A new trend has been observed recently in Zillow “Zestimates”, property valuation estimates from Zillow.com, prompting some to ask how accurate is a Zestimate. Watchful eyes have noticed that Zestimates sometimes change to more closely reflect the listing price or closing price, once the home enters the market or goes under contract. This could be seen to indicate that Zillow is changing Zestimates based on the amount owners list or sell their homes for – instead of the homes’ inherent value. When asked about this trend, Zillow admitted they sometimes take information from list prices, a change from their earlier stance that they played no role in Zestimates. Also worth noting: warnings now appear on some Zestimates stating that they may be inaccurate (accompanied by a graphic of a robot with a missing arm).
Whether you are looking to sell your home or buy a new home, you should know that estimates from Zillow are far from reliably accurate. Just try comparing a property’s Zestimate with other real estate sites such as Trulia, Realtor.com or Redfin – you will probably be surprised at the difference in list prices that appear! Zillow arrives at these prices using formulas that cannot take all factors into account. Zestimates can never replace an experienced real estate agent who has seen the home firsthand, understands what makes it special, and knows how to compare its value accurately to other homes in the area.
Often, Zestimates are based on assessed values for tax purposes – which are generally lower than the actual amount the home could sell for. Furthermore, they may not include information on renovations made to the home since its previous sale, leading to significant underestimations of its value. Or the estimate may be off in the other direction by failing to factor a roof that needs replacing, moisture problems or a pest infestation.
The bottom line: take Zestimates (and other real estate website valuations) with a large grain of salt. For an accurate estimate, hire an appraiser or turn to a real estate agent you trust. If you are thinking about selling in the future, contact one of our agents to get a free market analysis and value estimate. Call us at 203-427-8250 or reach us at firstname.lastname@example.org.