What is a Zestimate®?
"The Zestimate® home value is Zillow's estimated market value for an individual home and is calculated for about 100 million homes nationwide. It is a starting point in determining a home's value and is not an official appraisal. The Zestimate® is automatically computed daily based on millions of public and user-submitted data points."
Zestimate® uses public record information such as recent home sales and plugs it in to a special algorithm which generates what they believe a home is worth.
Why does a Zestimate® miss the market...
A Zestimate® does not accurately determine how a single property should be priced or what it will ultimately sell for. Zillow is unable to load the algorithm with all of the particulars which set the home apart from others. Land size, view, renovations, pool and other backyard features do not appear to be considered in the valuation. How would Zillow know how one street, neighborhood, or community varies from another? A waterfront home might price higher than another without, a fully renovated kitchen and bathroom might sell higher than another home on the same street.
Tips For Sellers
- Zestimates® are not an accurate representation of what you should expect to sell your home for. As mentioned above there are factors that are beyond Zillows control in determining price. Don't overestimate or underestimate the value of your home in your head.
- Hire a real estate agent to give you up-to-date market stats and make sure your real estate agent has an in-depth knowledge of the area.
- Zestimates® can fluctuate with information that is added in by the owner and/or agent. Look at the information that is listed about your home and add pertinent details.
- Your listing won't always be perfect ~ Zillow gets their information from a feed from MLS. This is sort of like playing a game of grapevine. Each time the feed is sent out to various websites some of the information invariably gets mixed up, changed or just all together lost.
Tips For Buyers
- The Zestimate® is not a negotiation point. As discussed above the Zestimate® does not take in to account many factors and likewise the Zestimate® does not replace valuable real estate agent information.
- Don't use the home sales information as fact. The sales figure for some homes that is reflected online does not truly reflect all aspects of the detail. For instance if a home sold for $500,000 according to the website, it would not show concessions made by either side such as closing costs or personal property purchases.
- Zillow also only shows homes that are currently on the market (or Coming Soon listings that are manually inputted by agent) and probably does not reflect company exclusives. By signing a buyer broker agreement with an agent you are guaranteeing that that agent is working for you and not the seller. Also when signing with a brokerage, your agent is privy to new listings which are just coming on the market so you will have first access.
Why You Should Not Rely on Zestimates®...
Zestimates® are NOT perfect, should NOT be used to negotiate during a sale of a home, and should NOT be a factor when pricing your home to sell.
Zestimates® are a good way to gauge the general direction of the market.
Zestimates® do NOT replace the information that real estate agents have and there are many factors which could impact what a home is worth. Hire an agent which has above average knowledge and success in the area in which you are planning to sell or buy.
Zillow feeds often get lost in translation but don't fear they can be fixed. Moreover how your house appears won't matter if someone is truly interested.
Looking to buy or sell? We're ready when you are!
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