Zillow vs. RedFin: Which home appraisals are less wrong?
The race to deliver a more accurate home valuing tool is heating up between cross-town rivals Zillow Group Inc. and Redfin.
Last week, Zillow announced a $1 million prize in an open contest to developers to improve its “Zestimates” tool. The home appraisal tool has recently come under fire amid multiple lawsuits from home sellers, claiming that its inaccuracy was costing them money.
Redfin’s estimate tool
Jani Strand, a senior vice president at Redfin, added fuel to the fire and told Benzinga, “There’s no reason for homeowners to wait for a more accurate estimate. The Redfin estimate is already here.”
Strand was referencing a third-party study conducted by SSRS earlier in the year that stated in over 5,000 home sales evaluated, 64 percent sold within 3 percent of the price predicated by Redfin, compared to 29 percent for Zillow.
“Our findings are clear: Redfin performed significantly better than Zillow and Homes.com at predicting home-sale prices,” said Dr. Aniruddha Banerjee, SSRS’s senior vice president of advanced analytics. “We hope that others attempt to replicate our results. Our methodology for coming to this conclusion was consistent with the rigorous approaches taken at academic institutions.”
The last word, however, will be given to Zillow on this one: The company states that there are far more home values available on the platform – over 110 million Zestimates compared to nearly 70 million on Redfin.
“Typically, when you’re looking at accuracy for a computer generated home estimate, you are looking for two metrics. Hit rate – How often does a home have a valuation on it. The second is how accurate is the estimate – the concerns we expressed was on both fronts,” Zillow Chief Analytics Officer Stan Humphries told Benzinga. “Redfin produces estimates on far fewer homes than Zillow. According to the announcement, you will find an estimate on Zillow 100 percent of the time and on Redfin you can find it 83 percent of the time.”
“In terms of accuracy, generally there are a couple different times you can evaluate – Before the home is listed and after it is listed. In our research, we did both. Before a home was listed we found Zillow was far higher,” he added.
“What we are trying to do is create a value estimate that is independent from the either the buyer or the seller in the transaction. We are trying to create an unbiased neutral opinion of value. Redfin is distinctly not doing that. After a home is listed for sale, the listing price is the primary factor in determining their valuation, if you are the seller it is great, their opinion is great, if you are a buyer that’s a problem,” concluded Humphries.
It is clear that there are several different metrics that go into determining which is the best tool to properly appraise home values. Both companies are committed to delivering the most accurate tool to appraise properties and continue to improve the technology.
Although currently, it may be best to use as many tools as possible when determining your home’s value or take virtual appraisals with a grain of salt.
About Empire Appraisal Group, Inc.
Establish in 2005, Empire Appraisal Group, Inc., is Broward County’s leading residential appraisal company as a result of their accurate and reliable appraisals, excellent customer service, and quick turn times. When working with an appraiser, integrity and professionalism are essential, and Empire Appraisal Group has a well-established reputation for providing the best appraisal experience. Daniel Lindeman, the Chief Appraiser, is considered one of the top property appraisers in Florida, with nearly 15 years of expertise and 8,000+ appraisals to his credit.
We ‘specialize’ in helping people who need appraisals for estate purposes, divorce, bankruptcy, FSBO’s and more.
We also work closely with realtors to help establish listing prices, these pre-listing appraisals ensures sellers get top dollar for their home.
In addition, to homes of all shapes and sizes, we also appraise condos, multifamily homes, boat docks, land, as well as specialty properties. No job is too big or too small, from manufactured homes to mansions.
Call Empire Appraisal Group directly with any questions concerning your real estate values at 561-441-9298. Also, check out our ‘Reviews’ page and see what others are saying about Daniel Lindeman and Empire Appraisal Group, Inc.
We provide residential appraisal services to all cities in Broward County: Parkland, Coral Springs, Coconut Creek, Dania Beach, Cooper City, Davie, Deerfield Beach, Fort Lauderdale, Sunrise, Hallandale Beach, Hillsboro Beach, Hollywood, Lauderdale by the Sea, Lauderdale Lakes, Lauderhill, Lighthouse Point, Margate, Miramar, North Lauderdale, Oakland Park, Pembroke Pines, Plantation, Pompano Beach, Sea Ranch Lakes, Tamarac, Weston, Wilton Manors.