Zillow Zestimate - Can I trust it? Do I trash it?
I get asked very, very often about Zillow "Zestimates" and whether or not they are accurate and a good gauge of a homes value. My answer is "No, not really". Zestimates are a good starting point for home values and can be used as a reference but in no way are the estimates provided accurate or a true market evaluation.
Heck, even Zillow states on their own website that Zestimates Nationwide, are currently within 5% of the final sale price only 38.4% of the time. Yes, you read that right. Zillow is within 5% of the actual sales price 38.4% of the time nationwide. This is a huge difference for those person who look at a Zestimate and think their price is an accurate value. Sadly, most of these errors are on the high side and give potential home sellers a vale well in excess of their homes ACTUAL value.
From Zillow.com's website:
So using this math above, on a $400,000 home sale, and based on Zetimates being within 20% of the transaction price 83% of the time the value swing is almost $80,000! In the Atlanta market the estimate is within 20% of the sales price only 84% of the time and based on the average sales price in our are of $250,000 this is a value error of over $20,000 and Zestimates are within 5% of the final sales price only 37% of the time.
To get a better understanding of the Zestimates, let's look at Zillow's CEO, Spencer Rascoff's home which has a Zestimate of $1,600,000 and it is currently for sale for $1,138,900. If the CEO of Zillow has a value less than a third of what the Zestimate states can we as a typical consumer really trust the accuracy of the information provided to us?
Some people would say that I am being biased against Zillow and that is furthest from the truth. I like ZIllow. We love having our clients review our Team on the site and use them as a marketing tool for our business. We get a lot of leads from Zillow and they are a useful part of our business. My intention here is to simply educate everyone that using a estimate from their site can give a seller a sense that their home may be worth more than it actually is.
Is Zillow useful? Sure it is. Is it the be all, end all of market valuations? Not even close in my opinion. If you want a true market evaluation of your home let me know and we can provide one for you. No cost to do this and we are happy to help. Reach out to us at 678.775.2787 or email us at [email protected] /* */ for more information.