How accurate are those zestimates from zillow we put them to the test h gas l gas unterschied

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"I fight these on a daily basis,” Dunedin agent Joe Demo says of what the popular online database calls Zestimates. "When people bring it up, I tell them, ‘In my opinion you’ve got a room full of drunk monkeys throwing darts to come up with these.’"

Zestimates have been a financial boon to Zillow, generating hundreds of millions of dollars in advertising fees from agents who pay to link to the site. But the accuracy has come under fire, and company is offering a $1 million prize for the algorithm model that most reduces the error rate on Zestimates.

We put them to the test. The Tampa Bay Times randomly selected 20 houses in the bay area that were under contract in early May but that had not yet closed, meaning the final sale price was unknown. A reporter also noted the Zestimate for each house as of that point in May.

"A lot of times, they’ll come to us and say, ‘Zillow says my house is worth X’ but Zillow hasn’t seen the inside of the house and doesn’t know that it maybe needs significant updating inside," Realtor Liane Jamason said. As an example, she cites an Oldsmar house built in 1985 that sold in June for $395,000 — $62,000 less than the Zestimate.

Like many agents, Jamason ignored the Zestimate. Instead, she compared the house to nearby ones that recently sold in terms of size, age, condition and other factors. The listing price she set — $430,000 — still was higher than the eventual closing price but the house quickly sold after languishing on the market under a prior agent.

"What Zillow did not take into account is that it was so close to Lutz Lake Fern Road that all you could hear when you stepped outside was traffic noise,” Arcuri said. "Zillow just draws a circle around your house and gives you an average for the area — it doesn’t take into account that a house might be cluttered with junk, have crazy wallpaper and purple walls.”

In a lawsuit filed this spring, Anderon says the Zestimate undervalued her house and "created a tremendous roadblock ” to sale. The company’s automated evaluation system apparently used prices paid for houses in a different, less expensive area to come up with its $562,000 Zestimate for a townhome she says is worth $626,000 because of its golf course location.

Anderson, who has since withdrawn her suit and refiled it as a class action, alleges that Zestimates are in fact appraisals. Thus, she argues, Zillow should be required to meet state licensing laws for appraisals and get homeowner consent before posting them online

"We know (Zestimates) might be off," she added, "but this is our very educated guess on what this house might be worth. Most consumers know that, and in the end this might work out a little differently, especially in super hot markets where you might sell slightly higher or if there’s something awkward about the layout, your house might be worth a little less than we thought."

Zillow introduced Zestimates in 2006, and they proved so popular that its web site crashed the first day. The automated valuations are based on real estate listings, updates by homeowners and a range of publicly available information, including sales of homes in a neighborhood. They sometimes take into account factors like a recent bathroom or kitchen remodel.

In May, Zillow invited the "brightest scientific minds" to develop a model that would reduce the margin of error. So far, 1,310 entries have been submitted in the public round of the contest, which runs to Jan. 17. The top 100 teams then will have another year to compete for the $1 million Zillow Prize.

St. Petersburg agent Leslie Trevathan-Ritch sees evidence that Zillow already has "tweaked" its system to make Zestimates more accurate than they used to be. The challenge, she said, comes in areas like those around downtown St. Petersburg with such a wide range of homes — old and new, big and small, waterfront and non-waterfront.