Have you ever wondered how accurate the Zillow “Zestimate” really is? Whenever I am doing appraisals I have homeowners tell me what their Zillow “Zestimate” is. I am sure they are hoping that my appraisal is similar to that number (if it is high), however the two could be close, but more times that not they are pretty far apart.
I actually just found out recently how you can determine the accuracy of Zillow in your area. Take a look at the video to learn how. If you don’t see the video then click HERE to go to my Youtube channel.
Zillow has gone back in time to compare their historic Zestimate with what the property actually sold for. They claim that their “estimated market value” is not an appraisal, but in reality an estimate of market value is an appraisal, but it’s one that cannot be used by a bank and one that you may want to think twice about before using to determine a sales price for your home. They provide a range in value which can vary widely. This information is based on public and user submitted data, both of which can vary in accuracy. County records in many states do not reflect newly finished areas or additions where a building permit was not obtained. Zillow explains that the further apart the spread from high to low the less accurate their estimate is. The counties in which various sources of information are available are typically the ones that are the most accurate.
I believe that you have to see Zillow for what it is and don’t expect much more. Without actually looking inside a property, and using the human touch to sift through sales information, you are only going to attain a certain level of accuracy. Another thing I would like to point out is that computers do not recognize similar market areas. An example of this is school districts. In many cities property values are driven by what school district the home is located in, and I have seen Zillow comparables pulled from areas in different school districts, which can give an inaccurate indication of market value. One other very obvious area where inaccuracies can occur is with property condition. Appraisers are trained to research this information so that adjustments can be made. If a comparable is in inferior condition an upward adjustment will be made to reflect this.
The bottom line is that an appraisal made by a person is going to be much more accurate than a value estimate provided by Zillow or other similar website. Have you had a “Zillow” experience where the value was close? far off? I would like to hear your opinion so just leave me a message below.