Photo of couple shopping on the computer
The Internet has made shopping for a new home much easier, but buyer beware! Not all real estate websites are created equal.
Since the dawn of the Internet, entrepreneurial minds have delved into markets for services that would fit nicely in cyberspace, and at the same time, turn a profit.

Real estate may be the most crowded market.

Before the Internet, home shoppers would largely rely on their Realtor to bring suitable housing options for their review. Today? Surveys report more than 90% of home buyers look for homes online. That number is rising.

The problem for consumers, is that not all real estate data is reliable.

Each listing is a contractual agreement between the homeowner and the real estate broker. Of the 538 Louisville brokers with transactions in 2012, Semonin is the largest with 13.80% of the business. Re/Max Properties East is second with 7.68%.

Listings are posted first to our local MLS, which is managed by the Greater Louisville Association of Realtors. Then, member brokers like Semonin, Re/Max and others “pull” the data to their own websites. Realtor.com also gets their listings in this manner.

But national, non-affiliated sites like Trulia and Zillow are now coming under fire for publishing inaccurate data. Because they don’t always get their listing data directly, their sites have a number of problems.

The numbers don’t lie

WAV Group just published the results of a study they preformed, call The Accuracy of Real Estate Websites. While this isn’t a surprise to real estate professionals, consumers should take note.

To start, the portal sites Trulia and Zillow are only showing about four fifths of the true active listings. In some cities, it was far worse.

Percentage of Agent-­‐Listed Homes for Sale Found on Each Site, by Market
Local websites have have 100% accuracy in displaying active real estate listings while the national portals have
far lower success rates.

The local broker sites also get those listings updated each day. Trulia and Zillow update theirs at least one week later!

Pulling down cancelled or sold listings is even worse, as 37% of Trulia’s listings are just plain wrong.

Computers don’t know what your home is worth

Now, don’t get me started on the Zestimate!

The mildly funny branding of Zillow’s home valuation algorithm is a menace. Without conducting a true Comparative Market Analysis (CMA), data aggregators use automated valuation models (AVM) which are far less accurate—often by a disturbing amount.

At random, I selected a home for sale on Zillow in the 40245 ZIP code. Look at how wildly this website thinks the value of this home has fluxuated in the past 5 years, to say nothing of what it believes of the ZIP code.

Sample real estate Zestimate from Zillow.com
According to Zillow, this home sold for $212,000 in August, 2009. This data is valid, and easily captured from public PVA data. But then then Zestimate spiked to $229,000 just nine months later, only to fall back to $210,000 eight months after that. Where do they come up with this?

The moral of this story is that when you start to look for your next new home in Louisville, either use a local agent’s direct MLS feed or one of the broker’s sites.

And the next time you want to know what your Louisville home is worth, for heavens sake, don’t use Zillow.

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Tre Pryor
Tre Pryor is an Internet-veteran turned tech-savvy Louisville Realtor with ReMax Champions. Mr. Pryor is the recognized Louisville real estate expert writing for both InsiderLouisville.com and the #1 real estate blog in the city--LouisvilleHomesBlog.com. Most of all, Tre is a trustworthy professional who wants you to see your dreams fulfilled!

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