In April of this year, Zillow CEO, Spencer Rascoff, purchased one of the most expensive homes in California. Rascoff purchased a large six-bedroom mansion in Brentwood.
The home had recently been remodeled and was situated on a half-acre lot with a full complement of amenities. As nice as it sounds though, it does come with a good dose of irony as the cherry on top.
An uneducated Zestimate
According to Zillow’s own pricing tool, Zestimate, Rascoff overpaid for his California mansion by more than one million dollars. If that wasn’t enough to make you question the validity of the Zestimate tool, The Real Deal adds more fuel to the fire, reporting, when Rascoff sold his home in Seattle, it sold for $650,000 less than the nearly $1.7 million Zestimate.
In all fairness, however, he did make quite a profit, considering he originally paid $768,500 for the Seattle home.
Sadly, it’s happened before
This isn’t the first time the “Zestimate” tool and other similar tools, have been under fire. When you Google “Zillow” along with “entertainment purposes” you’re met with a bevy of results regarding the tool’s inaccuracy. Unfortunately, this is not the first time an aggregator founder has been called out.
Founder and former CEO of ForSalebyOwner.com, Colby Sambrotto, listed his 2,000 square foot New York condominium on FSBO and other online classified sites, but after six months of no luck, he opted to hire a real estate broker.
Once he decided to stop DIY-ing it, his home sold for more than the asking price.
To read more about Sambrotto’s ordeal, we covered it here. Proving that sometimes, DIY-ing it is harder than it seems.
Realtors ring in a win
More than anything else, what this proves is that these estimating tools have flaws. They are not carved-in-stone, 100% accurate. They are meant to be a ballpark figure to determine a starting place and in some cases, they aren’t even in the ballpark.
This again validates the need for Realtors to navigate pricing, listing, and all the other issues that can arise. There is nothing wrong with DIY-ing it, but when it comes to real estate, consumers could wind up losing a significant portion of their investment if it’s just ballparked.
This is why Realtors loved the story.
So should you give two hoots that Rascoff overpaid for his house? Nope, it’s just a salacious story that was spread around by those who hate Zillow, and defended by those who love it. We doubt anyone was converted to the other side by this news.
But it will be a perpetual talking point for those seeking to promote the Realtor brand. Brokers will cite it in marketing, agents will cite it on listing appointments, practitioners will note it at networking events for years.