Are Zestimates Accurate?

By Donna Lutkins, Cascades Resident and Realtor, Keller Williams Dulles

“Zestimates” are automated property value estimates that appear alongside properties displayed on Zillow. Zestimates are often taken as gospel by both buyers and sellers — if it supports their position. For example, if the Zestimate is low, then the buyers will quote Zillow when making an offer on a home. If the Zestimate is high, the seller believes their home should be listed at that quoted value. Before we go much further… here is a funny short YouTube video worth watching first. https://www.youtube.com/watch?v=BQVSqo97v3U

Real estate agents around the county often have to explain to their clients why a Zestimate is not the most accurate source to assess the value of a home they’re looking to sell or purchase. Zillow does not know, and cannot know, the specific characteristics of neighborhoods or homes that can affect the home value – e.g., does the home back up to an undesirable neighborhood, does the home show well or is it in disrepair compared to other homes in the neighborhood, does it have upgrades, does the home smell? Zillow simply pulls data from a number of sources, many of which may not be accurate. It’s also common that the information Zillow provides is out of date – homes may be listed as active but were sold or taken off the market months before. Zillow also does not pull records directly from the MLS (Multiple Listing Service). Much of the listing information on Zillow is uploaded by real estate agents, so if the agent doesn’t input correct information, the data displayed can be incorrect. Garbage in, garbage out.

So how does a homeowner or buyer accurately determine the value of a home they’re looking to buy or sell? The first step is to contact a local professional real estate agent that knows the specific neighborhood and the most current market values. Most agents will create a free CMA (Comparable Market Analysis) on your home that will be much more accurate than a Zestimate. While a CMA is not a formal appraisal like the one you would receive from a professional appraiser paid for by a lender, it is an accurate estimate of your home value as it relates to other recent home sales in your neighborhood and takes into account the total condition of your home, including upgrades and other specifics. Also, unlike Zillow, the information an agent accesses to create a CMA is pulled directly from the MLS. An accurate CMA is then used as a solid foundation to create a realistic pricing/offer strategy to purchase or sell a client’s home quickly at the best possible price.

Bottom line, beware of Zestimates… While it’s fun to get an instant value on a home that you’re looking to buy or sell, remember that real estate professionals know that Zestimates are notoriously inaccurate and misleading and they will never rely on a Zestimate to determine the real sales or purchase price… If you want to get an accurate home value estimate, let an experienced agent provide you a free CMA. You’ll be glad you did!

 

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