Oakland neighborhoods that they mistakenly believed were soft.
Thanks to Zillow, that problem will only get worse.
Zillow’s stock price is down to $38, from almost $120 in the COVID era. I hope it’s OK that it makes me happy. 😊
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