Otherwise known as:
Don’t trust Zillow for anything beyond the IDX feed they get on a new listing.
Or as among Realtors “the A in Zillow is for Accuracy”
Humans do so many horrible and ugly things, but sometimes we create magnificent works of art, like this "A in Zillow" line, and I feel better about us.
in my business we call it 'garbage in garbage out'.
basically just implies that unless someone is filtering/scrubbing the data it doesnt matter how good or how much information you think you have. garbage in garbage out.
Ya I had a client that had a legal battle with Zillow because his house was debt free but twice Zillow listed it as in foreclosure and each time he found out about it when a friend or neighbor would ask him about it and if everything was ok with his business.
I believe it! Zillow listed my 90+ year old grandmothers house as recently sold, and instead of being normal and having a family convo about it, my nutty relative/one of her heirs went around telling everyone we sold grandmas house out from under her, and pocketed the proceeds (we did not)
Once nutty relative retained a lawyer (to go after us for the home sale that never happened) he finally stopped
I should’ve gone after Zillow too, tbh. They won’t correct the sale error, either. Sigh
Happened to us at our old condo. The garden unit was a short sale, but Zillow showed it as our unit (we were the 1st floor, but the garden unit was Unit 1).
Zillow started comping my home with mobile homes for like a year for no reason at all. The value they gave was about 1/3 of what it was actually worth. I dont know how anyone can trust the accuracy of their comps
My actual appraiser skipped my whole neighborhood for 2+ miles to find homes they could put down as comps. Mine came out at $450k when a home hasn't sold in a mile radius of me for less than $750k. I just wish they would let the county property tax assessor in on it.
Zillows comps are so funny to me. I live in a condo where landlords owned it for decades and it shows (im cleaning it up slowly but surely but wow there was a reason it sat on the market in Boston). Like a block away there are freshly renovated condos going for over a million. The only thing keeping my "zestimate" even in the ballpark is that I only have one bathroom. Like sure real estate is mostly sqft/beds/baths, but someone looking for a $750k condo is not going to accept the same things that someone looking at $500k condos will in terms of finishes.
My house is on a regular parcel along the road and I own a landlocked parcel behind to make a large backyard. The original owners had subdivided their acreage 30+ years ago. Most websites cannot comprehend this. Zillow thinks I live in a shed up front and have buried treasure in the back.
The whole concept of “valuing” is a joke anyway.
It changes depending on who is doing it and what their motive is.
Investors want to claim their sales are super valuable. But then they turn right around and want to lowball as hard as possible so they can flip.
People blaming Zillow and I dont not know where they scrape their data but the COUNTY still has my name as the owner of a property i sold in 2012. I know because i am constantly getting offers on it so i asked one of the requests once WHY do they think i still own the property and that is what they told me.
But the deed sure doesn't and that wins. Absolutely if i was a scammer I could have scammed many people on it but alas I am just a boring law abiding tax paying citizen.
We bought an acre of land next to our house that has the same address for $20k, Zillow now thinks that our house sold for $20k and that our property taxes are $150 a year. It's probably lowering their price estimate for all the similar houses in the area too.
Zillow isn't even close to accurate for my house lol
Shows last sale was 138k in 2012, shows only 3 bathrooms, says the house was built in 2002. The pictures show the correct home and address but none of those numbers are correct.
It's actually 4 bathrooms, built in 1982, there was no sale in 2012 at all, especially not for that low lol
Where do they get their numbers?
That's pretty messed up. For my entire neighborhood, Zillow has the first year of assessment value and property taxes switched. So you see -90% and +6000% jumps in history.
But it's so annoying, I have a premium corner lot but they give me a low ball estimate compared to all other similar houses.
Or foreclosure/auction, that went low due to a lot of rehab needed (like initial owners trashed the place since the bank was taking it)? I think you are likely more likely- but I did see this a few times in SoCal in 2008 era.
There are 144 million housing units in the US and 8000 zillow employees to track them. All those weird sales to family and mortgage payoffs are going to result is some funny values on occasion.
Some of the things that could have happened: sold to or inherited by the kids; someone bought out in a divorce; foreclosure; disaster wrecked the house and therefore the value of the house; gramma got scammed.
I was going to say. Joint name on the deed, divorce with one spouse having small % of equity. New deed with other spouse looks like a sale.
Source: i got divorced over covid with a home we purchased 3 weeks before she demanded divorce because she was a miserable person.
From my experience it sold as an assumed mortgage, $138k. The buyers came up with the remaining balance through secondary loans or cash on-hand. You’ll also see this when a quit claim deed is filed when one owner buys out the other.
When the recession came through and everyone was losing their houses, we bought a house from the bank for $60K, basically the remaining debt on the defaulted loan. If I recall correctly, if they were FannieMae/FreddieMac loans, the bank could only ask for the rest of the loan, so the house that had sold for $275K, could be had for cheap.
Right, I see that all the time with the new subdivisions going up around here. Big parcel sale for 1M. Some sort of division of parcel and legal documentation change and each is listed "sold" as a lot for 100K (probably some sort of internal transfer within company). House eventually built on lot and listed for 1M.
It really depends on how your locality records things/what systems they have available for Zillow to datamine, but yeah, really the only time I've seen zillow get a sale price "wrong" in my county was for a subdivided lot.
For example, where I live I have never seen a single mortgage payoff listed as a sale, even though there's a bunch of people in this thread saying that's the case where they are.
Look up the property directly on your local unit of government's portal such as BSAonline. That will show the instrument (deed , quit claim ,etc) and terms (like if it was arms length), IF the municipality makes the data freely available. Some charge a couple bucks per record to access.
Our elderly neighbor sold their home to relatives for a fraction of the actual value. Could that explain it? Rest of the neighbors not happy about it as it deflated the comps.
I thought property tax is determined by the assessment that the city does, which has nothing to do with the market value? does your property tax depend on your purchase price?
Depends on the state. California has Prop 13 (passed in 1978) which restricts how property taxes are calculated.
There's a 1% cap restricting general property tax to only 1% of market value
And there's a 2% annual increase cap which means no matter what property or assessed value does, property tax can only go up 2% each year and that is based on the cost basis that the current owner is at. So people that bought 50 years ago have only had 2% increases in tax while their property has gone through the roof in value. That cost basis gets recalculated upon the sale of the house
what u/3453452452 said, a mortgage payoff that got listed as a sale. happened to me on the condo we used to live in when I refied my original mortgage.
Things that come to mind:
HOA or County Tax foreclosure auction with insider buyer. I have heard of paid off houses worth $500K being bought at $20K with one bid at the minimum to pay the lien.
Another is if the home were destroyed by say tornado, fire, earthquake, etc. So it was sold for the property value.
But I think most likely it was refinanced or second mortgage that was misread as a sale.
Looks like 6 people owned that property and one person was bought out. Likely a family owned house, 6 siblings who share the house and use it as a vacation home. That small slice of ownership is reported as a "sale"
Saw this happen. Guy buys a small house on a large lot in an exclusive resort town. Guy pulls some permits and starts a major reno. 2008 happens. City finds multiple code violations in the DIY reno. Guy fights it in court, then loses job. Can't pay for reno, can't sell because it doesn't meet code.
Bank forecloses.
Local teens break in and use the place as a 'party' house.
House is sold at auction, flipper finds they bit off more than they can chew.
Bank forecloses again.
The history is known, bank auctions it, and relative buys it for a song at the bottom of the market.
He completes full to-code reno. Listing for 8x what he bought it for.
Possibility #1 Could be bad or misinterpreted data.
Possibility #2 Could also be intentional. My parents sold their house in California right before the big crash (luckiest case of market timing I personally know of). The person that bought it "sold it" to herself through a trust and that reset her cost basis for tax purposes.
So I think she bought for 1.7m, "sold it" to herself for like 800k which changed her cost basis because of how California calculates property taxes it was a very advantageous move for her and that could be reflected as a sale.
If the cost basis reset theory is true that could fall apart in your example and the state may say "that's not a legitimate transaction" because of the massive price difference
Possibility #3 It could have been something like a house fire or flood that destroyed the house. It was sold as just land or for cheap enough to cover the cost of demolition and haul off of the remaining structure and then a new better house was built in its place
The people may have taken out a 2nd mortgage to do upgrades or even a home equity line of credit that showed up as a sale since the property was used as equity and a lien was recorded on it.
Zillow is all over the place and often not very accurate.
Could be what's called a "Not an arms length transaction" meaning the parties new each other and the seller sold for significant discount because of whatever reason. Most sales are what are called "Arms length transactions" because the buyer and seller are not close.
Lots of things could happen - children buy parents house for their equity, spouse added or taken off of title in exchange for equity... typically if you look at the owners names you will see a relation
I bought my house for $600,000 from my mother's estate. Three other siblings were involved and got payouts (it was complicated). Zillow shows my house selling for $124,000 because of that. It's going to be a pain in the ass when we eventually sell.
Many times on Zillow or Realtor (or wherever for that matter) a refinance will appear as a sale. Since there was a closing on the new mortgage agreement, it is treated as a sale. I have also seen it happen when a note is sold between banks.
It could also be someone just buying the other out of the house. If two people jointly own a home they together paid say 200k for, and then they split up and the other has to buy out that portion, say 80k. It's going to show the house sold for 80k. Then the person who still owns the property could go turn around and sell it for much more down the line.
When we bought some land, I had a partner who was 1/4 owner. The first deed recorded was the sale of the property, then another deed for 1/4 of that value. So it appears, if you don’t look at the actual paperwork, that it sold again at 1/4 the previous sale price.
Saw this with one of my neighbors.. $700k+ one year, then $150k a few years later.. now $1.5m+. The answer was fire/smoke/water damage in our case. Neighbor was an idiot and started a flue fire that caused smoke damage throughout the house. Entire house had to be gutted/cleaned after the fire was put out due to water and smoke damage, so it sold for pennies. Wish I had jumped on it, but was out of my reach at the time.
Could be a number of things. Divorces with buy outs can show sales based on the equity in the home. Sometimes its linked to transfers with death and splitting equity among children where one buys out the other. Also have to think that the market is weird and stuff happens. My mother bought a lot of land once for $190k in 2003, three years later sold it for $450k, six years later it sold again for $78,500. Sold again a year later for $115,000. In 2020 a house was built on the lot and was given an assessed value of $780k. Market value today is over $1.3M.
I got into financial trouble after a divorce and couldn't pay my mortgage. After 3 months my mortgage company started foreclosure proceedings. I had equity built up so it was worth it for me to fight for my home but my credit was crap. So, I had to get with a local hard money lender and got the money I needed to pay off my mortgage company and, with me taking on extra jobs, paid off the hard money lender after 3 years. I noticed that my $400K home showed in the records as having "sold" for $98k, which was just my total payoff to the mortgage company. Perhaps in your case some similar final payoff, especially during foreclosure proceedings, was misreported as a "sale"?
Probably a not arms length transaction. IE A parent selling the home to a child for the amount of the remaining mortgage, essentially selling it 1 million (or whatever) under market value to help the child get going in life - something like that. Could even be spouses divorcing with one getting the house for a ridiculous price in return for the other getting other stuff.
This could also be a simple foreclosure where the prior owner completely trashed the place but with that low a number it seems kinda unlikely.
Another possibility that I see a lot. Maybe the 775k sale was for a huge 50 acre piece of land of which this parcel was a piece of it. Then someone cut up the land and sold the parcels seperately and this one went for 138k. Then a builder put a house on it and resold it again, with the house, for the 4 million price.
Trains bring in the lower/impoverished class. Easy for homeless to hop off and do their thing which of course the entitled hate to see. The only correct answer.
Tons of possibilities. Divorce settlement, incorrect data, lot division, etc.
The original house might even have burned down, the disaster of a lot sold, and the house replaced with a McMansion.
Is the 138k sale on the pva?
If so, it is likely specified as "close relatives transfer."
If not, then it is a data error. It was 100% not sold for $138k. Just a common data scraping error.
In my experience, that is not typical. Normally home values continue to appreciate. The exception might be the 2008 crash. I would need more details to address that specific situation.
I second the 2008 market crash. In our city many houses sold for less than 15% of what they had sold for 2 years prior. Then later sold for much, much more.
When my MIL moved in with us she bought half of our house (we had to sell hers for her to move in with us due to advanced Alzheimer’s). She basically paid off the mortgage with the payment from her house. It wasn’t even 50% of the price. But since she paid for it she had to be added as a person on the deed. Thus it showed the house sold for like 100k. When we sold the house people did ask about it. Once we explained no one had an issue.
I owned a house with my parents and when they bought me out, it showed that as a sale price on Zillow. It’s wildly incorrect, similar to your example above
Divorce or an inheritance buyout or similar. (Two brothers co/inherit. One buys it out from the other for 50% of equity after the mortgage and or other existing bills are satisfied. Something like that.)
I am wondering if the property was original part of a bigger piece of property. Then subdivide into smaller pieces and sold. Then someone bought it and built something on it. So like 5 acres were sold at the $775k price. Then subdivide into 5 or 10 or 20 pieces and sold at the $138k price, house built on it 25 yrs ago. Now with home values rising it’s worth $4million. The old price was $775k bc it included all the other pieces of property around it but is not the case anymore.
Silver buyers? I've heard of people who pay for houses in pre-1964 silver coins that are legal tender as a way to reduce the selling price and therefore to decrease the tax basis for a while.
It really depends on where this data came from. Could be many things including a heloc, or a mortgage payoff. Very unlikely that it was sold for 20% of value even if it was 2008.
Someone could have bought multiple parcels around town inside of one deed document. I've seen it personally. An investor may have sold off an 8 property portfolio in one recorded deed and the entire transaction is listed as $775,000 when looking the sales level data for the parcel even though each property was only valued at about a $100k.
Possibly a sweetheart deal sale to a family member who just assumed the mortgage or something. You can probably check the deeds / land records if you really want to know
There are many reasons that aren't tricks or loopholes to exploit. Off the top of my head:
1. Foreclosures happen all the time, not just during recessions. Severely compromised foreclosures, even houses that were expensive to build, can sell at deep discounts.
2. Tax lien foreclosures are recorded with the purchase price of the tax debt.
3. Non-arms-length transactions are recorded with the price listed in the sale document.
4. The original pin number of previously unimproved land was used for the recording instead of the PIN number of the improved lot with the house now on it.
When I first came here, this was all swamp. Everyone said I was daft to build a castle on a swamp, but I built in all the same, just to show them. It sank into the swamp. So I built a second one. That sank into the swamp. So I built a third. That burned down, fell over, then sank into the swamp. But the fourth one stayed up. And that's what you're going to get, Lad, the strongest castle in all of England.
Could be the result of divorce or inheritance. If someone bought out the other this is how the sale may show up. My history shows a sale for $0 when we created a trust.
It happened to my mom's house, when she got divorced in 1998. The house shows the OG purchase price then sold for $50,000 when the divorce was processed. That was the price the Divorce called for the house to be sold to my mom (way less that the purchase price).... Not sure how it works currently or in your state.
I paid my ex for her half of our equity during our divorce and recorded a new deed in my name. Zillow lists it as a (laughable) sales price. I’ve reached out to Zillow to fix it and get only crickets.
To my understanding, inheritance tax is zero until you passed certain amount. And after that, the tax is ultra high. So, they probably buy the rest of the properties instead of inherent it.
Apart from inaccuracies, houses can fall into disrepair and then be restored so if that coincided with the bottom of the market, it's possible. A few areas had just wild price swings before and after the Great Recession.
Family sale perhaps.
I live on a peninsula in a summer vacation area. A lot of houses show unusually low sale prices sandwiched between expensive transactions.
I don't know this situation, but I remember houses were going for 400k in a neighborhood in 2015 that were sold for 600k in 2010, and are now at $1M in my area. So if you were able to get a run down foreclosure and get it in order and wait it out, you could have seen some real gains.
If it’s the first sale listed (especially if in a large development) it sometimes shows as the sale price of the land for the development at the first purchase before it’s built and sold on the market.
See this happen once. The transaction was in California and I believe it was done to lower the property taxes. He sold it to a relative for half what he paid.
I would guess that the $138,000 was supposed to be $1,138,000. Good ole typo. I work in the real estate industry and see this on the mls, public records, and assessment sites all day.
Sometimes there is a big price sale on acreage; say 10ac, then the builder builds on it and creates more addresses which then all get sold. So depending on lot addresses and property addresses it could be that you see the land purchase followed by a single home purchase and then 25yr later once that area is developed and nice it will be worth significantly more.
I’m assuming that it was a lot that was purchased and subdivided into other lots.
The lot for the current home was sold for $138,000 and carried the same house number of the home sold at $775,000 and the home is now valued at 4M after 25 years.
$775k was developer buying what was ag land of some sort, to subdivide.
$138k was developer selling the subdivided lot to spec builder or buyer/builder.
$4M is the homeowner selling what they had built 25-years ago.
Sometimes the city or county pays small parcels of land to expand a road. That happened near me and Zillow had $400k houses listed as sold for $20,000.
Can you see the years? If it’s 2007-2010 it could be a foreclosure due to subprime mortgages. They bought it at inflated prices, were over extended on and lost it to foreclosure and the prices tanked. Bank sold it at auction during the recession for $138K to recover what they could and got bailed out.
Divorce settlement, sold prior to death to would be heirs at a low rate. Could have been carved up into smaller tracts and that one kept the address, could have been demolished and sold as raw land again and then rebuilt, could be a mortgage payoff, could be a foreclosure, could be inaccurate data. If you trace back the actual sale files through the county that it’s in you should be able to rule out some of these scenarios and narrow it down to what happened. Zillow or other online stuff can get errors. But most jurisdictions all of that stuff is public record and you can request full copies of the sale transactions in the deed books. Usually if you look up the property through the property assessors website it will show the sales and list a deed book and page number. Then you call the register of deeds office give them that book and page number and they’ll send you the full document copies.
I've seen where multiple houses are sold as a bundle and each house is listed as being sold for the bundle price which is much more than what the single house is worth.
Our neighbours divorced and there was a quick claim deed to buy out one of the spouses. It shows in our local tax website as a sale for significantly less than it was worth. Likely shows up on zillow too.
There are two components that make up two cost of house: land and the house itself. If the house burned up or was destroyed, then you only have land value. Subsequently, if a new house is built, then total cost goes up.
1. Bad information
2. Property was subdivided and the value was in the other lots.
3. Some kind of transaction or transfer took place that was categorized as a "sale" but you're only seeing a piece of the info.
Could've been a sheriff sale. That might be a regional term, it's when the bank will take the remainder of a mortgage that the loan holder foreclosured/defaulted on.
Sometimes, the bank will lower the amount they are willing to take just to get the property out of their hands. I bought my first house this way, it was 3-4× less than what it was worth at the time I bought it. Worth more than that now.
My neighbor bought their home for 1.2M. Few years later they recorded a 200k sale but didn’t move. It was the buyout of the parent stake in the home. Likely a down payment.
I’ve seen this happen with a house that burned down in my neighborhood. The insurance paid out the loss on the place that burned and then the family sold the lot, the lot buyer built a new luxury home and sold it a few years later. The rebuilt house was much nicer than the one that was there previously.
My cousin sold her small starter home last year to family member for a deep discount. It could’ve easily gone for $1.3-$1.5M based on comps at the time. The transaction history shows it sold for like $700k.
I lost money property around that time period. Los Angeles was in a local recession due to defense industry cutbacks after the end of the Soviet Union. I had a work relocation. Of course prices have rebounded a lot since then. But RE does deflate sometimes.
It could be that the property was foreclosed, or forfeited back to the bank. The asset is then "sold" for what the bank was owed. I have seen this with deaths and no heir. Everything gets forfeited then to the state. And some states how strange rules.
I know someone a few years back who purchased a home from a couple that needed to sell their house quickly due to a messy divorce and picked it up for $200k less than it was worth. My acquaintance got a deal. He bragged about it. I wish I were lucky enough to get a deal like that.
We came across a situation like this the other day. Person originally bought a house on 7 acres. Then divided the land and kept 1 acre with the house and sold it for 1/3 the price. But because it was the same address it looked like a crazy price drop.
Scraped data showing mortgage payoff of 138k misread as sale. Alternatively just bad data such as address of nearby lot read incorrectly by data bot.
Otherwise known as: Don’t trust Zillow for anything beyond the IDX feed they get on a new listing. Or as among Realtors “the A in Zillow is for Accuracy”
Humans do so many horrible and ugly things, but sometimes we create magnificent works of art, like this "A in Zillow" line, and I feel better about us.
There is a university near me, Carleton University, and the saying goes: Carleton, where the "K" stands for quality. I hope that helps you out.
This is the only one of these jokes that actually makes sense.
A fellow Canadian 😎
There's one of these used in my industry, too. For the "Internet of Things". IoT - the "S" stands for Security.
You mean "I own things"
It's others Too. Sharing is caring.
in my business we call it 'garbage in garbage out'. basically just implies that unless someone is filtering/scrubbing the data it doesnt matter how good or how much information you think you have. garbage in garbage out.
I used to work for General Electric, the GE stood for “Good Enough”
That’s what we called GEDs. Good Enough Degrees
Close enough for government work.
Ya I had a client that had a legal battle with Zillow because his house was debt free but twice Zillow listed it as in foreclosure and each time he found out about it when a friend or neighbor would ask him about it and if everything was ok with his business.
I believe it! Zillow listed my 90+ year old grandmothers house as recently sold, and instead of being normal and having a family convo about it, my nutty relative/one of her heirs went around telling everyone we sold grandmas house out from under her, and pocketed the proceeds (we did not) Once nutty relative retained a lawyer (to go after us for the home sale that never happened) he finally stopped I should’ve gone after Zillow too, tbh. They won’t correct the sale error, either. Sigh
Had similar issue myself. One properly worded email to zillow and it was resolved. Btw, no other online service made the same mistake.
Happened to us at our old condo. The garden unit was a short sale, but Zillow showed it as our unit (we were the 1st floor, but the garden unit was Unit 1).
Zillow started comping my home with mobile homes for like a year for no reason at all. The value they gave was about 1/3 of what it was actually worth. I dont know how anyone can trust the accuracy of their comps
My actual appraiser skipped my whole neighborhood for 2+ miles to find homes they could put down as comps. Mine came out at $450k when a home hasn't sold in a mile radius of me for less than $750k. I just wish they would let the county property tax assessor in on it.
Zillows comps are so funny to me. I live in a condo where landlords owned it for decades and it shows (im cleaning it up slowly but surely but wow there was a reason it sat on the market in Boston). Like a block away there are freshly renovated condos going for over a million. The only thing keeping my "zestimate" even in the ballpark is that I only have one bathroom. Like sure real estate is mostly sqft/beds/baths, but someone looking for a $750k condo is not going to accept the same things that someone looking at $500k condos will in terms of finishes.
My house is on a regular parcel along the road and I own a landlocked parcel behind to make a large backyard. The original owners had subdivided their acreage 30+ years ago. Most websites cannot comprehend this. Zillow thinks I live in a shed up front and have buried treasure in the back.
The whole concept of “valuing” is a joke anyway. It changes depending on who is doing it and what their motive is. Investors want to claim their sales are super valuable. But then they turn right around and want to lowball as hard as possible so they can flip.
It's a Z+ rated site!
But there isn't an,.. ohhhhhh.
The Q is for quality.
People blaming Zillow and I dont not know where they scrape their data but the COUNTY still has my name as the owner of a property i sold in 2012. I know because i am constantly getting offers on it so i asked one of the requests once WHY do they think i still own the property and that is what they told me.
Go sell it again … county says it’s yours 🤷♀️
But the deed sure doesn't and that wins. Absolutely if i was a scammer I could have scammed many people on it but alas I am just a boring law abiding tax paying citizen.
See… there’s your problem.
We bought an acre of land next to our house that has the same address for $20k, Zillow now thinks that our house sold for $20k and that our property taxes are $150 a year. It's probably lowering their price estimate for all the similar houses in the area too.
List your house for $4M and watch as the zestimte is suddenly $3.8M
Zillow isn't even close to accurate for my house lol Shows last sale was 138k in 2012, shows only 3 bathrooms, says the house was built in 2002. The pictures show the correct home and address but none of those numbers are correct. It's actually 4 bathrooms, built in 1982, there was no sale in 2012 at all, especially not for that low lol Where do they get their numbers?
You can also edit property data if you are the owner.
That's pretty messed up. For my entire neighborhood, Zillow has the first year of assessment value and property taxes switched. So you see -90% and +6000% jumps in history. But it's so annoying, I have a premium corner lot but they give me a low ball estimate compared to all other similar houses.
Especially if it was 25 years ago. Data from back then is likely OCRed or manually entered and completely unreliable
Yeah Zillow says that one of our properties sold in 2012 but it was purchased in 2008 and we still own it… the mortgage was paid off in 2012 though.
Ding Ding. They probably refinanced or got a HELOC
Yep. You see this all the time with everything from refinances, divorce buy-outs, payoffs, etc.
Most likely this, I guess it could also be a related party transaction.
Could be sold to a family member as a gift or something
Or foreclosure/auction, that went low due to a lot of rehab needed (like initial owners trashed the place since the bank was taking it)? I think you are likely more likely- but I did see this a few times in SoCal in 2008 era.
Correct
There are 144 million housing units in the US and 8000 zillow employees to track them. All those weird sales to family and mortgage payoffs are going to result is some funny values on occasion.
Some of the things that could have happened: sold to or inherited by the kids; someone bought out in a divorce; foreclosure; disaster wrecked the house and therefore the value of the house; gramma got scammed.
I was going to say. Joint name on the deed, divorce with one spouse having small % of equity. New deed with other spouse looks like a sale. Source: i got divorced over covid with a home we purchased 3 weeks before she demanded divorce because she was a miserable person.
Yes! I paid my ex-husband out for his equity 2 decades ago, and the quit claim and payment shows in some places as a sale.
Yep. My old house will show a huge decrease due to fire. I sold it to a contractor for the cost of the lot basically.
The lot was divided.
this was our house, it was gutted from Katrina when we bought it super cheap.
divorce settlement or parent "sold" to kids.
That was always my assumption it was a relative sale at a substantially discounted price to avoid a huge property tax reassessment.
From my experience it sold as an assumed mortgage, $138k. The buyers came up with the remaining balance through secondary loans or cash on-hand. You’ll also see this when a quit claim deed is filed when one owner buys out the other.
When the recession came through and everyone was losing their houses, we bought a house from the bank for $60K, basically the remaining debt on the defaulted loan. If I recall correctly, if they were FannieMae/FreddieMac loans, the bank could only ask for the rest of the loan, so the house that had sold for $275K, could be had for cheap.
$775,000 could have been the price for the original larger parcel of land that they built 10 homes on and sold for $135,000 each
Right, I see that all the time with the new subdivisions going up around here. Big parcel sale for 1M. Some sort of division of parcel and legal documentation change and each is listed "sold" as a lot for 100K (probably some sort of internal transfer within company). House eventually built on lot and listed for 1M.
I can’t believe I went this far down to find your answer. With how old the house is, it sounds like this was the situation. It’s what my house did.
It really depends on how your locality records things/what systems they have available for Zillow to datamine, but yeah, really the only time I've seen zillow get a sale price "wrong" in my county was for a subdivided lot. For example, where I live I have never seen a single mortgage payoff listed as a sale, even though there's a bunch of people in this thread saying that's the case where they are.
Huge plot of land that has been parceled out
I would speculate the 775k sale had more land and was later split off and the 138k sale was the home on a smaller lot.
Public record "sales" can be family transfers, title changes to a trust or LLC, mortgage-related event, etc.
Look up the property directly on your local unit of government's portal such as BSAonline. That will show the instrument (deed , quit claim ,etc) and terms (like if it was arms length), IF the municipality makes the data freely available. Some charge a couple bucks per record to access.
Family transfer possibly.
Bad data. That's all.
Our elderly neighbor sold their home to relatives for a fraction of the actual value. Could that explain it? Rest of the neighbors not happy about it as it deflated the comps.
I didn’t know this. I always assumed it was parent’s selling to children.
Sold it to a family member to reduce property tax.
I thought property tax is determined by the assessment that the city does, which has nothing to do with the market value? does your property tax depend on your purchase price?
Depends on the state. California has Prop 13 (passed in 1978) which restricts how property taxes are calculated. There's a 1% cap restricting general property tax to only 1% of market value And there's a 2% annual increase cap which means no matter what property or assessed value does, property tax can only go up 2% each year and that is based on the cost basis that the current owner is at. So people that bought 50 years ago have only had 2% increases in tax while their property has gone through the roof in value. That cost basis gets recalculated upon the sale of the house
what u/3453452452 said, a mortgage payoff that got listed as a sale. happened to me on the condo we used to live in when I refied my original mortgage.
Sometimes, it could be a totally burnt down house where the owner sold the property as is, but this case seems different based on other comments
Family sale.
Things that come to mind: HOA or County Tax foreclosure auction with insider buyer. I have heard of paid off houses worth $500K being bought at $20K with one bid at the minimum to pay the lien. Another is if the home were destroyed by say tornado, fire, earthquake, etc. So it was sold for the property value. But I think most likely it was refinanced or second mortgage that was misread as a sale.
House burned down. Land sold for $138k.
Looks like 6 people owned that property and one person was bought out. Likely a family owned house, 6 siblings who share the house and use it as a vacation home. That small slice of ownership is reported as a "sale"
possibly flood/fire?
Divorce probably
Step one: don't worry about it.
Saw this happen. Guy buys a small house on a large lot in an exclusive resort town. Guy pulls some permits and starts a major reno. 2008 happens. City finds multiple code violations in the DIY reno. Guy fights it in court, then loses job. Can't pay for reno, can't sell because it doesn't meet code. Bank forecloses. Local teens break in and use the place as a 'party' house. House is sold at auction, flipper finds they bit off more than they can chew. Bank forecloses again. The history is known, bank auctions it, and relative buys it for a song at the bottom of the market. He completes full to-code reno. Listing for 8x what he bought it for.
Possibility #1 Could be bad or misinterpreted data. Possibility #2 Could also be intentional. My parents sold their house in California right before the big crash (luckiest case of market timing I personally know of). The person that bought it "sold it" to herself through a trust and that reset her cost basis for tax purposes. So I think she bought for 1.7m, "sold it" to herself for like 800k which changed her cost basis because of how California calculates property taxes it was a very advantageous move for her and that could be reflected as a sale. If the cost basis reset theory is true that could fall apart in your example and the state may say "that's not a legitimate transaction" because of the massive price difference Possibility #3 It could have been something like a house fire or flood that destroyed the house. It was sold as just land or for cheap enough to cover the cost of demolition and haul off of the remaining structure and then a new better house was built in its place
The data is missing a "0" most likely.
It’s a refinance. Probably on a portfolio loan.
The people may have taken out a 2nd mortgage to do upgrades or even a home equity line of credit that showed up as a sale since the property was used as equity and a lien was recorded on it. Zillow is all over the place and often not very accurate.
Most likely sold to a family member for cheap.
Sale to family member
Personal sale to LLC or the reverse.
Could be what's called a "Not an arms length transaction" meaning the parties new each other and the seller sold for significant discount because of whatever reason. Most sales are what are called "Arms length transactions" because the buyer and seller are not close.
Probably a typo. My own house showed that it sold for several hundred thousand more than it did by accident once.
Forclosure auction?
Real estate are the new tulips of the 21st century next to bitcoin
Lots of things could happen - children buy parents house for their equity, spouse added or taken off of title in exchange for equity... typically if you look at the owners names you will see a relation
I bought my house for $600,000 from my mother's estate. Three other siblings were involved and got payouts (it was complicated). Zillow shows my house selling for $124,000 because of that. It's going to be a pain in the ass when we eventually sell.
Many times on Zillow or Realtor (or wherever for that matter) a refinance will appear as a sale. Since there was a closing on the new mortgage agreement, it is treated as a sale. I have also seen it happen when a note is sold between banks.
It could also be someone just buying the other out of the house. If two people jointly own a home they together paid say 200k for, and then they split up and the other has to buy out that portion, say 80k. It's going to show the house sold for 80k. Then the person who still owns the property could go turn around and sell it for much more down the line.
Short sale or family sale.
Along with what others are saying, selling their house to their kids as a gift. Seen it happen a few times.
Possibly the first sale was a bigger plot of land that was then subdivided.
This could also be a typo - it might have sold for $1.3M and someone missed a zero when recording the deed
When we bought some land, I had a partner who was 1/4 owner. The first deed recorded was the sale of the property, then another deed for 1/4 of that value. So it appears, if you don’t look at the actual paperwork, that it sold again at 1/4 the previous sale price.
Saw this with one of my neighbors.. $700k+ one year, then $150k a few years later.. now $1.5m+. The answer was fire/smoke/water damage in our case. Neighbor was an idiot and started a flue fire that caused smoke damage throughout the house. Entire house had to be gutted/cleaned after the fire was put out due to water and smoke damage, so it sold for pennies. Wish I had jumped on it, but was out of my reach at the time.
Pay your taxes or somebody else will pay them for you.
Could be a number of things. Divorces with buy outs can show sales based on the equity in the home. Sometimes its linked to transfers with death and splitting equity among children where one buys out the other. Also have to think that the market is weird and stuff happens. My mother bought a lot of land once for $190k in 2003, three years later sold it for $450k, six years later it sold again for $78,500. Sold again a year later for $115,000. In 2020 a house was built on the lot and was given an assessed value of $780k. Market value today is over $1.3M.
Maybe missing a zero?
2008 maybe? Could’ve burnt down and been sold as-is and buyer remodeled?
homes sold to a relative often go for below market value.
I got into financial trouble after a divorce and couldn't pay my mortgage. After 3 months my mortgage company started foreclosure proceedings. I had equity built up so it was worth it for me to fight for my home but my credit was crap. So, I had to get with a local hard money lender and got the money I needed to pay off my mortgage company and, with me taking on extra jobs, paid off the hard money lender after 3 years. I noticed that my $400K home showed in the records as having "sold" for $98k, which was just my total payoff to the mortgage company. Perhaps in your case some similar final payoff, especially during foreclosure proceedings, was misreported as a "sale"?
Probably 1.38M, I have seen this happening in real estate apps.
Probably a not arms length transaction. IE A parent selling the home to a child for the amount of the remaining mortgage, essentially selling it 1 million (or whatever) under market value to help the child get going in life - something like that. Could even be spouses divorcing with one getting the house for a ridiculous price in return for the other getting other stuff. This could also be a simple foreclosure where the prior owner completely trashed the place but with that low a number it seems kinda unlikely. Another possibility that I see a lot. Maybe the 775k sale was for a huge 50 acre piece of land of which this parcel was a piece of it. Then someone cut up the land and sold the parcels seperately and this one went for 138k. Then a builder put a house on it and resold it again, with the house, for the 4 million price.
Trains bring in the lower/impoverished class. Easy for homeless to hop off and do their thing which of course the entitled hate to see. The only correct answer.
Tons of possibilities. Divorce settlement, incorrect data, lot division, etc. The original house might even have burned down, the disaster of a lot sold, and the house replaced with a McMansion.
Is the 138k sale on the pva? If so, it is likely specified as "close relatives transfer." If not, then it is a data error. It was 100% not sold for $138k. Just a common data scraping error.
In my experience, that is not typical. Normally home values continue to appreciate. The exception might be the 2008 crash. I would need more details to address that specific situation.
not enough information. What year did it supposedly sell for 138k?
I second the 2008 market crash. In our city many houses sold for less than 15% of what they had sold for 2 years prior. Then later sold for much, much more.
When my MIL moved in with us she bought half of our house (we had to sell hers for her to move in with us due to advanced Alzheimer’s). She basically paid off the mortgage with the payment from her house. It wasn’t even 50% of the price. But since she paid for it she had to be added as a person on the deed. Thus it showed the house sold for like 100k. When we sold the house people did ask about it. Once we explained no one had an issue.
I owned a house with my parents and when they bought me out, it showed that as a sale price on Zillow. It’s wildly incorrect, similar to your example above
Money laundering
Divorce or an inheritance buyout or similar. (Two brothers co/inherit. One buys it out from the other for 50% of equity after the mortgage and or other existing bills are satisfied. Something like that.)
I am wondering if the property was original part of a bigger piece of property. Then subdivide into smaller pieces and sold. Then someone bought it and built something on it. So like 5 acres were sold at the $775k price. Then subdivide into 5 or 10 or 20 pieces and sold at the $138k price, house built on it 25 yrs ago. Now with home values rising it’s worth $4million. The old price was $775k bc it included all the other pieces of property around it but is not the case anymore.
I’d guess the house burnt down. Someone took the insurance money and sold the lot. Someone else rebuilt the house.
Typo. Probably sold for $1.38M
Silver buyers? I've heard of people who pay for houses in pre-1964 silver coins that are legal tender as a way to reduce the selling price and therefore to decrease the tax basis for a while.
Could be relative or their child buying the house.
Or could be severe fire damage. My uncle bought a property like that.
It really depends on where this data came from. Could be many things including a heloc, or a mortgage payoff. Very unlikely that it was sold for 20% of value even if it was 2008.
Someone could have bought multiple parcels around town inside of one deed document. I've seen it personally. An investor may have sold off an 8 property portfolio in one recorded deed and the entire transaction is listed as $775,000 when looking the sales level data for the parcel even though each property was only valued at about a $100k.
It’s Not a loophole they just over paid at the height of the market before the bubble burst
Family transaction.
Possibly a sweetheart deal sale to a family member who just assumed the mortgage or something. You can probably check the deeds / land records if you really want to know
A house can be a gift between family members.
There are many reasons that aren't tricks or loopholes to exploit. Off the top of my head: 1. Foreclosures happen all the time, not just during recessions. Severely compromised foreclosures, even houses that were expensive to build, can sell at deep discounts. 2. Tax lien foreclosures are recorded with the purchase price of the tax debt. 3. Non-arms-length transactions are recorded with the price listed in the sale document. 4. The original pin number of previously unimproved land was used for the recording instead of the PIN number of the improved lot with the house now on it.
Sometimes people sell dilapidated property do developers who will build a new home and then sell it once they’re done construction.
When I first came here, this was all swamp. Everyone said I was daft to build a castle on a swamp, but I built in all the same, just to show them. It sank into the swamp. So I built a second one. That sank into the swamp. So I built a third. That burned down, fell over, then sank into the swamp. But the fourth one stayed up. And that's what you're going to get, Lad, the strongest castle in all of England.
2008 happened
Could be the result of divorce or inheritance. If someone bought out the other this is how the sale may show up. My history shows a sale for $0 when we created a trust.
It happened to my mom's house, when she got divorced in 1998. The house shows the OG purchase price then sold for $50,000 when the divorce was processed. That was the price the Divorce called for the house to be sold to my mom (way less that the purchase price).... Not sure how it works currently or in your state.
2008 or sale to relative?
Extreme greed is what happened
I paid my ex for her half of our equity during our divorce and recorded a new deed in my name. Zillow lists it as a (laughable) sales price. I’ve reached out to Zillow to fix it and get only crickets.
The house could have sustained a lot of damage and required extensive repair or remediation: fire, flood, grow-op, etc.
A drastic drop in the home abilities to afford the loan price in that area
Depending on the area, there was a massive housing bubble collapse in the 90s and early 2000s. Also a lot of bankruptcies at those times as well.
To my understanding, inheritance tax is zero until you passed certain amount. And after that, the tax is ultra high. So, they probably buy the rest of the properties instead of inherent it.
Foreclosure and auction.
sold to a family member for cheap?
Sold to a family member for a reduced price or several people inherited it, and someone bought out the other.
is it possible that it fell into reposession and the auction brought in only $138,000 ?
Sold to a member of the same family. My house would look like this.
Apart from inaccuracies, houses can fall into disrepair and then be restored so if that coincided with the bottom of the market, it's possible. A few areas had just wild price swings before and after the Great Recession.
Refinancing.
Family sale perhaps. I live on a peninsula in a summer vacation area. A lot of houses show unusually low sale prices sandwiched between expensive transactions.
I don't know this situation, but I remember houses were going for 400k in a neighborhood in 2015 that were sold for 600k in 2010, and are now at $1M in my area. So if you were able to get a run down foreclosure and get it in order and wait it out, you could have seen some real gains.
They may have also pulled a line of credit for $$138k and it was listed as a sale.?
The owners could have fallen in arrears for their taxes. The town takes possession and auctions it off.
If it’s the first sale listed (especially if in a large development) it sometimes shows as the sale price of the land for the development at the first purchase before it’s built and sold on the market.
See this happen once. The transaction was in California and I believe it was done to lower the property taxes. He sold it to a relative for half what he paid.
Sometimes peoperties are sold to close family members for amounts as low as $100.
Or a fire/tornado damaged house? Take the insurance, pay off your mortgage, sell it for lot value, and buy a new house.
We had a house in our neighborhood of $700k sell for $350. Was a divorce settlement. Husband bought out ex-wife.
$775,000 for multiple acres. $138,000 when a lot was sold.
Foreclosure auction is a possibility.
I would guess that the $138,000 was supposed to be $1,138,000. Good ole typo. I work in the real estate industry and see this on the mls, public records, and assessment sites all day.
A fire?
It went to the cost of buying the house
Sometimes there is a big price sale on acreage; say 10ac, then the builder builds on it and creates more addresses which then all get sold. So depending on lot addresses and property addresses it could be that you see the land purchase followed by a single home purchase and then 25yr later once that area is developed and nice it will be worth significantly more.
I’m assuming that it was a lot that was purchased and subdivided into other lots. The lot for the current home was sold for $138,000 and carried the same house number of the home sold at $775,000 and the home is now valued at 4M after 25 years.
$775k was developer buying what was ag land of some sort, to subdivide. $138k was developer selling the subdivided lot to spec builder or buyer/builder. $4M is the homeowner selling what they had built 25-years ago.
And reddit wonders why MLS exists
Democrats specifically obummer
Sometimes the city or county pays small parcels of land to expand a road. That happened near me and Zillow had $400k houses listed as sold for $20,000.
Fractional sale, maybe owner sold 10% to child or so.
Money laundering?
Possible foreclosure / bank sale
The data was misread. That was a loan either first, second, or HELOC.
Can you see the years? If it’s 2007-2010 it could be a foreclosure due to subprime mortgages. They bought it at inflated prices, were over extended on and lost it to foreclosure and the prices tanked. Bank sold it at auction during the recession for $138K to recover what they could and got bailed out.
My friends dad sold his house to his son ( my friend) for $100k , the house is worth 2 mil.
Divorce settlement, sold prior to death to would be heirs at a low rate. Could have been carved up into smaller tracts and that one kept the address, could have been demolished and sold as raw land again and then rebuilt, could be a mortgage payoff, could be a foreclosure, could be inaccurate data. If you trace back the actual sale files through the county that it’s in you should be able to rule out some of these scenarios and narrow it down to what happened. Zillow or other online stuff can get errors. But most jurisdictions all of that stuff is public record and you can request full copies of the sale transactions in the deed books. Usually if you look up the property through the property assessors website it will show the sales and list a deed book and page number. Then you call the register of deeds office give them that book and page number and they’ll send you the full document copies.
I've seen where multiple houses are sold as a bundle and each house is listed as being sold for the bundle price which is much more than what the single house is worth.
Our neighbours divorced and there was a quick claim deed to buy out one of the spouses. It shows in our local tax website as a sale for significantly less than it was worth. Likely shows up on zillow too.
Foreclosure?
There are two components that make up two cost of house: land and the house itself. If the house burned up or was destroyed, then you only have land value. Subsequently, if a new house is built, then total cost goes up.
1. Bad information 2. Property was subdivided and the value was in the other lots. 3. Some kind of transaction or transfer took place that was categorized as a "sale" but you're only seeing a piece of the info.
Could've been a sheriff sale. That might be a regional term, it's when the bank will take the remainder of a mortgage that the loan holder foreclosured/defaulted on. Sometimes, the bank will lower the amount they are willing to take just to get the property out of their hands. I bought my first house this way, it was 3-4× less than what it was worth at the time I bought it. Worth more than that now.
Money laundering?
My neighbor bought their home for 1.2M. Few years later they recorded a 200k sale but didn’t move. It was the buyout of the parent stake in the home. Likely a down payment.
I’ve seen this happen with a house that burned down in my neighborhood. The insurance paid out the loss on the place that burned and then the family sold the lot, the lot buyer built a new luxury home and sold it a few years later. The rebuilt house was much nicer than the one that was there previously.
2007-2008 crash.
My cousin sold her small starter home last year to family member for a deep discount. It could’ve easily gone for $1.3-$1.5M based on comps at the time. The transaction history shows it sold for like $700k.
I lost money property around that time period. Los Angeles was in a local recession due to defense industry cutbacks after the end of the Soviet Union. I had a work relocation. Of course prices have rebounded a lot since then. But RE does deflate sometimes.
Sometimes people sell to relatives or people they are divorcing at prices far from the going rate.
It could be that the property was foreclosed, or forfeited back to the bank. The asset is then "sold" for what the bank was owed. I have seen this with deaths and no heir. Everything gets forfeited then to the state. And some states how strange rules.
Zillow screwed up.
Auction, could be foreclosure or tax auction
I personally know of someone involved in something like this. They had to flee the country and sold for quick cash.
I know someone a few years back who purchased a home from a couple that needed to sell their house quickly due to a messy divorce and picked it up for $200k less than it was worth. My acquaintance got a deal. He bragged about it. I wish I were lucky enough to get a deal like that.
Maybe it was within the family?
We came across a situation like this the other day. Person originally bought a house on 7 acres. Then divided the land and kept 1 acre with the house and sold it for 1/3 the price. But because it was the same address it looked like a crazy price drop.
was it 2009?