Buyer Beware! Zillow/Trulia – look nice, but are they accurate? Web 2.0 mashups more snazz than substance.

There are several new Web 2.0 statups that have emerged that essentially try to revive old formulas on top of google maps (and other web services).   But BUYER BEWARE, the same formulas for buyers apply in the Web2.0 world as in any other — be sure the information you are being presented is actually true.  In the past we had to worry about slick pro-active real estate agents, today, we have to worry about slick pro-active Web 2.0 services!

Take for instance, zillow.com — the slick and impressive service that will serve you up a google map view of homes in the area you are interested in, and give you an approximation of the value of the homes in that area.  Now how is a consumer, or a seller for that matter, supossed to use this information?   I found the unique interface, and use of google maps very compelling — lending the service some sort of credibilty… until I searched in my own neighborhood.  The values weren’t even close… it’s as if the data for the neighborhood is over a year old.  Surprise, zillow can offer you what every other home valuation service has offered over the years — out of date and irrellevant home values. 

 The real estate market is driven by many factors, and I have yet to find any online service that can properly value a specific home.  To be clear, each offers valuable information that you can use in your overall research (schools, flood info, trends, comps), but folks like Zillow are dangerous from my perspective because they try to actually proclaim specific individual home values.  In my neighborhood, zillow was consistently 20-40% off on a home by home basis.

 Take Trulia.com, far less presumptous than Zillow — but still offering out of date pricing information.   It does offer you current listings, but unless there are lots of homes on the market in a particular neighborhood, it becomes difficult to assess those prices.  The collection of information *is* valuable, but when making a purchase of this size — you have to pound the pavement as well as the internet.

I just imagine a midwest couple who just got a great job offer in the SF Bay Area looking up Los Gatos neighborhood based on schools, and commute.  They would go to zillow.com, and in looking at a neighborhood they know nothing about, figure that they could buy a decent 3bedroom home in the Los Gatos school district for 800 or 900k. 

Think again… you would be lucky to find a lot for under 1.2m (recently a lot with a teardown sold for 1.2M) — yet, on zillow that same lot showed for about 800k.

Conclusion… BUYER BEWARE.  These services do offer some great information, and in the hands of a well-informed and skeptical user, very valuable.  However, when these services move from beyond information, to “proclamation” as in the case with Zillow, a skeptic might say they are bordering on deception.