Buying a home takes time because it involves balancing your budget with a long list of things you want and need. People care about having a strong foundation and the right number of bedrooms. But they also care about how the house looks from the outside, the neighbors, and how close it is to work or good schools.
For most people looking for a house in the U.S., the first important step is to set filters and look through the listings on Zillow.
“Digital real estate platforms like Zillow help people see what’s available, which saves them time by preventing wasted trips to properties that don’t fit their criteria. Even when working with a real estate agent, these platforms often play an important role in the home-buying process,” says Cheng Nie, co-author of a recent study on the topic by Iowa State University.
Keys to success
The study shows how certain things on Zillow can affect people’s decisions when they’re buying a house. The researchers found that listings with more special features can make the price of a house go up. These features include things like “fancy bathroom fixtures,” “bright kitchen,” or “beautiful view of a lake.” These words and pictures show the good and nice parts of a house.
The study also found that these special features matter more when the house is much more expensive or much cheaper than the other houses around it. The researchers also say that when lots of people save a Zillow post (by clicking the heart button), it can make more people want to buy the house and even make the price higher.
“Before the existence of Zillow and online platforms, people would go to a house, and if they saw a long queue, they would perceive the property as very popular and might offer more. In the digital world, the shortlist info—the number of people who have hit the heart icon—serves this purpose,” the authors explain.
Digital real estate
They divided the United States into four parts and picked different-sized cities from each part. Then, they chose five houses from each city that were being sold on Zillow in June 2016. Some cities had more than one area with houses for sale.
They collected information about the houses, like how big the land was and how close the houses were to schools. They also got data from Zillow, like how much they thought the houses would sell for, how many pictures there were, and what they said about the houses.
In September 2016, they checked again to see which houses were sold and how much they were sold for. The researchers also looked at the houses’ tax history and how good the real estate agents selling them were. They also checked how the nearby schools were rated.
They did another study with data from the Chicago area during the winter of 2019-2020, and it supported what they found before.
The researchers said that websites like Zillow can help people who want to buy houses by giving them good information about how much a house might be worth. But sometimes, the information might not be exactly right.
Estimated price
“Zillow estimates a sale price for nearly every listing. However, that number is based on the sales of nearby properties. If there are not enough nearby sales, then Zillow does not have enough information to make an accurate prediction about the house,” they explain.
When people are trying to buy a house, they might focus on the price they see on Zillow, even if the real value is different. Nie suggests looking at other websites and asking a real estate agent to know the real worth of a house.
If you’re selling a house, the researchers suggest talking more about the good things the house offers in the listing. Nie and his team also say that real estate agents can use websites like Zillow to give better help, even though the role of agents has changed because of these sites.
“Instead of merely listing a home as ‘a four-bedroom, three-bathroom property,’ a seller could use experiential features by writing something like, ‘This four-bedroom haven is perfect for families, with a sun-soaked living room ideal for Saturday morning cartoons and a master bathroom that feels like your personal spa,'” the authors conclude.
