Transaction & carrying costs could be mucking that up.
They have to sell for materially more than the sum of:
And maybe they’re even paying more commission than that, but they’re probably paying at least that one commission.
Yeah, you need some work done on the listing side. Maybe not a traditional realTOR (I hate those commercials) that gets ~2%, but there are costs on the sell side. Based on the flat-rate brokers I’ve seen, it’s likely a couple thousand bucks to manage all the paperwork.
I was assuming that they were just listing on their own site.
There are MLS fees, but if they’re listing on MLS, I assume it’s with their own people. So maybe add MLS fees to that. I honestly have no idea if they list on MLS or not.
They’re certainly not paying a seller’s agent commission on the sell… they are the seller’s agent.
Is there a selection bias here? Zillow has the Zestimate, determined by location and square footage and whatever else is in the database. But, take my last house as an example. It was pretty well maintained, the prior owners added some granite and finished the garage. We completely renovated a bathroom.
Our neighbor was a single mom with a couple of unruly kids and one unruly dog. There were large scratches on the doors and a couple of doors had holes in them. The paint was an absolute disaster of stains.
But we were neighbors, with nearly identical suburban houses, so our Zestimates were nearly identical. I wonder if there’s a bias that I might sell the traditional way because I could get more than the Zestimate, and she might sell to Zillow. I don’t know how much due diligence Zillow does, this is just speculation.
Yeah, but someone has to take care of all the paperwork on the sell side. That’s what I meant by a couple thousand bucks, just the labor to deal with inspection objections, title work, checking up to make sure the buyer’s loan cleared, and whatever else.
The title company does that, and I was lumping that in with 4 (or 2 on the buy side).
ASOP 56!!!
=whipcrack=
[and yes, I’m working on an article involving Zillow, ASOP 56, and related issues, but if somebody else would rather write it for the Emerging Issues community at the SOA, please message me]
I wonder if Zillow ever sent anyone into my neighbors house. The house had been kept up, had been remodeled and upgraded kitchen and bathrooms. It didn’t need any work. The neighbors even replaced all the siding in 2020. The best I can determine is that the $/sq ft looked low because it was including a finished basement in the denominator. Just about every house in my neighborhood has a basement, but they aren’t all finished and the Zillow estimates don’t consistently include/exclude the basement in the total sq ft. I’m sure my neighbors were thrilled to pocket the extra $100,000 that Zillow was paying.
I think it’s an ASOP23 - Data Quality issue
We’ve gotta get some zillow questions into one of those Professionalism CE trivia games
The big problem with predictive models is that they are based upon probabilities. That means there will be an inherent distribution in the underlying data and some level of variance. For home purchases I’d imagine the variance is quite high. While the Zillow model might be good at predicting home values over a large sample size, I imagine it is bad at the individual level. In addition, there has to be some level of anti-selection going on when Zillow wins a bid. I mean, people who are looking at, inspecting, and physically at a property must have more information than the Zillow model. For example, walk into any house and you can tell immediately if a smoker lives there.
Thanks y’all for pulling out those ASOPs. Still need an hour of continuing ed this year, and you saved me a few seconds. 
I believe that looking for ASOPs can be counted as CE, so meep just cost you several minutes of CE.
I could be wrong.
But would it count as professionalism? CE on its own is no problem since there is lots of free stuff out there.
yes, reading ASOPs counts as professionalism.
what about reading meep talk about ASOPs
That’s gotta be a factor of 1.5 on whatever time spent
Tell you what.
Here is me talking about ASOP 56 for about 30 minutes:
It doesn’t count for “organized” or whatever CE, but if you learn something, it’s professionalism CE. There you go.
One thing I just learned this year is that you can use non-actuarial events for CE as long as they apply to your work. That’s good for stuff like an AM Best state of the pet insurance market if you work in that LOB.
Heck yeah. I’ve used SAS or SQL training for CE (although I did decide that probably counted as Business Skills). Also a class on giving presentations and management training stuff. And all that diversity & harassment training we have to do at work. I’ll count any/all of that as Business Skills, which means I basically always top out my 150 minutes of Business Skills CE each year.
Product specific training I count, even if it’s not actuary specific. Like if I go to a presentation by a sales rep on a new product or something. I count that.