How accurate is Zillow’s Zestimate? Not very, and there are three main reasons why.
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When it comes to Zillow’s Zestimate tool, there are a few things you need to keep in mind about Zillow and home values:
1. Zestimates can be manipulated by the homeowner or an agent coaching the homeowner. In preparation to list the property for sale, the owner can add updates, change the square footage, and do other things in Zillow that will drastically change their Zestimate. Sometimes, buyers will compare the Zestimate to your asking price to determine what kind of offer they should make and if the home is priced fairly. The problem is that the Zestimate is just a ballpark number, not a fair market value.
2. Zillow can be off by 10% to 20%. In our county, that number is definitely closer to 20%. Zillow itself tracks the Zestimate and the actual sales price of their properties and say that it’s often off by 10%. However, I’ve seen Zestimates in our market off by 30% or 40%.
3. You need to ask a professional. After all, if you think you might be sick, you will look up your symptoms on WebMD. If you are actually sick or concerned, then you will go straight to a doctor for diagnosis and treatment. It’s the same with your home value. It’s fine to look at Zillow if you’re just curious, but if you really want to sell or refinance, then you need to reach out to a professional real estate agent so that you have an accurate understanding of what your house is worth in the current market.
Now, I’d like to give you a more specific example. Let’s try an experiment. Send me your Zestimate and your home address. I’ll pull some comparables and tell you what the actual market value of your home is.
If we get enough people to participate, I’ll do another video sharing the results of what I found. That way, you will have a clear understanding of how accurate (or inaccurate) Zillow really is in our market.
In the meantime, if you have any other questions about real estate, just give me a call or send me an email. I look forward to hearing from you!