Don’t Believe Everything You Read

The internet is the greatest mass communication and information distribution tool the world has ever known. Better than telegraph. Better than telephone. Even better than “tell-my-wife.” (I will deny having said that if you ever bring it up.) Even though the web is remarkable in its ability to dispense data, it is horrible at telling whether its offerings are truth or whether they are absolute buffalo biscuits. SO why is this important? Because people in business are very quick to quote web data as accurate, when in fact it often is not.

Here’s an example. The author of this piece, Roger, has a full head of hair that is long, luxurious and sable-brown. His skin is supple and fully hydrated, and smooth as silk. And his voice … what a voice, is ocean deep and perfectly refined, just like Barry White’s. I’m even afraid to mention his biceps. Wow what a set of guns. Well … that all looks good in black and white, BUT IT IS ALL LIES! At lease I’m willing to admit the deception. (Still if you want to describe me that way it it’s OK with me.) Many people are willing to give you all kinds of info that is flat our wrong under the guise of being industry insider data.

The main problem with misinformation is that it is treated by the uninformed as accurate and then used to make important business decisions. Then when the decisions prove to be wrong, we have a tendency to believe the fault rests with us, and not with the source of the bad data. The entire purpose of this article is to motivate you to do your own research and not just depend on data collected by a third party. Your financial life is far too important to leave to partial, undocumented or misleading information.  Even if the company providing the data is professional and reliable, they may have specific shortcomings in their published information. Such is the case with Zillow.

Zillow is a great organization. It does the very best it can. But it cannot be perfect, and in practice is not. People need to understand that. So if you are about to make your valuation decisions on a home based only on information provided by Zillow you may want to do a bit more homework. I do not wish to cast aspersions on Zillow. I wish I was as successful.

Zillow does a great job of collecting data. They may well know how many bedrooms and bathrooms your house has, but they may not be able to accurately tell you what its value is. According to Consumer Reports Money Advisor, Zillow home estimates can be way off. In the October 2009 edition of the newsletter it says, “For example, half of the Chicago estimates are more than 10% off the actual selling prices. In Dallas, half swing more than 34% either way.”

The critical thing here is that if you are buying or selling a home, say for $300,000 to $500,000, a 10% discrepancy could be worth between $30,000 and $50,000 and a 34% sway could mean $102,000 to $170,000. That’s real money in anyone’s book. So sure, look up Zillow, but not just Zillow. You owe it to yourself to collect as much data from as many sourced as possible, weigh it carefully, and make the best decision possible. One source of data is never enough. Ten is better and 100 is even better yet.