I recently amused myself – and a few others – when I Facebook trolled the CEO of Zillow, Spencer Rascoff for offering a million dollars to anyone who could fix their “Zestimate” algorithm. My solution was simple –
“Hire a REALTOR®”
Then I suggested he send the million dollars to the Beverly Hills/ Greater Los Angeles Association of REALTORS® – where yes, I am the CEO, and yes I am technically a paid cheerleader for the industry.
Despite all of that – as well as my nature to be a smartass – I stand by my statement.
Every Property Is Different
Every property – be it a space in a building, or a stand alone home – is different. From the orientation of the lot which can be affected by wind and rain patterns that wear differently on a property to the maintenance of a given room in a given unit, the smallest differences can vastly affect the valuation of that unit or property.
Take, for example, a small crack on a wall. Some questions that arise are:
- What side of the property is oriented for stormwater drainage?
- Is the crack in the upper corner of a room likely to indicate a broken slab from drainage or just poor maintenance/ installation of drywall?
- Does that same crack run a higher or lower risk of letting moisture seep into the walls?
- Does that moisture leak indicate a likely mold problem?
- Is that likely mold problem a small problem, or one that could require major remediation?
And that represents just one crack on one wall in one room of one unit on one property that can not be seen from a plot map and a satellite picture taken some time in the last six or so months.
How Exposed Do Consumers Want To Be?
Even the most complex algorithm can not bring into account what a professional intuitively knows about the conditions of a property. They’ve gained this expertise by spending time in countless properties, and being able to identify similarities to conditions found in recently closed comparable properties.
That isn’t to say that an algorithm can not be devised to get closer than what the Zestimate currently produces, but accuracy that consumers can rely on would require either:
- A serious inspection of the property by an accomplished, trained, and experienced professional; or
- A truly invasive collection and association of consumer data, data available through APIs with as many other property related apps as possible, collecting all available government recorded information, recent photography/ video evidence, complex scenario modeling and AI to address concerns – and then local service market information to factor repair costs.
Stay Focused On Your Success
While I applaud Mr. Rascoff and the Zillow team for trying to deliver a better product to the consumer, Zillow should focus on their core value is in the marketplace – connecting the consumers with reliable information and qualified professionals to serve their needs.
Attempts to replicate or replace expertise with an impossibly incomplete picture of a property only serves to further create confusion and distrust with consumers by giving them unreliable and inaccurate information that contradicts thorough and adequate evaluation.
When it comes to the largest purchase that the average person makes in their life – that is an irresponsible if not dangerous course to chart.