What is the Zillow Zestimate?
Zillow has an algorithm called the Zestimate that comes up with a home’s value. There are a few things to watch out for when finding your Zestimate.
Although Zillow’s exact formula is unknown, we do know that the Zestimate pulls data from tax records, past sales, and past appreciation rates. Unfortunately, Zestimates often tend to be inaccurate.
Recently, Zillow said that the Zestimate is off 6.9% on average from the actual sales price of a home. In our market, Zestimates can be off anywhere from 7% to 10%. Most of the time, Zestimates are off by even more than that. In fact, I looked at our house today and the Zestimate is 20% higher than our home’s true market value.
The Zestimate is not the only valuation model out there. In addition to online, automated home valuation services (which also tend to be inaccurate), there is the tax assessed value, which is what your county or municipality does. They consider your building versus the value of the land.
There is also the appraised value. While most people tend to look at the appraised value as an accurate, reliable source, it’s important to keep in mind that the appraised value is based on one person’s opinion on one particular day.
Realtors rely on the market value, which is the most accurate value of your property. We use current data, previous data, and future projections to figure out what your home is worth. We also consider things like the location of your lot, your view, the neighborhood, how busy the road is, and what updates you have made to the home. Online valuation tools don’t know about the condition of your home, and appraisers don’t always examine all of those factors, either.
If you’re curious to learn more about Zestimates, here’s a fun project: Go to Zillow and type in your address. Even if your home is not on the market and you’re not even thinking about selling, Zillow will give you a Zestimate. Then, give us a call or send us an email. We’ll run some numbers and figure out just how accurate your Zestimate really is.
Even if you’re not looking to sell your home, it can be fun to know where you stand in the market.
So, reach out to us with your Zestimate or any other real estate questions that you may have. We look forward to hearing from you!