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
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.
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 accurateoften 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.
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.