Zillow has become one of the more popular real estate websites, and it offers many useful tools. Unfortunately, while these tools can be worthwhile, they can also be unreliable and inaccurate.
Zillow, and other similar sites, can show comparable sales and real estate values and provide useful information to buyers and sellers about area properties including their own without the aid of a real estate agent.
The problem is, the estimates – or “Zestimates” – are not always accurate. This can lead to a lot of confusion and frustration when a buyer is looking for a house, or a seller is planning on listing a house.
Zillow is an automated system that cannot think for itself. It cannot account for variations in any number of things – changes that substantially alter the price from any sort of “average” such as:
Zillow doesn’t know that the town data card is wrong and you really only have 2 bedrooms, not three
Zillow doesn’t know you have a $20,000 structural crack in your foundation that needs repair.
Zillow doesn’t know that your roof needs replacement.
Zillow doesn’t know you have an easement running through your property that limits its use.
Zillow doesn’t know you just added central air conditioning and a pool.
Zillow doesn’t know you have a gorgeous view of the lake.
When you are trying to buy or sell, you cannot afford to be off by tens of thousands of dollars in your pricing or your bidding.
Zillow has created a formula to determine the value of a home based off of public records and information provided by its users.
Zillow knows what a home’s previous purchase price was, and it knows what other homes in the neighborhood sold for, and it uses this information along with any other information that has been provided by the owners to determine what the home is worth.
Zillow is also using a property’s assessed value when determining its worth. Unfortunately rarely does assessed home value have a correlation to market value. They are two completely different things. Assessed values are used by towns to collect taxes and in many cases trail the actual market value of a home. Homes have sold for much more and much less than the assessed value.
Studies show that Zillow can be accurate within 80-90% of a home’s value. So this can be a good place to start.
However, when you go to price a home to sell or you want to know what a home is really worth so you can buy now, its numbers are not accurate enough.
For on-point accuracy, you need a savvy real estate agent than knows the area and is successfully working it right now.
Zillow can be useful in showing how prices are trending, either up or down, in a particular location. This can certainly help you decide where you really want to buy and when. It is always good to know where prices appear to be going when you are making such a large transaction.
If you are planning on selling your home on your own, getting an appraisal or a market analysis of your home from a trustworthy agent is a good idea. Do not rely on Zillow’s Zestimate alone.
Remember that the number one reason why homes do not sell is because of an unrealistic asking price. If your home is priced incorrectly, more than likely you will end up selling it for less than you would have if priced correctly.