VOL. 42 | NO. 31 | Friday, August 3, 2018
‘Godzillow’ wrecks havoc on online home valuations
Veteran real estate broker Linda Chancey was meeting with one of her clients last week when she proposed listing the client’s house for $3.5 million.
The seller, somewhat shocked, expressed her irritation that the home had been assigned a “zestimate” of slightly more than $1 million. The zestimate is Zillow’s estimate of home value.
“Oh, no,” Chancey exclaimed, “not Godzillow!”
Zillow is easily navigable and has become the site of choice for many house shoppers, especially since Zillow merged with Trulia, their only real competition at the time, several years ago.
Redfin has been making some noise lately, and many Realtors are pulling for that service after ongoing issues with Zillow.
One of the main issues is that Zillow decides what photos to post, at least on the initial posting. At that time, the listing agent or the homeowner, or a person disguised as either, may go onto the site and upload new photos and commentary. The problem arises when Zillow zings the listing later, undoing what the agent/owner has done.
After marketing wizard Anita Bailey of Bailey Marketing Strategies provided updated information on the Linda Chancey listing, adding millions of dollars of features and improvements, the zestimate hit $3.1 million within a few hours.
While wildly inconsistent, at least the site pays attention. Not the true value, but a significant improvement. Who knows what tomorrow will bring?
One of the most embarrassing Zillow features is to have a market segment identified as “pre-foreclosure.” In Tennessee, real property is collateralized by an instrument known as a deed of trust, the equivalent of a mortgage. In the deed of trust, there is language stating what would happen if the borrower defaults.
Many closing attorneys use poetic verse – with apologies to Keats, Yeats, Byron, et al – and explain the process thusly:
“If you don’t pay
“You cannot stay,
“And they will take your house away”
The deed of trust takes about 13 pages to outline the what that three-line poem so apply and succinctly describes.
One piece of the puzzle is to post the intent to foreclose in a publication like, for example, The Nashville Ledger. Once posted, anyone, including Zillow, may use the information as they like. Many bargain hunters shop the foreclosures each week, hoping for a sale resulting from a failure to pay property taxes that would allow a $1 million house to sell for the $20,000 in unpaid taxes.
Zillow, through whatever means it uses, decides that some homes are in pre-foreclosure, a term that holds neither water nor credence. It’s a made-up term, like zestimate.
Soon, the owners are inundated with calls from people who hope to buy it for what is owed on the property.
For example, there could be a property worth $600,000, and the owner might owe only $200,000. The site shows both numbers, and unseasoned bottom feeders hope to get the house for what is owed. In some cases, unwitting buyers, fearful of the foreclosure process, fall victim to the scum’s scam.
In most cases, the hopeful buyers attend the auction that was advertised and learn that the owner had made the necessary payment to keep the house.
Sale of the Week
John Hendon, a Realtor with Coldwell Banker Barnes, has been in the trenches of real estate wars, battles and skirmishes for years and remains undaunted in his mission of providing superior service to his clients and fellow Realtors.
Hendon knows his way around houses, but even he must have been impressed with his most recent sale at 120 Woodward Hill Place, a gated community off the Davidson County of Old Hickory Boulevard across from Maryland Farms. This 10,873-square-foot mansion has five bedrooms with seven full bathrooms, each with its own whirlpool tub.
With four half bathrooms scattered among the square feet, there are 11 commodes in the home, including the bathroom at the pool house. If a person has to go, he does not have to go far.
The salt water in the pool should be safe, as should the gold onyx tiled floor in the master bathroom.
The home was described by Hendon as a “stately European style home” and includes a terrace-level in-law quarters – allowing everyone some privacy – and an elevator that stops at all four floors. One rule of thumb for pricing elevators is that they cost approximately $10,000 per floor.
The entire community is serviced with underground utilities, a term often bandied about. Interestingly water, sewer and gas are always underground. Therefore, when a community is described as having underground utilities, it refers mainly to the electrical lines, and those are buried in this neighborhood.
Since squirrels and birds chewing and gnawing through power lines is the leading cause of outages, underground power lines reduce the number of occurrences. The only problem is that when there is a problem, is more difficult to locate with no carcasses dotting the landscape or lines hanging limply.
The sellers had paid $2.2 million for the home, which sold this time around for $2.6 million, even though Metro had appraised it at $2,399,800. Perhaps with this sale on the books, Metro can catch up, or at least muster a couple of hundred dollars to push the price to a smooth $2.4 million.
Many bargain hunters want to use the Metro appraisal as a means of determining the values of houses. While better than Zillow, the Metro assessments and appraisals are not an effective manner to evaluate properties.
Richard Courtney is a licensed real estate broker with Christianson, Patterson, Courtney, and Associates and can be reached at email@example.com