Here’s what you should know about the accuracy of Zillow’s Zestimates.
When was the last time you checked your home’s value on Zillow through their Zestimate feature? I understand the appeal. It’s a quick and easy way to find your home’s value.
My wife showed me our home’s Zestimate the other day, and my initial thought was, “Wow, if I can get anywhere close to that, we’re packing our bags tonight.”
However, it’s important to understand how Zestimates are formulated. Zillow uses four main components to come up with values:
1. Neighborhood details. They look at what similar homes in your neighborhood have recently sold for. However, they don’t know each and every upgrade, special feature, and uniqueness of each home that plays a significant factor in its value.
2. Popularity on Zillow. This is based on the number of views, saves, and shares that your home receives online. I had a recent listing that went live on the MLS and on Zillow shortly after. The first few days on Zillow, the Zestimate was $200,000 below the list price. By day four, the Zestimate was now $20,000 higher than the list price. That’s a $220,000 swing in just a few days and too much volatility to be accurate.
“Analytics and algorithms will never take the place of an expert Realtor.”
3. Home facts. This includes square footage, lot size, etc. Zillow may know your home’s square footage, but they might not. The tax data they’re using is often inaccurate, and Zillow has no idea what extra updates have been done to your home.
4. The list price. This one seems obvious, but in today’s market, the list price probably isn’t what you will get for your house.
For an accurate opinion of value, you need an expert Realtor to come out and give their expertise. They’ll be able to spot the extras that increase your value and the challenges that may lower it. Analytics and algorithms will never take the place of an expert Realtor.
Next time you check your Zestimate, don’t get too low or too excited. Just reach out to us, and we can let you know what your home could sell for in today’s market. If you have any questions for us in the meantime, don’t hesitate to reach out via phone or email. I look forward to hearing from you soon.
