Can you rely on Zestimates? Sellers like to think that they should price their homes according to this number, but these valuations are usually inaccurate.
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Today I wanted to talk about the famous Zillow Zestimate. Are Zestimates accurate? I would argue that they almost never are.
Many homeowners tend to think of Zillow as the holy grail for home values, but did you know that Zillow’s CEO himself, Spencer Rascoff, can attest to the inaccuracies of the Zestimate? On February 29th of this year, he sold his home for $1,050,000. The Zestimate on his home from his own company was $1,750,000 — more than 40% off from his sale price!
Zestimates are almost never accurate.
Why is the Zestimate so inaccurate? A Zestimate uses a computer-generated algorithm that pulls in data to give you an estimate on the value of your house. This algorithm, however, cannot account for the intangible and local characteristics of your home. For example, Zillow does not factor in any upgrades you’ve made to your home, its layout, or its proximity to surrounding neighborhoods that may impact its value. The Zestimate is a good conversation-starter for home values, but it is far from the final word on your home’s actual market value.
What should you do in order to get an accurate assessment of your home’s value? The best way to determine a property’s value is to talk to an experienced professional agent who will do the research, find comparable sales, physically assess the property, and then analyze the data.
When you're selling your home, pricing it properly and understanding the true market value from the beginning are two of the most important things you can do.
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