Is Zillow.com your FRIEND or FOE? (St. George Real Estate Morning Drive Radio Show)
On this week’s show Jeremy Larkin and Jesse Poll of The Larkin Group at KW Realty discuss Zillow.com. The fact that Zillow is here to stay, consumers (want) to trust them, and how to determine if they’re your friend or foe when buying and selling real estate!
Below is the actual St. George Real Estate Morning Drive show, hosted by St. George Real Estate Agent Jeremy Larkin, word for word! Enjoy and please share if you find it valuable!
Jeremy Larkin and The Larkin Group @ Keller Williams Realty can be reached by calling 435-767-9821, or emailing email@example.com.
Andy: We are still doing the technical part of things.
Jesse: Yeah, I was having some technical issues here this morning.
Jeremy: We were.
Andy: That is always an issue –
Jesse: All of the above.
Andy: We have got all the, like in this room, if we count our phones, we have like nine computers in this room. There is a laptop. There is like three desktops. We have three phones in the room. I think we are going to be streaming on Facebook Live. All kinds of things. Right, guys?
Jeremy: I actually just hung up with NASA and they have their super computer headed here on an 18-wheeler. So we are going to get that set up shortly, and your mind is really going to be blown.
Andy: Yeah, looking forward to that.
Jeremy: That is not bad, is it? Jesse, can I trust Zillow for my home value? Can we answer that question today?Andy: KDXU news time. 8:35. Welcome to the St. George Real Estate Morning Drive with Jeremy Larkin. We have really just one issue right now and Jeremy Larkin is not in the house yet. I think he is in the house. He is not in the room yet. But we will get things started and start talking about St. George Real Estate. A lot on the mind and what are your thoughts as we get things going early with Jeremy in the other part of the building? You got any ideas for me? He is still working on the technical side of things. Maybe we will keep the music going a little bit longer. If you are in the real estate market, you ought to check in with the Keller Williams team, or the Jeremy Larkin team under the umbrella of Keller Williams Realty, and it is a great time of the year to make that move to maybe your dream house. Or maybe you want to downsize if you are in a situation where perhaps your house is too big. That is kind of where I am at right now. I had raised five kids, but I have got this big old house and only two of the kids are left. So I start thinking about things like downsizing and changing the situation in my household. These are the kind of things that you think about. Dream house. Maybe you want a pool. Maybe you want a pickle ball court in your backyard. Whatever it might be. This is a great time again to contact the Jeremy Larkin Group at Keller Williams Realty. He just made it in the house, so that makes me a lot happier. I do not have to sit here and filibuster a little bit while we wait for Jeremy Larkin to join us. He is here somewhere, and he is looking rather dapper by the way as well. You ready to talk a little bit, guys?
Jesse: Yes, sir. You have got to push play on the other one, too.
Jeremy: Oh my gosh.
Andy: Oh, that is a good question.
Jesse: Yeah, we can.
Jeremy: Yeah, can we?
Jesse: Well, it is actually –
Jeremy: We can answer the question or can we trust Zillow?
Jesse: Well, I do not think you can trust Zillow without doing a lot of homework because they do not know, they do not have access to the real closed data and they do not know what your home looks like or has or anything. I can give you some good examples of that, if you would like.
Jeremy: I would love to hear. No, the listeners want to hear.
Jesse: We just saw a home over in the Legacy the other day, and Zillow says that it is a 4-bedroom, 8-bathroom –
Andy: Eight bathrooms?
Jesse: — so I know for a fact that this home has got three bathrooms.
Jeremy: Ah, the old eight-bathroom home. We know everybody loves that one.
Jesse: So chances are they are giving them probably four grand each for one of those bathrooms, so if they have got five extras, that is what? $20,000 extra that they are getting for their home value or their Zestimate?
Jeremy: Yeah, it is crazy. It is crazy, which is insane, right?
Jeremy: Which is insane. So I had somebody yesterday reach out to us and they said hey, I want to look at my Zillow home value. What do you think my home is worth in Bountiful? I said is your home 2700 feet? They said yeah, the main floor is 2700 feet. What do you think happened, Jesse? What do you think was missing?
Jesse: Their basement because in the state of Utah it counts basements differently and Zillow cannot track that.
Jeremy: Yeah, imagine that. Imagine that, Andy, you go on to Zillow dot com thinking of hey, I am going to find out what my home’s value is. I am just going to go ahead because I heard that Zillow, I saw these Zillow ads, and the Zillow ads are so lovely. They feature these families that are doing great family things like making pancakes. We saw one. We are going to talk about making unicorn pancakes, and we are going to talk about an instant offer program today. And you go on there thinking well, I will see what Zillow says my home is worth, but here is the problem. Zillow only, if you have a basement, they do not show it.
Jeremy: They do not show it. Jesse, what would that mean to a consumer? Value-wise.
Jesse: Oh quite a bit. Probably half as, so on a basement, you will get about 40% more, less value than you will on your main level, so you may be missing 30-40% in your Zestimate value.
Andy: That is a lot of money.
Jeremy: It is a ton.
Jeremy: It is a ton. All right, guys. We are going to do Facebook Live here.
Jesse: We are getting our technical difficulties situated.
Jeremy: We have got it figured out. We had to reboot the system. So just envision, for our listeners out there, I am Jeremy Larkin, host of the St. George Real Estate Morning Drive, and I drove and it was morning and it is beautiful out there. But you are talking about you could be missing 50 to 100 grand.
Jesse: You could. Definitely.
Jeremy: And vice-a versa. It could be over. For a good instance is that bathroom. Their Zestimate is probably is $30,000 over what it should be.
Jeremy: Yeah. Yeah.
Jesse: What it would sell for in the market.
Jeremy: Absolutely. This is an issue, and we just went Facebook Live, so if you want to watch this morning on Facebook, Facebook dot com slash St. George Experts. Facebook dot com slash St. George Experts. Check it out. Actually, you know what? I lied. We are actually Facebook dot com slash Jeremy Larkin.
Jesse: It is on your personal page.
Jeremy: Yeah, I apologize. Facebook dot com slash Jeremy Larkin. We want to answer some of the most typically asked questions that we see in real estate, and the first one is can I trust Zillow for my home value? Now, Zillow is up to something else, Jesse, which is their Instant Offer program. What are they doing?
Jesse: They are going in to markets, and they will actually give you an offer for your home. It is right there. Hang in there. So they will give you an offer for your home and buy it.
Andy: Zillow will?
Jesse: Yeah, they will.
Jesse: And then they will turn around and sell it for market value. So that is a good thing to keep in mind that they are actually going to turn around and sell it so that the chances that you are getting market value for that home are slim and one.
Jeremy: Yeah, they are slim and none, not slim to none. Thank you. So there is a video that I watched yesterday. I guess it was released to YouTube. Zillow dot com slash offers, and here is the fun part. Here is the great part. So many real estate agents love to hate Zillow. They love to hate Zillow because Zillow, of course, is trying to take the real estate agent out of the process very subtly. So instead of running from it, we are just going to talk about it on the program this morning. So Zillow dot com slash offers, if you would like to see what that looks like. People are going to find it anyway.
Andy: Grab the bull by the horns, right, Jeremy?
Jeremy: Yeah, here is the issue. Zillow is going to make you an offer, an instant offer, online, without ever having seen your home. The offer will be subject then to them sending in a real estate professional appraiser inspector and deciding what they really want to pay for it. Okay? So first of all, Andy, if they come in and offer your $400,000 for your home it does not mean they are buying your home.
Jeremy: Right. There will be tons of fine print that says oh, that is subject to this. So here is the fun part. We saw that Zillow was doing it. What do you think we started doing? We said we have got an instant offer program. And the reality is we have an instant offer program. So if you visit Sold in St. George dot com, Sold in St. George dot com, you will see a big old button that says instant offer.
Jeremy: Now here is one of the challenges. So Zillow is doing this. Who else is doing that? IBuyer?
Jesse: IBuyer. Purple Door.
Jeremy: Purple door. So here is what is happening. They are coming in. They are making an offer, and then they are charging a buyer’s premium of some kind which is like 3-5% of the purchase price. Right? There is no commission, air quotes.
Jeremy: Good morning all of our Facebook Live viewers. If you have got questions, we want you to ask them. But they are going in, hey, Andy you should vote for us for Best of Southern Utah. Right there. It is right on your screen. Just two clicks, man. Two clicks.
Andy: I have got to do it now. Yep.
Jeremy: So I was just watching it with Best of Southern Utah. So they come in and they make an offer sight unseen, which is subject to them actually inspecting it and deciding if they want to buy it. And then they charge this strange fee, this strange buyer premium fee, which is just wacked out. Right? So the next thing you know you think are getting 400, but the reality is you are actually getting 360. Let’s flip this on its head. We can bring a local investor in right now from St. George who will make an offer to buy your property, close in seven days, cash, with no strange strings attached. Really simple. They will buy your home. It will sell for blank. You will get blank if they buy it cash. Or we can put it on the market, distribute this thing to every single real estate agent on the planet. Zillow dot com included, smile and a wink. Trulia dot com. Homes dot com. Realtor dot com, all these websites, and we can sell it at market. By they way, in most cases, you will get more selling your home at market. But here is what they do on the Zillow offer ad. They show this dad in the kitchen, and he is really having a good time. He is making pancakes. And then you see he is trying to make a shaped pancake, and it says, excuse me, making unicorn pancakes is hard. And the music plays. But you know what is easy? Selling your home. And he is sitting there and bing, bing, bing, bing. His phone bings, and he is in his apron and he is talking to his child and he looks over and it says you have an offer from Zillow. 365. He goes oh. I hope our listeners can see. Do you see the face? It is the raised eyebrow look. Like hmmm, well that is interesting. Let me finish making these pancakes. So easy. Like hey, just pack up your belongings and they will be here tomorrow. But that is not real. That is actually not real. You have to understand that. So we want to go straight to our consumers here in Washington County and say look, if you want an instant offer, we will make you an instant offer.
Jeremy: Literally right now. We have an investment group who will purchase your home cash. Let’s talk pros and cons. So the pros are you sell your home in seven days, if you want to sell it in seven days. You could sell it in 45 or 90.
Jeremy: The investors are real flexible that way. But if you wanted to be out in seven days, if all the boxes are checked and things work out, then it could close in seven days cash. It is a cash deal. It is not contingent on an appraisal. It is not contingent on a loan. Right? And you do not have to prepare. You do not have to stage. You do not have to make beds. All those things. Now here is the flip side. That is what Zillow is trying to get people to do. Hey, look how easy it is. But see the difference is we are not going to pitch to you that it is just so much easier that you should do it. No, no, no, no.
Jesse: Well, in any part of our life, convenience comes with a cost. It always will.
Jeremy: Right. Right.
Jesse: It always will.
Jeremy: Right. So we would not propose to you that you should be doing this because it is easy. You should be doing this because for some reason it makes sense that you have got to get out of there fast.
Jeremy: Otherwise, we will take your home. We will put it on the market. You will have to do some work. We will require you to do some work because you are going to say to me I want the most money for my home.
Jeremy: And I am going to say well, if you want the most money, then you have to do the most prep work –
Jeremy: — which we are going to guide you. We are going to hold your hand. We are going to walk you down the road. We are going to schedule all the showings with you. Yeah, you are going to need to make the beds. You are going to need to close the toilet lid. All that kind of jazz. If you have got dirty clothes on the floor, you had better just kick them under the bed. I do not know what to tell you. Those things are going to have to happen, and it is going to be a nightmare in some ways, but you probably will not be sad if you get the money at closing.
Jeremy: So just be aware. Just be aware that these groups, Zillow is a big, massive entity. It is a behemoth, and they are a company that is actually running no profit. So it is one of these strange Wall Street things. They are running no profit, but they are multi-billion-dollar corporation, and their goal is to set themselves up as kind of the replacement to the real estate agent, and eventually just have the whole entire thing. So look, people are going to go there. They are going to go to Zillow dot com, look for a Zestimate. Here is what I would say. Go get your Zestimate at Zillow dot com, and then call us and say I got a Zestimate. Can you please produce a courtesy, right, free of charge market analysis for my property, and let me know what you believe it will sell for on the open market? And then we do that and then you have the real information. Then you can compare the Zillow Zestimate against our information. And if you are paying close attention you will notice that they skipped your basement. Right? So kind of crazy. I just think that people need to be aware of that. That we are not trying to get people off of there. They are on there. Good grief.
Jesse: Well, you are never going to get them off of there.
Jeremy: 20% of our clients came to us last year from Zillow. Right? Wasn’t it 20%?
Jeremy: 20% of our clients actually contact us through Zillow. Hey, it is what it is. But buyer beware. Right. This instant offer, the Zillow dot com slash offers thing, you are dealing with a corporation. You could just be dealing with someone right here and get all of your options. Right? And of course, their goal is it seems so easy. You do not even call an agent. You just go oh man, this seems easy. I was making unicorn pancakes for my child, and I got an offer on my phone. I should just get out of here. Right? The rest, as they say, is history. If you would like to see what we are doing with Instant Offers, visit Sold in St. George dot com slash or just Sold in St. George dot com. The Instant Offer button will hit you in the face. Have you voted for Best of Southern Utah today, Jesse?
Jesse: Not yet.
Jeremy: Andy did.
Andy: I just did.
Jesse: Because you have to wait 24 hours.
Jeremy: No, you do not have to wait 24 hours.
Jesse: Oh yeah. It will not let me do it unless it is the next 24 hours.
Jeremy: Oh no.
Andy: So he voted yesterday is what he is saying.
Jeremy: It should not be 24 hours. It should just be 12:01am. I do not know.
Jesse: Oh really?
Jesse: Because the other day it would not let me because I had just voted at like ten o’clock the night before.
Jeremy: Oh just come back once per day. That is what they tell me. I just voted. Folks, visit, if you visit the Best of Southern Utah, we are, over at the Larkin Group, our real estate team, we are aiming to win that title. Some of you saw a Facebook video I posted last week. It was me with my high school yearbook.
Jesse: I was telling my wife this morning that, because she asked me if I could do a Miami Vice pose, and I told her, you know I was voted the most likely to be the next Don Johnson.
Jeremy: Dude. I so believe it.
Jesse: That is the only title I ever got.
Jeremy: I so believe it. At every level I believe it. But if you visit Sold in St. George dot com, we made it easy. You can vote for us right through that page, and yes, cast a vote. It is Jeremy Larkin for Best Realtor and Larkin Group for Best Real Estate team. I have the very best people in Washington County working with me, and there you have it. Whose phone is buzzing?
Jesse: Yours probably.
Jeremy: I do not know. That is kind of weird. Some thing is buzzing. It is in my ears.
Andy: Not mine.
Jeremy: Man, this is weird. All right, Jesse. Should we talk about a couple other questions that these guys are, that these folks out there are asking?
Jesse: We can, but I am going to depend on you because my laptop died.
Jeremy: Did it die?
Jeremy: Oh man. So this is going to be really good. So we talked about answering the best questions, the questions here in Southern Utah that people have been asking. These questions from our 2019 Parade of Homes survey. And many of you will remember that we created a survey and asked folks questions about the market and just to find out what they were doing and then we turned around and we had about 140 people respond to our survey, maybe 150. Okay, what about, Jesse, are there good options for young couples who just graduated college? I am going to qualify that because it does not have to be just graduated college, but let’s call it young couples, just graduated college. Let’s guess that these are couples that are in their like 22-25 years old range. Okay? Are there good options? Is buying a house a good idea at this stage in life? What do you think?
Jesse: I think it is because you can step into a starter home and start building equity, start building your life, and it will help you think differently. It really does. The home ownership is almost like the next step in life. It is like having a kid. It just changes your life.
Jeremy: Is there any reason, and we will back into this, are there good options? Is there any reason that they wouldn’t buy a home at this stage in their life? What would be good reasons to not purchase a home at early 20’s, graduated from college?
Jesse: If you are not really sure you are going to be here say two years –
Jesse: — then it does not make sense at all because if you end up having to sell that you will end up possibly paying capital gains and that could hurt you.
Jeremy: Bingo. Yeah. Absolutely, so a lot of these couples, they are not permanent here.
Jesse: It just depends on what are you doing.
Jeremy: Yeah, at least two years, and Jesse says at least two years because if you stay in a home, sell a home less than 24 months after you purchase it, you are going to be paying what is called capital gains taxes.
Jesse: And there is no way around that.
Jeremy: No. There is no way around it at all. But let’s take this a step further. How long should people really be in their home? Like if we want to wait out a real estate cycle, what are you thinking?
Jesse: Five to ten years.
Jesse: Because every cycle for the last what, 70 years has been up and down every ten years. Five up, five down.
Jesse: Five up, five down.
Jeremy: Absolutely. There is no question. Right?
Jesse: But let’s kind of hit on that. So with that said, we are probably in the height of a market, and does that really mean that they wait? I do not know that it does. If it makes sense to buy a home.
Jeremy: Okay, let’s pretend that I am young couple. Okay?
Jeremy: Just graduated from college. Maybe have a baby or two, maybe do not have any.
Jeremy: I buy a home, but there is a concern that in the next two to three years that my wife, let’s say, or if somebody says their husband, one of us might get a nursing position in Salt Lake City, and we might leave.
Jeremy: But we really want to own a home right now. So what is going to happen when we go to leave? Do we have to sell it?
Jesse: No, you could actually make sure that you buy one where you could possibly rent it.
Jeremy: He is following my cues real nice.
Jesse: Okay, so in that case, and as long as you have lived in a home the last two of five years, it is not technically an investment property –
Jesse: — so you could still wait out a market and sell it say five years from now and be safe.
Jeremy: So you are saying my monthly mortgage payment is $1400 a month. I could theoretically rent that home for $1400 a month. Or fifteen.
Jesse: You would have to check on that, but possibly yes.
Jeremy: You would want to do some research.
Jesse: You can either definitely offset the rent or get all of the mortgage paid with the rent. That is a good possibility, but I would make sure that you prepare, think about that first.
Jesse: Because you do not want to have to have the money in the bank or –
Jeremy: What are options though? For these young people, what are the options? And for my team out there who are watching and listening, what are the options?
Jesse: There are plenty of options, but you really have to do your homework and you have to be quick on the draw. Because a young couple is probably going to be under $300,000.
Jeremy: And maybe under?
Jesse: Under 250, which is really a tough market still even though we are getting more inventory. My biased opinion is you have to have a good agent that has feet on the ground for you and is really looking because the homes that are the best value that are the right homes are selling so fast you do not see them.
Jeremy: They are gone.
Jeremy: They are gone. So a couple of things. So there are some options.
Jesse: There are.
Jeremy: But, Jesse, I can only afford a $2500 car. There are no options for me. There are.
Jesse: There are.
Jeremy: It is just I had better set my expectations –
Jesse: Yeah, look where the expectations are.
Jeremy: And this is the same thing. And where I am going with this, right, Andy, do you have adult children? How old is your youngest?
Andy: My youngest is 15. My oldest is 27.
Jeremy: Are they homeowners?
Andy: My oldest is, yes.
Jeremy: The reason I ask you that is you have kids that you could counsel. I do not quite have a child buying a home yet. But do you think that the expectations of young people today, because of the wealth that has been enjoyed the last 30 years are different than the young people 30 years ago?
Andy: Yeah, I think so. We did not dream of buying a home at 21 years old. There is no way.
Jeremy: And the reason I say this is by the way there has been such a beating up of millennials and Gen Y and this, that, and the other. These kids are terrible. Here is the deal. We are all just a product of our upbringing. So these kids do not even know what it was like because we did not have the internet. Well, of course, they do not know. There is no reason to assault people because they grew up when they did. Just the reality is that there is so much wealth right now. Right? And when you were 21 years old, it was like man, if people could get into a 1000 square foot, two-bedroom, no bath, young and married, especially my parents, who are older, who are 78, for them to own an 800-square-foot something was like a dream.
Jeremy: Yet what is the perception now, Jesse? I drive down there to Little Valley and what do I want?
Jesse: You want that $400,000 house.
Jeremy: I want a $400,000 home.
Jesse: And also the perception a lot of times is I will just wait for the market to come back down.
Jeremy: Yeah. Yeah.
Jesse: But what they do not think about is when that market comes back down, it most likely will be interest-rate driven. That $400,000 house that probably is not going to go down by $100,000.
Jesse: We are not going to see a crash.
Jeremy: That is not happening right now.
Jesse: But that $375,000 house is now more like a $425,000 house because the interest rate has just went up.
Jesse: So have you shot yourself in the foot by not really thinking that through?
Jesse: I think that is what we are going to see.
Jeremy: Keith asked a question. Let’s just segue there. Are home prices up right now in St. George or has higher interest rates stopped any increase in prices? Well
Jesse: They are still up.
Jeremy: Yeah, they are still up. They are still up. Are they going up? No. They are not currently going up in Washington County. Maybe in a pocket here or there. I just listed a Coral Springs condo, which is going to be kind of interesting. We will be listing it for $309,900.
Jeremy: Interestingly, there are three that just closed at 290, 295, and there are two under contract above 300.
Jesse: That is crazy because you know three years ago when we talked to him –
Jesse: — that was 250.
Jesse: Holy moly.
Jeremy: So here is a pocket and the pocket is this. They are selling homes, like they are vacation rentals. Remember we talked about nightly, weekly rentals. They can be a vacation rental. Well, they are selling Coral Springs for say $300,000, 310. Across the street, literally across the street, Cole West is building new vacation rentals for 500.
Jesse: Four to five hundred. Yeah.
Jeremy: So, what you have is a little micro-pocket there where the buyers look at them and go oh, well, gosh, I would love to buy a $500,000 vacation rental and then they would walk across the street and say I guess I will buy one that was built in 2007.
Jeremy: And 2007, it is the big rock fireplaces and the dark trim and the
Jesse: They are pretty cool.
Jeremy: — dark doors. Yeah, they are really cool. It is just a different style, and so some folks just say I will just take that style and I will paint it. Right? So folks, if you have not done so yet, we would ask please if you will vote for us. Sold in St. George dot com and cast your vote. That will pop up. Vote for the Larkin Group. Jeremy Larkin. Best in Southern Utah. Jesse, thanks for being on and handling things as we were having techno difficulties.
Jesse: Sorry for the technical difficulties.
Jeremy: We got it, man. We are off to the races. Have a great week.
Andy: Thanks, guys.