2014 Salesmanship – Using Zillow to Close

    If you think you can ignore property estimated values on zillow.com because they’re not accurate, you’re likely to struggle with both buyers and sellers. Zillow has become one of the top search sites for real estate in recent years. It is heavily relied on as a guide for buyers, and in many cases, even your sellers reference the site. Ignoring the perceived values on zillow.com can cause your strategies to be flawed. So, instead of resisting technological changes like Zillow, embrace them and use them to your advantage.  Listed below are approaches that relate to Zillow.com and how it can be used.

1. Impact on Buyers – Keep in mind a fundamental principle that most buyers apply: “If it is in writing, it must be true”.  In other words, when a buyer searches an address on Zillow.com and a price pops up, the perception is that the price is accurate because it was provided by an objective third party. In reality, Zillow calls their pricing “Zestimates”. They don’t even imply their prices accurately reflect value.  It’s important to explain to your clients, the algorithms used by Zillow rely on generalizations that don’t take into consideration obvious tangible benefits. For example, if a home is 30 years old and has been completely renovated, Zillow.com may not reflect the renovated price. As such, the prices on Zillow.com provide only an idea as to value.
2. Impact on Sellers – All sellers need to be aware of the fact that Zillow.com provides both the list price and the estimated value of a home. They also have to realize that the estimated prices are being considered as reliable by buyers that are searching for information. Because of this fact, sellers in today’s market need our support now more than ever. How else will the values on Zillow.com be countered, if not by you?
3. Supporting Documentation – In some cases, Zillow’s estimated values can be used by an agent to reinforce a point the agent is trying to make. For example, if a buyer thinks they can get a bargain price that is no longer available, Zillow.com could be used to give a buyer a better understanding of the price range for a home. Conversely, if a home seller is being unrealistic about the value of their home, reviewing the “Zestimate” on zillow.com can help get a price reduction by re-setting the price anchor.

    The best rule of thumb to use with technological advancements such as “Zestimates”, is to ask yourself: “What would the impact be on me if I was a buyer (or a seller), and saw the estimated price on Zillow.com?”  The strategy to either exploit or counter the perception should address the answer to that question.