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What is Zillow Zestimate? Why it’s Probably Wrong?
August 20, 2022
What’s a Zestimate?
I am sure you have seen that big number that stares right at you as soon as you pull up your address on Zillow. What’s your home’s Zestimate? So many people take that number as gospel, and it’s a confusing thing to see once you get to the bottom of things.
So What is a Zestimate?
The simple answer is a Zestimate is your home value estimate. Zillow’s website says the following, ”The Zestimate® home valuation model is Zillow’s estimate of a home’s market value. The Zestimate incorporates public and user-submitted data, taking into account home facts, location, and market conditions.
It is not an appraisal, and it should be used as a starting point. We encourage buyers, sellers, and homeowners to supplement the Zestimate with other research such as visiting the home, getting a professional appraisal of the home, or requesting a comparative market analysis (CMA) from a real estate agent.”
As you can see, Zillow takes all the responsibilities off of their plate by summarizing that they say, we pulled some numbers together, but we don’t trust them, and neither should you. You should contact a professional, whether an appraiser or real estate agent, to get the value of your home before you sell.
What are the Numbers Behind a Zestimate?
Well, Zillow keeps up with closed prices and sold prices in each? Right now in 2022 Zillow’s data says that off-market price (the number you see on your home) has a median error rate of 7.5% for North Carolina. Do you think what that mean to me? Well, pretty much half of all homes in North Carolina value is off by at least 7.5% of their Zestimate.
You probably are thinking, well, what about my area? Charlotte’s market has faired a little better at 6.7%. So let’s break it down for you. You have a home you are going to sell, and Zillow says your home is worth 225,000, but it’s off by the North Carolina state average of 7.5%.
Here’s an example: Your home value would be 242,000. You listed your home for sale and get full asking for your sale price, but wonder why you had so much interest in the first couple of days.
Congratulations, you just left 17,000 on the table, and you got to do all the work yourself. We see it every day and don’t want to see it for you. So let us get you the value of your home and show you how we can keep that money in your pocket.
Didn’t quite call all that; well, pretty much in this example, Zillow caused our seller to list the home well undervalue
So Why Does Zillow Miss The Home Value By So Much?
Zillow bases all its information on zip codes. This means that a nice home in the country gets just as much value as the home down the street that is going into foreclosure.
Zillow doesn’t know areas. Do you know the old saying about across the railroad tracks? Railroad tracks might not be the boundaries to change a home’s value, but what about homes in a different school district or not in the city limits?
If they are all in the same zip code, they get the value. Do you think Zillow knows the difference between if a home on the lake has a pier, a boat ramp, or a boathouse? Not, and once you are listed for sale, there’s no turning back.
I pretty much never trust an automated value. We know that they can give you a good base value, but there’s too much to risk to not contact a real estate agent to get a real home value estimate. Want to know more? Shoot us a message or call us at 336-939-6683.
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