Why in the world would an agent include iBuyers and Zestimates in their CMAs?
An Inman piece titled “Most agents aren’t including Zestimates, iBuyer info in CMAs” elicited a lot of negative response from real estate agents. But because there is interesting data and insight in this report, agents would be well-advised to read it.
The article was based on a survey conducted by W+R Studios (maker of the popular comparative market analysis software Cloud CMA). The survey results were compiled in a report, “Best practices for CMAs and listing presentations.”
A few commenters on the Inman piece explained why they at least look at Zestimates and sometimes mention them in listing presentations. The vast majority of commenters sounded off on the evils of Zillow and the Zestimate.
As this is an opinion piece, I’m going to share mine about why you should be including iBuyers and Zestimates in your CMAs and listing presentations.
What Consumers Are Seeing
There are a whole lot of real estate consumers who look at Zillow. Most sellers have looked at their Zestimate. Most buyers are at least aware of the site, and countless use it as a primary source of listings.
You might not like this, but it is what it is—Zillow has the eyeballs and attention of today’s homebuyers and sellers.
That is why you should include mention of the Zestimate in your listing presentations. If your buyers or sellers are looking at the site, you need to understand what they are seeing. That does not mean you have to love it or even tolerate it. But understanding what your clients and prospects are looking at helps the astute agent prepare for any potential objections.
During my tenure at Zillow, I can’t count the conversations that started with agents lamenting the fact that some sellers begin a price discussion with, “But Zillow says my home is worth … ”
Want to know the best way to handle that objection? Understand what the Zestimate is and is not.
Understand the accuracy of the Zestimate in your market (the real accuracy, not what you think, wish or hope it is). Note that Zillow provides Zestimate accuracy details.
It’s Called a Zestimate, Not a Zappraisal for a Reason
It says, multiple times, that the Zestimate is not an appraisal, and it shouldn’t be used to value a home.
Even the most ardent Zillow believer cannot argue when you point out a sentence like, “The Zestimate is a starting point and does not consider all the market intricacies that can determine the actual price a home will sell for.”
You know who does consider all the market intricacies? You do. That’s Zillow itself telling your seller not to use the Zestimate as a list price. Objection handled, closed, finished.
No one, including Zillow, W+R Studios or me, is saying the Zestimate should be used as a comparable in your CMA. Of course it shouldn’t be, that’s not its intent or purpose. But to ignore it is to ignore something your clients are looking at and wondering about.
So you address it upfront, leave out your personal feelings about Zillow, and put any objections to rest early in the process. The listing presentation is the ideal time to address it with sellers, and the CMA is the perfect place to have it on record.
Your Seller Is Looking … Even If You’re Not
If you don’t want to hear this from the biased former Zillow guy, here are some of the comments on the Inman article from real estate professionals:
I can’t imagine NOT going into a listing presentation at least aware of prominent AVMs like the Zestimate … Your seller is looking that stuff up even if you aren’t. —Brian Adams
Since buyers look at Zestimates and sellers know about Zestimates, why wouldn’t you address the positives and (mostly) minuses about them at the listing appointment? —Pat Tasker
Some agents also seem to fear iBuyers. You need to help your sellers understand the pros and cons of iBuying. This is a prime opportunity to display your value proposition to clients.
In the markets where iBuyers are active, I can assure you that sellers know at least a little something about them. That’s what is dangerous–knowing a little something about a complex topic.
Put in the effort to educate your clients, even if you are not in a market where iBuyers are active. Educating clients and taking an opportunity to show your value is never a bad idea.
Jay Thompson is a former brokerage owner who spent six years working for Zillow Group. His weekly Inman column published Wednesdays.
by Jay Thompson