Popular real estate tool Zillow Zestimate which is trusted by millions of buyers, real estate agents and vendors shows that Zillow CEO has over paid for his new luxury millionaire listing.
Has the CEO over paid or is Zestimate simply weak on high end valuations?
Spencer Rascoff spent a cool $20 million for his six-bedroom mansion in Brentwood. At that price point, it was one of the most expensive sales of 2016. Given that the online real estate company is headquartered in Seattle, Rascoff’s big purchase is a bit of a surprise. Even more surprising, his own company’s price estimator suggests Rascoff overpaid a bit for the nearly 13,000 square-foot home.
The executive celebrity MTV style crib was renovated by Ken Ungar. The property is gated and tucked behind hedges. It includes a theater with stadium seating, fitness studios, a wine cellar, a two-bedroom guest house and a large rolling lawn.
The listing brokers on the sale were Mauricio Umansky and Santiago Arana of the Agency.
In February, Raskoff sold his Seattle home for $1.1 million. He sold at a profit, after purchasing the property for only $768,500. Yet that house sold for roughly 40 percent less than Zillow’s Zestimate of $1.75 million.
The company’s data coverage and accuracy web page indicates that there are 102.7 million homes with Zestimates on Zillow. Nationally, the Zestimate has a median error rate of 7.9 percent, which means half of the Zestimates in an area are closer than the error percentage and half are farther off. In Seattle, the median error is 6.1 percent.
The Rascoff property, which the CEO was not living in at the time, falls into a category of about 20 percent of sales in which the Zestimate misses the sale price by more than 20 percent.
Zillow
Zillow is the most popular online real estate information site, with 73 million unique visitors in December. Along with active listings of properties for sale, it also provides information on houses that are not on the market. You can enter the address or general location in a database of millions of homes and likely pull up key information — square footage, lot size, number of bedrooms and baths, photos, taxes — plus a Zestimate.
Shoppers, sellers and buyers routinely quote Zestimates to real estate agent and to one another — as gauges of market value. If a house for sale has a Zestimate of $350,000, a buyer might challenge the seller’s list price of $425,000. Or a seller might demand to know from potential listing brokers why they say a property should sell for just $595,000, when Zillow has it at $685,000.
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Author
Caz McDonald