Can you really trust Zillow’s Zestimate tool?
Let me start with a story: A couple of years ago, the CEO of Zillow sold his property. The Zestimate said his property was worth $1.75 million. However, the final sales price was only $1.05 million. That’s a $700,000 difference. Do you think he should have trusted that Zestimate? Obviously not!
Zillow’s Zestimate tool gives you a general idea of what your property is worth. The problem is, those Zestimates are extremely inaccurate.
According to Zillow’s own website, a Zestimate is a starting point in determining a home’s value. It’s not an appraisal. The Zestimate is based on public and user-submitted data. Unfortunately, user-submitted data can create big discrepancies.
If you want to sell your house and you know that buyers are going to look at that Zestimate, you might want to beef up that number, right? You may be tempted to embellish a little on the upgrades you’ve done, the size of the house, or the size of the lot. Zillow allows you to change that data.
As a consumer, this is where you have to be careful. Zillow can be manipulated by an owner or an agent. Your own home’s value can be inaccurate depending on how honest your neighbors were when they submitted data to Zillow.
Zillow encourages homeowners to supplement the Zestimate by speaking with a real estate professional to get a comparative market analysis or having an appraiser visit your house. After all, Zillow has never been to your house and has no idea how your home stacks up against the other properties on the market.
“User-submitted data can really throw off your Zestimate.”
If you live in a neighborhood with similar homes, there is a lot of similar data for Zillow to go off of, so the Zestimate can be more accurate in those areas. However, if you live in a rural or more eclectic area, like Winter Park, College Park, or downtown Orlando, the types of homes can vary greatly, and your Zestimate is more likely to be off the mark.
Zillow even admits that more than 90% of the homes in the Orlando area have Zestimates that are only within 20% of the final sales price. That means if you have a $400,000 house, your Zestimate could be $80,000 higher or lower than it should be.
This is why you need to get in touch with a local expert, like myself, to get the most accurate comparative market analysis possible.
Ultimately, Zillow is like WebMD. If you’re curious about an illness you think you might have, then you will probably go to WebMD to research the symptoms. However, you’re going to go to a real doctor to get a diagnosis and treatment.
If you just want to look at home values, then Zillow is fine. If you plan on selling your home, then you need to talk to a professional.
If you have any questions about selling in our current market or would like to know what your home is worth, just give me a call or send me an email. I would be happy to help you!