By: Sally Grenier, Broker Owner
Metro Brokers / Grenier Real Estate
I know that searching for homes online is super fun and a popular activity for home buyers or sellers, or anyone interested in real estate.
Buyers are in house hunting mode and it's fun to see what's on the market and to see all the pretty photos, check out the mortgage calculator, what the schools are like, etc.
But here's why I tell Buyers (and Sellers, or anyone looking at real estate listings) to NEVER rely on Zillow:
1. It's Probably Under Contract :(
What you see on Zillow is NOT what's available. Because we're still in a pretty hot seller's market, homes are selling fairly quickly. However, Zillow doesn't want you to know that a home is under contract. Why? Because they make money off us REALTORS in the form of advertising and lead generation. If a house is under contract, then a potential buyer won't click on that property and won't inquire about it (and won't create any "leads" for a Realtor).
9 times out of 10 when I get a buyer lead off a Zillow listing it's under contract. Here's a classic example:
Just last week I received a call from Buyer "Anna S" who wanted to see a house at 9025 Drake Way in Frederick. Here's what you'll find if you pull up the listing on Zillow:
Looks like it's for sale, right? But guess what? This is what I see when I pull it up in the MLS:
See where it says "Active/Backup"? That means it's under contract but accepting backup offers. It went under contract on April 5, 2019 (over two weeks ago), yet Zillow still shows it as being available.
2. "Zestimates" Are Wildly Inaccurate.
Check out my post from a few months ago.
Zillow uses complicated algorithms to calculate home values, called "Zestimates". These values are terribly inaccurate. Sometimes they are high or low by as much as 10%-20% off!
ALWAYS rely on your REALTOR's market analysis to determine a home's value. Your REALTOR will use actual comps from that neighborhood, and will take into account things like condition, upgrades, location, school district, etc. (which Zillow DOES NOT).
3. Zillow's "Pre-Foreclosure" Listings Aren't Real Listings!
I can't tell you how many times I get buyers asking me about a foreclosure they saw on Zillow. But usually it's listed as a "pre-foreclosure" which only means that a home owner is behind on their payments, and the bank or lien holder has filed an NED (Notice of Election & Demand) with the County. It's NOT for sale! The owner still may get current on their payment or renegotiate the terms of their loan and stop the foreclosure process.
In addition, that price you see is WAY off. That is likely the amount they owe on their mortgage. It is NOT what it will be sold for IF it does go through foreclosure. If/when it does get foreclosed on, it will be sold at auction for cash for "Fair Market Value".
Sally's two cents...
Zillow is fine when you're first starting out, just to get an idea of what's one the market, check out neighborhoods, towns and schools. But PLEASE do not rely on it for listings, property values or any of those "pre-foreclosure" listings! If you're serious about buying, then you should only be relying on the services of your REALTOR.
I'm always happy to help you in your search!