The Quick Start Guide
By: David Gibbons, Director of Community Relations | September 8, 2006
If you’ve ever shopped at IKEA,
you’ll understand the importance of reading their instructions before
assembling your new furniture. Same with a new cell phone, digi-cam or ipod.
So, when you use automated
valuation modeling software, you read the manual … right?
Yes, I’m talking about Zillow’s user’s manual. To get
there, just click on the big “How To Use Zillow” tab at
the top of any page. Most of your questions should be answered in either the Zillow Essentials
section, the Questions
page or the Glossary,
which naturally kicks off with the letter “Z”.
Below you’ll find my personal selection of the 10 most helpful
snippets from our user’s manual, or what I would consider the quick start guide to
Zillow and Zestimates. This list addresses the most common points of confusion
and misperceptions
about Zillow. Enjoy …
- The Zestimate is really a starting point in figuring out the true value of a house. A variety of things can affect the accuracy of the Zestimate. It is an estimate of the worth of a house today, given the data we have available.
- The more attributes we know about homes in an area (including yours), the better the Zestimate. It’s true, we’ve never been to your house, never seen your expertise with colors and landscaping. Only you know those things. To correct for this, we offer a tool called My Zestimator that allows you to adjust the Zestimate according to specifics about a home.
- We don’t have homing pigeons flying from land parcel to land parcel to come up with the Zestimate for a house, but we DO have statisticians who … live and breath valuation models and tweak algorithms to get us closer to actual market value.
- If a home does not appear on the satellite map, it means we do not cover that area with our aerial maps — we’re sorry! We have geographical data for most homes in the
- The Zestimate is not an appraisal and you won’t be able to use it in place of an appraisal, though you can certainly share it with real estate professionals. Zillow.com does not offer the Zestimate as the basis of any specific real-estate-related financial transaction.
- To measure the accuracy of the Zestimates, we’ve gone back in time and compared the historic Zestimates with the actual transaction prices of homes that sold. Of course, to a certain extent this depends on the accuracy of the home data we receive; see our Data Coverage and Zestimate Accuracy table.
- The Zindex … is the median Zestimate valuation for a given geographic area on a given day. Essentially, it is the middle point. Exactly half the Zestimates for a region are below this number and half the Zestimates are above it. To view a Zindex, go to the “Value Any Home” search field and enter your address. Then click “See home details,” then “See more graphs & data.”
- Zillow also identifies comps or comparable houses in calculating the Zestimate and in the My Zestimator tool. The comparable homes (or “comps”) are selected based on recent sales and facts about your house (e.g., location, square feet, number of bedrooms, etc.) Every address has a set of unique comps.
- The
- We may be unable to come up with a valuation for your home because we do not have the (necessary) house transaction history. This is possibly because your house is in a “non-disclosure” state where transactions are not publicly reported.
Let us know if there’s anything we don’t answer in “How to Use
Zillow” that you think we should — either in the comments below or via feedback.
I hope this summary was useful.
- Stumble it!
- Categories: FAQ, Zestimate, Zillow
Comments
8 Comments so far
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finance girl on September 8, 2006 10:53 am
Hey there you all likely also factor in these 2 data points:
1) the topography (e.g. steep hill lots won’t net as much as flat lots in general)
2) arterials and collectors: homes on those won’t net as much due to traffic exposure.
Love Zillow, big fan, talk about you all to everyone!
patricia on September 8, 2006 12:10 pm
do you include as a factor the environment? i mean like if the house has quick access to the school or the hospital or some other important institution.
fin_indie on September 8, 2006 5:10 pm
GREAT post. You guys have been getting the snot beat out of you because people don’t understand what Zestimates are and how it should be used. I know over time that valuations and coverage will improve, but they still will never be 100%. Who can predict that a house burned down? (I’m sure you’ve already seen that criticism…)
BloodhoundBlog on September 8, 2006 8:34 pm
Incremental movement toward a blanket Zillow.com disclaimer?
Today brings a game effort by David Gibbons of Zillow Blog to address Zillow.coms disclosure/disclaimer issue. The problem for me is that the material he cites is at least one click deeper than where he puts is and two clicks deeper than where i…
maj on September 9, 2006 9:06 am
Why is the Zestimate model so poorly designed?
Two examples:
http://www.zillow.com/HomeDetails.htm?city=OAKLAND%20&state=CA&zprop=24819943
This house sold for $1.15M in June, but the Zestimate ignores this, overstating the June Zestimate by over $100k
http://www.zillow.com/HomeDetails.htm?city=OAKLAND%20&state=CA&zprop=24819986
This house sold for $1.16M in August, but the Zestimate ignores this, overstating the August Zestimate by almost $200k.
Is Zillow intentionally skewing the numbers up to cater to its customers? I’d say that is, on the whole, doing its users a disservice. Please fix the models before we are expected to take these numbers seriously!
David G from Zillow.com on September 9, 2006 9:30 am
Finance Girl and Patricia —
You ask similar questions about an interesting topic that may warrant a post of its own.
The environmental house attributes that you’ve asked about, like proximity to arterials etc. are factored into the Zestimate — they are implicitly included in the Zestimate model via past and comporable sales data and via the various local indexes we create to help calculate Zestimates.
This is why the accuracy of the Zestimate relies not only on the accuracy of the house facts we explicitly factor in (like number of bath rooms). Zestimate accuracy also improves with completeness, freshness and historical range of the sales transactions we store. When we say that Zestimate accuracy will get even better over time, and with access to more data, this is what we’re talking about!
Of course, where we don’t have much historical information, you can calculate the impact of these factors yourself by choosing appropriate comps for the house in the final step of the MyZestimator tool.
David G from Zillow.com on September 9, 2006 10:19 am
Fin Indie —
Thanks. I know that the vast majority of the people that visit Zillow “get it”, and that the majority of those who don’t won’t jump to their own conclusions and will read our help pages. Despite that, we still have patrons like …
Maj —
What can I say? Please read this post. Other than the raw data you see on the website, nothing else is factored into Zestimates.
Specifically, no-one is “intentionally skewing the numbers up” — or down for that matter. (I did hear a rumor that the Illuminati were considering opening an online discount Real Estate brokerage - but that has not been either confirmed or denied).
Regarding these two houses; you should see (on the details page) that Zillow diplays the recent sales transactions you’ve asked about for both of the houses — and that those transaction values are around the lower end of their Zestimate’s Value Range — as you’ve noted. You’ll also find other houses on Zillow where recent transactions are on the upper other end of the Value Range — and you’ll find that most transactions fall somewhere in the middle of the range.
The recent transactions you query are definitely factored into the Zestimate but what we don’t do (and won’t) is to a) retroactively “correct” Zestimates and b) use only the last transaction value as an indication of what the next transaction value could be — it’s unfortunately not that easy.
Son Nguyen on September 9, 2006 12:49 pm
It would be nice to have the option to specify in the advanced search the “Construction quality” rank