Using Zillow and Facebook as an Appraisal Data Source… Really?

Beth Sigg

Northwest Real Estate Services

We knew it would happen. The day we reviewed an appraisal which listed data sources way beyond the usual “auditor or public records”, “MLS”, and “site” or “drive-by”! Now appraisers are quoting Zillow, Trulia, or other real estate websites as data sources for the subject property and/or the comparable sales! The blogs and Facebook groups are burning up with discussions on whether these non-MLS websites are reliable data sources in appraisal reports.

Let’s take a look at WHY an appraiser might use, and then quote, a website like Zillow.

There’s an unprecedented number of For-Sale-by-Owner properties.

With an internet-savvy population, the number of FSBO’s being offered is at an unprecedented high. More than ever before, consumers are learning how to post their homes themselves on websites and on Facebook. They’re staging their homes, taking photos and videos, and writing catchy descriptions. They’re showing the property, negotiating, and using real estate agents’ paperwork like purchase contracts, seller disclosure forms, and inspection addendums to put their own deal together. It’s true that you may be missing valid sales in a neighborhood if you fail to search these websites.

There’s exposure for the appraiser who does not search on these websites for information on the subject property you’re appraising, or on the non-MLS sales.

• • When an FSBO is your subject property:
    If you’re appraising for a sales transaction that does not have agent involvement, the non-MLS websites can give you days-on-market, photos, and descriptions for the subject property.
  • When FSBO’s are sales:
    As a result of successful sales handled without agent assistance, the appraiser searching only their local MLS for sales in a neighborhood may be missing valid sales. Just because a sale did not result from agent action, putting a deal together on behalf of buyers and sellers, does not mean that it’s not a valid, arm’s length sale.

These websites can give you an easy path to data verification.

Although some would argue that these sales lack verification that is required by USPAP, websites like Zillow and Trulia may give seller phone numbers/email addresses that can solve the verification requirement.

What information can you acquire from these sources? Asking price, room count, updates, photos to review, and more are there. Days on market is also typically listed. Contact numbers and email addresses for the seller are typically provided, making verification easier.

Researching these websites doesn’t mean that you must use their data.

Even if you search for sales data on these websites, there’s no requirement that you use those sales. However, it will give you a better feel for offerings and sales in an area if you are aware of more than MLS sales. And if those properties have been adequately exposed to the market and have sold as arm’s length transactions, you may want to attempt verification by contacting the seller.

Information from these websites can be useful as a starting point in your data search.

In markets with inadequate MLS information, areas with no access to an MLS system (Yes, they’re still out there), and in non-disclosure states, information from these websites can be useful as a starting point for data. If the subject property for your appraisal assignment was not offered by an agent, but rather by the seller who used these services, pull up what they posted and make it a part of your work file, just as you would make MLS data part of the file.
These services are not going away anytime soon. With Zillow buying up homes, linking buyers and sellers with ease, and even entering the mortgage lending industry, they’re here to stay. Why not use their information as one more data source in an appraisal report!