Zillow Zestimates – Are Accurate and do they Hurt Sellers?
How accurate is Zillow Zestimates?
Let’s take a closer look to see why Zillow’s zestimates are important for us as consumers and sellers to understand. For now, look at the infographic from NAR states, 99% of Millennials begin shopping for their home on-line as well as 90% of older baby boomers. It is safe to say that the vast majority of people not only search for a home but receive their information about homes on-line.
How Is Zillows Zestimate Calculated?
Zillow will not give up their exact algorithm for determining home price estimates. Zillow has frequently stated that these are indeed only estimates – they are not 100% accurate. In fact, they are not even close. The use of Zillows Zestimate is only a ballpark starter at best.
We do know that the calculations based on public data and user-submitted data are used to create Zillow’s Zestimate. These numbers are broad and general. Zillow’s Zestimate is only as good as the data it receives from the data source either an index or a user.
Why can Zillow Zestimates be highly inaccurate?
Zillow’s website states the Zestimate median error rate is 4.3%, meaning that Zillow’s estimate is within 4.3% of the home value roughly half the time. Zillow also states that their Zestimates are within 20% of the sales price 86.9% of the time. It’s crucial to understand the math. Twenty percent of a home’s sale price can potentially mean tens or hundreds of thousands of dollars.
Zillow’s Zestimate should only serve as a starting point. This number may be able to give you an idea of the value of your home. That may be fine if you are only curious about the value. However, if you want to sell and put real money into your bank, then I suggest you get a professional appraisal done. Doing so can save you vast amounts of money by the time all is said and done.
Sellers, Be Aware, Zillow Zestimates can hurt you
Since the vast majority of buyers are surfing on the web trying to get information and many assume it is accurate. What happens when they come across your home and discover your asking price is much higher than the Zestimate? Perhaps, they say why is this guy so overpriced, he is crazy. They then skip your home never again, considering it. The sad part is, you may be offering a great deal. If you find your home value is higher than Zillow’s Zestimate, contact Zillow and plead your case. Tell them why you feel your home is worth more than the Zestimate shows. You may also put a disclaimer in the property description as to why you believe the Zestimate is inaccurate. Many sellers are not even aware this is happening. Don’t sell yourself short.
Zillow Zestimates prices are often far lower than the actual market values. I believe this is part of the reason FSBO’s sell for less money on average. Try testing the comparables. Research to find out what a particular home sold for and what the Zillow Zestimate was. Many times there is a difference of thousands of dollars. Do your research and be prepared to explain why you feel the Zillow Zestimate is wrong to a potential buyer. You can hire a realtor to help you with a market price. You can also have an appraisal of your home done. This will give you a very accurate market price, ensuring that you are not leaving any money on the table.
About the Author
Benjamin Ross is a real estate expert and professional who serves the state of Texas. Benjamin started his career in 2002. He was a director for private investment companies, responsible for acquisitions and management of real estate.
As a Realtor, it is Benjamin’s priority and intention to treat you, the client, the way he would want to be treated if he was the client. Benjamin believes every client is unique with a unique set of goals. It is Benjamin’s job to help his clients accomplish their goals big and small.
As an Investor, Benjamin has an extensive history working with real estate investors. It can be challenging to find a realtor with personal real estate investments and the experience that comes with it. The fact that Benjamin is a real estate investor and Landlord makes him unique and beneficial to his clients.
As Source Expert, Benjamin also serves a variety of journalists and bloggers. Benjamin has a passion for teaching others about the real estate industry. Knowledge is power and Benjamin does not mind sharing it.
Benjamin loves to partner with other professionals across the state of Texas.
As a team player Benjamin embraces the knowledge and experience of others. He is always open to new ideas and opinions of others if it results in the success of his clients.
Benjamin’s Published Articles and Quotes (see all)
Because of Benjamin’s knowledge of real estate, his quote’s and articles have been featured in many publications nationwide, including the ones’ displayed below.