Zillow Isn't Wrong But It's Not Right Either

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Transcript

Why Sellers Quote Zillow

SPEAKER_00 0:02

I'm sure you've had a seller say, Zillow says it's worth more. Or this estimate is higher than your offer. Or I looked it up online and it says my house is worth $280,000. Listen, this is one of the easiest objections to handle if you stay calm. Because the seller's not crazy for looking at Zillow. Everybody looks at Zillow. Buyers look at Zillow, sellers look at Zillow, agents, investors look at Zillow. Your neighbor who has never bought an investment property in their life looks at Zillow and suddenly thinks they're a valuation expert. So do not get annoyed when a seller brings up Zillow. Don't get defensive. Do not attack the seller. Do not make them feel stupid. Because in their mind, Zillow gave them a number. And that number feels real. But here's the problem: a estimate is not an offer. It's not an appraisal. And it's not a buyer. It's not a check. It's not a wire. And Zillow does not have to buy the house at that number. That is the entire objection. The seller says, Zillow says it's worth more. But what they usually mean is I am anchored to a number on a screen and I do not understand why your offer is different. So your job is not to fight Zillow, your job is to reframe Zillow. Because Zillow can estimate value, but Zillow does not have to perform. A real buyer does.

Three Responses That Lose Trust

SPEAKER_00 1:38

Here are the wrong ways to handle this objection. So bad response number one Zillow is wrong. Even if Zillow is wrong, that's not the strongest response. It sounds dismissive. It makes the seller feel like you're attacking the one source that they have. And once a seller feels attacked, they usually defend their number even harder. So let's go on to bad response number two. Zillow doesn't know anything. That's not always the right move because Zillow does know some things. It knows public records, it knows square footage, it knows the bedroom and bathrooms, it knows prior sales, it knows nearby comps, and it knows the market activity. But what Zillow may not know is the actual condition of the property today. It may not know that the roof is shot, it may not know that the foundation has movement. It may not know that the electrical panel is outdated. It may not know that the kitchen has not been touched since 1987. It may not know the tenant destroyed the inside. It may not know that the house smells like cats or cigarettes and regret. So do not say Zillow knows nothing. Say Zillow does not know everything. Bad response number three. Well, sell it to Zillow then. Now listen, I know that one may feel good, and I know some of you have said it, myself included. But on a seller call, that usually comes across emotional. Your goal is not to win a sarcastic argument. Your goal is to help the seller understand the difference between a number on a screen and a real offer with real terms.

What The Objection Really Means

SPEAKER_00 3:19

So when a seller says Zillow says it's worth more, it usually means one of four things. They are anchored to an online estimate, they are comparing retail value to investor value. They do not understand how condition affects price, or they are using Zillow as leverage to see if you will raise your offer. None of that means the seller is bad. It means they need context. Most sellers think in terms of top line price. They see a estimate that says $280,000 and they think my house is worth $280,000. But they're not subtracting repairs, they're not subtracting commissions, they're not subtracting closing costs, they're not thinking about the inspection risk or the appraisal risk. They're not thinking about buyer concessions or thinking about months being on the market. They're not thinking about holding costs, they're not thinking about the difference between selling retail and selling as is for cash. And that is where you have to slow the conversation down because this estimate may be a starting point, but it's not the full equation. So let's go through the principle here. Zillow gives an estimate. The market gives a result, a buyer gives an offer. Those are three different things. An estimate is an opinion, a result is what the property actually sells for. An offer is what someone is willing to pay today under specific terms. So you cannot let the seller compare your cash offer to his estimate like they are the same thing because they are not. This estimate is based on available data. Your offer is based on the actual condition, the actual repairs, the actual timeline, the actual risk, and the actual terms. That is the difference.

The Four-Step Reframe Framework

SPEAKER_00 5:08

So when a seller says Zillow says it's worth more, use this four-step framework. Acknowledge, separate, educate, re-anchor. Step one, acknowledge it calmly. First, say this totally understand. A lot of sellers look at Zillow first. That keeps the seller from feeling judged. And then say, and honestly, Zillow can be a helpful starting point. That's important. You're not attacking Zillow. You're not saying the seller is dumb for looking. You're just putting Zillow in the correct category. It is a starting point, not the final answer. Step two, separate estimate from offer. So then say, the only thing I would separate is this. Zillow is giving you an estimate. I'm giving you an actual offer with real terms attached to it. That line's clean because it immediately separates the two things. So then say Zillow does not have to walk the house, pay for repairs, deal with title, close on a specific date, or wire money. That's the difference. A number on a screen has no responsibility. A real buyer does. That is why this estimate and the offer are not the same conversation.

Zillow Offers And The 900M Lesson

SPEAKER_00 6:30

Step three, educate with the Zillow offers failure. This is where I would lean in because Zillow did not just estimate values. Zillow tried to buy houses. They had a program called Zillow Offers. The idea was simple. They would use their data, their technology, their valuation models, and their massive brand to buy houses directly from sellers. And then they would renovate those houses, resell them, make a profit. They were flipping houses. But what happened? They stopped buying houses. They shut the program down. They lost nearly $900 million in their home buying segment in one year. Think about that. This is Zillow, not some random person in a Facebook group, not a brand new wholesaler running numbers on a napkin. Zillow, one of the largest real estate data companies in the world, they had the data. They had the algorithms, they had the engineers, the brand, the money, the traffic, and they still found out that estimating value online and actually buying houses in the real world are two very different things. That is the point sellers need to understand. Zillow can give an estimate, but when Zillow actually had to put their own money behind those estimates, buy the houses, manage the repairs, deal with timelines, deal with market shifts, deal with holding costs, and resell the properties, their model broke. And that's not an insult to Zillow, that's a lesson. Estimating is easy, buying is different, risk is different, repairs, condition, timing is different. Actually performing as a house flipper is different. So when a seller says, Zillow says it's worth more, you do not need to argue. You could say, I understand, but even Zillow learned there's a major difference between estimating values and actually buying houses. That is a powerful reframe because now Zillow's not your enemy in the conversation. Zillow becomes your proof. Step four, re-anchor to the seller's real options. After you explain the difference, bring it back to the seller. So you say, if your goal is to get the highest possible retail price, listing it may be the better route. I would never tell you otherwise. That builds trust because it's true. If the house is in good condition and they have time and they are willing to go through the retail process, they will probably make more money listing it. But then add. If your goal is to sell as is, avoid repairs and showings and commissions and avoid inspection issues and have a reliable closing date. Well, that's a different type of offer. That's the key. You're not saying your offer is better for every seller, you're saying your offer solves a different problem. Retail solves for the highest possible price. Cash solves for certainty, convenience, speed, and simplicity. So the real question is what are we solving for? That is how you regain control of the conversation. But here's the line I want you to remember. Zillow is estimating what the property might be worth. I'm offering what I can actually pay based on the condition and terms. That's the whole thing. Estimate versus offer. Possibility versus reality. Screen number versus sign contract. The seller may not like your number, and that's fine, but they need to understand why your number is different.

Scripts For Two Common Scenarios

SPEAKER_00 10:31

So let's go through a couple of scenarios. Scenario one, the seller is anchored to this estimate. The seller says, Zillow says my property is worth $280,000. You say, totally understand. A lot of sellers look at Zillow first. The only thing I would separate is that Zillow is giving you an estimate. I'm giving you an actual offer based on the current condition, the repairs, and the terms you said mattered to you. So then ask, do you think Zillow is factoring in the current condition accurately? And then be quiet. Let them answer. Because most sellers know the truth. They know the property needs work. They know the pictures online do not tell the full story. They know the house down the street that sold for top dollar may have been fully updated. So let them say it. If they say, no, probably not, you say, that is exactly why my number is different. I'm not basing this on what the house could be worth completely fixed up. I'm basing it on what I can pay as is while taking on the repairs, the risk, the timeline, and closing responsibly. That's calm, it's practical, it's not arguing, it's just educating. Scenario two, the seller wants you to match this estimate. Seller says, if Zillow says my property is worth $280,000, can you get closer to that? So you say, I understand why you would ask. If I were buying it retail, moving in and paying full market value, then we would be having a different conversation. But then pivot. But I'm buying it as is, taking on the repairs, taking on the risk, and giving you a clean closing. So my offer has to account for that. But then ask Are you trying to get full retail value or are you trying to avoid the retail process? The question matters because the seller has to pick the lane. They want full retail value, they probably need to go through the full retail process. Repairs, showings, inspection, appraisal, commissions, time, uncertainty. If they want an as-is cash sale, the price has to reflect that. That's not unfair. That is the trade-off. So here's the line I would use over and over and over again. Zillow is great at giving estimates, but even Zillow stopped buying houses when they realize how different estimating value is from actually taking on the risk. It's not emotional, it's not insulting, and it's not combative. It's just true. And it helps the seller understand the difference between data and execution. Because data does not replace due diligence. Data does not replace condition, does not replace repairs or risk. And data definitely does not replace a real buyer with real money.

Bad Role Play Vs Good Role Play

SPEAKER_00 13:31

So let's role play bad version versus good version. Starting off with the bad version, the seller says, Zillow says it's worth more. You say, Zillow's always wrong. Seller says, Well, I believe Zillow. And you say, okay, well then sell it to Zillow. Now the seller feels insulted and the conversation gets tense, the trust goes away, and you probably lose the deal. Not because your point was completely wrong, because your delivery was wrong. So let's go through the good version. The seller says, Zillow says it's worth more. You say, totally understand. Zillow can be a helpful starting point. The only thing I would separate is that Zillow is giving you an estimate. I'm giving you a real offer based on the condition, repairs, and terms. The seller says, but Zillow says $280,000. You say, right, if your goal is to get the highest possible retail price, listing may be the better route. But if your goal is to sell as is, avoid repairs and commissions and showings and have a reliable closing date, then we have to look at the property differently. But then add. And honestly, even Zillow learned this lesson the hard way. They tried to actually buy houses through Zillow offers, and they shut that program down after losing nearly $900 million in their home buying segment in one year. So there's a big difference between estimating a value online and actually buying the house, taking on the repairs, and carrying the liability. So then ask. The real question is are you trying to test the retail market? Now you're in the real conversation. Not Zillow, not ego, not arguing. You're talking about options. The biggest mistake wholesalers make is they argue with Zillow. Do not argue with Zillow. Use Zillow. Zillow gives you one of the best teaching points you could ask for. Because Zillow did not fail because they were small. They did not fail because they lacked data. They did not fail because nobody knew who they were. They had all of that. They failed because buying houses is not the same as estimating houses. That is the entire lesson.

Recap And What To Do Next

SPEAKER_00 15:54

A zestimon is a starting point. It is not an appraisal. It is not a guaranteed sell price. It is not a buyer. It's not a wire. It's not a solution. So the next time a seller says, Zillow says it's worth more, do not get defensive. Do not insult them. Do not attack this estimate. Acknowledge it. Separate estimate from offer. Use Zillow offers as the lesson. And then re-anchor the seller to the real options. And remember this Zillow can estimate value, but Zillow does not have to buy the house. A real offer has to account for condition, repairs, timeline, risk, and terms. That's the difference. All right, guys, let me know. How often do you have to overcome the Zillow or the Zestimate objection? Let me know if this episode helped. Regardless, show me some love. Like today's video. We'll see you guys tomorrow.