Redfin vs Zillow | What’s the Difference Between Redfin and Zillow? 

The Rise of Redfin and Zillow

Redfin vs Zillow is a product of the internet age. Data and technology has disrupted countless industries and the real estate industry is no exception. Think back to the 1980’s when my parents were buying their first home. They couldn’t easily see sales history, review comps, assess school quality, look at crime data, and lots more.

Instead, a major reliance was placed on real estate agents to guide buyers and sellers through the purchase/sales process. For this guidance, agents would (and still do) charge a whopping 6% commission on the sales price of a home. The times sure are a changin’. With the internet buyers can now easily see sales history, comps, school quality, and much more. It’s all available free of charge at the click of a button. You can even get a Redfin Estimate or Zillow Zestimate which will estimate the value of your home. Crazy!

Because of this abundance of this easily obtainable data, the balance of power is shifting to consumers. The transparency of this data also makes real estate agents less valuable than they used to be. Why? Because much of the service they used to provide can now be provided for free by the internet. Now I’m certainly not saying there isn’t value in a great real estate agent. There is. A fantastic agent can be worth their weight in gold especially to a first-time home-buyer or someone buying in a location they are completely unfamiliar. But the game has changed and has put pressure on the real estate industry (including the whopping 6% transaction cost) to innovate and adapt.

Enter Redfin and Zillow

That is where Redfin vs Zillow enters the picture. These little internet darlings have used data and technology to grow into multi-billion dollar companies that have disrupted the real estate industry as we know it. 

The services Redfin and Zillow prove are immense:

  • A full database of homes that are available for sale
  • Estimate of home values
  • Real estate agents that work on reduced commissions (Redfin)

Is the Redfin or Zillow Estimate More Accurate?

Why Use Redfin or Zillow Estimates?

One important factor many buyers and sellers seek out is an understanding of the market value of a property. Redfin and Zillow have algorithms that take into account hundreds of data points and then spit out a home value estimate. Redfin calls this the Redfin Estimate and Zillow calls this the Zestimate. When a traditional agent comes up with an estimate they primarily look at comparable sales as a basis for the estimate. This just means they look at similar types of sold properties in similar locations in recent weeks or months. Neither approach is 100% accurate. The benefit of Redfin and Zillow is that it’s free and generally proven to be fairly accurate in most cases.

Estimate Accuracy Winner? Redfin or Zillow?

Zillow

Based on our non-scientific experience it seems like Zillow has the slight edge in accuracy. The Washington Post did a pretty good deep dive here and, while they didn’t declare a clear winner, signs pointed to Zillow being, and becoming, more accurate. That said, the devil is in the details. While most home estimates are quite accurate (within a few percent) not all homes are that accurate. Your home may be one of those less-than-accurate homes.

Potential accuracy issues is why using caution is wise. You wouldn’t want to make an offer on a house simply by what you see on the Zestimate. Nor would you necessarily want to list your home for the Zestimate or Redfin Estimate. These estimates will continue to get more and more accurate over time as the algorithms re refined and fed more data. But to place a blind faith in them is not wise. If you are trying to hone in on an accurate estimate it is smart to talk to an actual agent.

Redfin vs Zillow: Highlighting the differences

  • Agents: Redfin employs their own real estate agents. Zillow does not. Zillow instead allows traditional agents to advertise on Zillow.com and essentially use Zillow as a lead generation tool to find new buyers or sellers.
  • Commission: Redfin offers a reduced commission structure as compared to traditional agents. Typically the buyers’ agent receives a 3% commission. Redfin refunds a portion of this commission back to you, the buyer (this does not apply in all states or cases). A sellers’ agent typically receives a 3% commission as well. Redfin charges about 1.5% on the sell side which can result in thousands of dollars of savings.
  • Estimate Accuracy: These appear to be close but it appears Zillow has the slight edge.

Common Questions About Redfin and Zillow

Q: Is Redfin or Zillow more accurate in estimating home values?
A: Zillow by a smudge but it is close and your mileage may vary. 

Q: How does Redfin and Zillow make money?
A: Redfin primary makes money when buyers and sellers use Redfin agents to buy/sell properties. The sales commissions are Redfin’s primary revenue source.

Zillow primarily makes money through advertising. Real estate agents, property management companies, and mortgage lenders all pay Zillow to advertise on Zillow.com. Zillow also earns money through a program called Zillow Offers. This a home buying program where Zillow buys a home directly from a seller. Why would Zillow do this? To make money! Why would a buyer sell their house to Zillow? They may be in a situation where they are time-crunched and willing to accept a lower price for certainty and convenience. 

Q: Will Redfin or Zillow buy my house?
A: Redfin will not. Zillow may through the Zillow Offers program (use caution before going down this path as you very likely will not receive true market value for your home). 

Q: Should I use Redfin or Zillow instead of a traditional agent?
A: We have both bought and sold with Redfin agents and found the experience to be wonderful. There is no real difference between the work performed by a Redfin agent as compared to a traditional agent. The main difference is you will save money with Redfin. Each agent is unique so no matter if you use Redfin or a tradition agent you may find agents you click better with; it’s wise to talk to multiple agents when starting your process. 

Want to learn more? Check out our article on Zillow vs Trulia here.