As you probably know, Zillow has become a buzzword in the real estate community over the past few years.  Millions of consumers use their website each month to search for homes that are currently listed for sale, as well as to get an idea of the value of the home they are currently living in.  Over the past year, we have fielded literally hundreds of phone calls from folks that have found one of our listings on Zillow, and we've always been happy to provide them with the details and answer any questions they may have regarding our listed properties for sale.  In recent months, however, we've noticed a surge of calls from consumers that are calling about listings that closed escrow 6,9,12, and even 24 months ago.  Needless to say, it's been very frustrating for these folks, as they are under the impression that they had finally found their "dream home", only to be told that it sold several months/years ago.

Just yesterday, it all finally came to a head for me, and I felt it's time to show the consumer what is really going at Zillow....

We closed escrow on our own personal home on October 2, 2012.  We've since done quite a bit of remodeling, and plan to stay here for many years to come.  Yesterday, our neighbor across the street stopped by the home and said, "I noticed your house is for sale.  Have you received any offers yet"?  Of course, I told him that our house was not for sale, and asked him where he heard this.  "I saw it on Zillow.  It says that your home went on the market with an asking price of $574,000 on March 11th".  Really?  At first I didn't believe him.  Surely it must have been another home in the neighborhood.  I asked him to come inside, as I wanted to pull up Zillow on the computer and show him that he was confused.  Lo-and-behold, he was right!  There was my home, on Zillow, just listed 9 days ago as being "For Sale", with an asking price of $574k, just as he said.  The agent that had the home listed when we bought it was still showing up as the listing agent for my home.  Did it tick me off?  You bet.  Did it surprise me?  Heck no!  I'll explain why, but first, here is a screen shot of what we saw....

zillow malapai


I decided to do a little research (go figure).  As of today, the Arizona Multiple Listing Service (ARMLS) shows that there are 56 homes that are active (no contract written as of yet) in the 85028 zip code.  Zillow shows 96 active listings (42% more than what is actually available).  When you look at Phoenix as a whole, ARMLS shows 1,766 homes actively listed on the market for sale with no contract written, and Zillow shows 3,776 (a whopping 52% more homes than what is actually available).  Scottsdale doesn't fare much better, with ARMLS showing 1,291 homes for sale, and Zillow claiming that there are 2,551 homes available to purchase ("only" off by 49% on this one).

So, the question is...Why does Zillow overstate the amount of available homes in virtually every market in the U.S.?  Zillow will tell you that it's due to lazy agents that don't update their listings, or that the source of their listing feed is inaccurate.  Or, they say that if they had a direct MLS feed for their listings, these inaccuracies wouldn't occur.  Today, I'm calling BS.

To understand Zillow, you need to understand how they make their money.  It's quite simple actually.  They charge real estate agents to be featured as the agent to contact for every home they have listed on their site.  This is done by charging the agent for the amount of "impressions" they received (i.e. how many times the agent appears next to a listing when a consumer is searching).  The site is set up to make it look like the agent to contact is in fact the listing agent.  How do we know this?  Because in 75%+ calls we receive from consumers calling regarding our listings, one of the first questions they ask is, "Are you actually the listing agent"?  Basically, after spending hours calling on home after home (hoping to talk directly to the listing agents), they come to find out that they have been deceived over and over again.  Or, they have come to find out that 9 out of the 10 properties they called on were either sold several months ago, or are already under contract.  The good news is, consumers are smart, and they are catching on to the game.  Case in point...Our company receives about 25% of the calls we received a year ago from Zillow.  Consumers are finally figuring out that the best place to search for homes that gives the most accurate up-to-date information is through an agent's search on their website.

So, why do they overstate the amount of listings available to the consumer by as much as 50%?  Traffic.  In marketing to agents, they make it a point to tell them that they receive 30 million+ unique visits per  month.  Again, simple math...The more listings that are on the site, the more traffic they get, and the more "impressions" they can sell.  Who cares about the accuracy of the data, right?

As a consumer, I leave you with one question...Do you feel it's in your best interest to search for homes on a website that has an established accuracy rate of 50%?  Of course not.  My advice is to use a search engine that gets it's information directly from the local MLS (i.e. and agent/brokerage website such as ours, at  Why waste your time calling on homes that aren't available?

Part 2 of 2 coming soon...The Inaccuracies of the Zillow Zestimate....