Have you Zillow'ed your home yet?  What Google did for looking up a high-school fling and everything-you-wanted-to-know-about-anything,   a new website, Zillow.com, intends to make information on real estate just as easy.  Zillow.com is an attempt to simplify the process of property evaluation by allowing its visitors to type in an address and view the public data for 60 million homes, including recent sales history, comparable properties and even daily appreciation. 
 

How does it work?

The official statement from the company says that their methodology used in calculating a homes value is "secret".   Zillow states that "hundreds of home details feed into the formula and the home characteristics are given different weights according to their influence in a given geography and over a specific period of time."   Important pieces of public information such as sales price of comparable homes, property size, bedroom count, factor into the estimation equation.   

All of this information is public information and has been available on-line for some time. Websites such as Domania.com and HouseValues.com also provide similar information to its visitors. However, in order to receive the information, the visitors are required to register and their personal profile is often sold to real estate agents as sales leads.   The requested information also takes a few days to arrive.  Zillow on the other hand is free and instantaneous.   Enter the address of your home or that of your neighbors, and check out a gaggle of data centering on the homes value and the great part is that no salesperson will call and there is no limit on your search. 

The problem often associated with attaining information in a blind evaluation is the accuracy of the evaluation.   The misnomer that you are able to sell your property for what your neighbor sold theirs for is highly subjective.  It depends on many different points of information.   For example, what you may see is as a minor drawback, such as a busy street, a traffic light or distant freeway noise can make a large difference for the potential buyer.  Also, a cul-de-sac location for a family with three children or a home with an ocean-view for a family relocating from Wisconsin who just witnessed their first California sunset may hold varying amounts of emotional, unpredictable value.   

Zillow has reported that their accuracy in predicting values in the San Diego market are within 10% of the selling price for 71% of the homes.   It gives the accuracy at a four-star level.  So I put it to the test.  After taking 30 Carlsbad homes that had transferred in the last two weeks, and after eliminating one outlier property that was off by $450,000, the properties were within an average of $69,000 dollars of their closing value.   A property in Olde Carlsbad was estimated to be worth $610,000, however it closed at $775,000 10 days ago.  Also, a property on the golf course in Aviara with an 'zestimated' worth of $1,377,278, closed a few days ago at $920,000.   If a buyer would have relied solely on Zillow.com for an estimation, it would have been an expensive error.  

Summary