What did you think? Thrilled because the estimate is much higher than you thought and you can’t wait to brag to the neighbors? Or were you simply devastated by the low number? Hold on! Take a breath… your “Zestimate” may not be as accurate as you think!
According to Zillow “The Zestimate home valuation is Zillow’s estimated market value, computed using a proprietary formula. It is not an appraisal. It is a starting point in determining a home’s value. The Zestimate is calculated from public and user-submitted data, taking into account special features, location and market conditions.”
No one knows the exact “super secret” formula, but we do know it uses physical attributes of the property, like square footage, bedrooms, etc, which is readily available through public records, along with assessed tax values, nearby home sales and homeowner input.
But here’s the issue. There are many other things that affect the value of a property. An online mathematical formula doesn’t know if the kitchen and bathrooms have been updated, if your neighbor had 25 pets, the floor plan was funky or the whole place was painted flamingo pink.
If you check out the fine print on their website, Zillow’s FAQs state that “nationally Zestimates are currently within 20 percent of the final sale price 82.5 percent of the time”. Wow! That’s a significant margin of error.
So sure, check out your Zestimate for fun, but if you really want to know the true value of your home, hire an appraiser or request a Market Analysis from an experienced real estate agent who knows the area and is in the game every day.
Steve, the Listing Specialist for The Hoagland Group says “I love Zillow! It validates how much clients need a great real estate agent!” Thanks Zillow!About the Authors: Steve and Tonda are co-owners of The Hoagland Group -- a small family real estate team specializing in helping families make great moves. How can we help you?