Everyone wants to know the value of their home. Zillow has done a fantastic job of putting themselves as the trusted place to get an estimate. But should you?
The Zillow has this to say about Zestimates.
(note: everything in red is straight from Zillows web site)
The Zestimate® home valuation is Zillow’s estimated market value, computed using a proprietary formula. It is not an appraisal. It is a starting point in determining a home’s value. The Zestimate is calculated from public and user-submitted data, taking into account special features, location, and market conditions. We encourage buyers, sellers, and homeowners to supplement Zillow’s information by doing other research such as:
- Getting a comparative market analysis (CMA) from a real estate agent
- Getting an appraisal from a professional appraiser
- Visiting the house (whenever possible)=
The Zestimate’s accuracy depends on location and availability of data in an area. Some counties have deeply detailed information on homes such as number of bedrooms, bathrooms and square footage and others do not. The more data available, the more accurate the Zestimate.
Data Coverage and Zestimate Accuracy
Nationally, the Zestimate has a median error rate of 8%, which means half of the Zestimates in an area are closer than the error percentage and half are farther off. For example, in Seattle, Zestimates for half of the homes are within 6.6% of the selling price, and half are off by more than 6.6%.
To improve Zestimate accuracy, we allow homeowners to edit their home facts and then we incorporate this information into our Zestimate calculations.
Be aware that in some areas, we might not be able to produce a Zestimate at all, but we do have some basic information on the homes.
This accuracy data chart for this area is pulled right from Zillows web site. On a $300,000 home, a medium error of 6.90% in our area of Minneapolis / St Paul is $20,700! Yikes… That is a lot. What about a 20% error rate? Geez, even just 5% is a big number.
Zillow does the best it can with the information it has but it can’t account for important factors such as location, current market trends, local house inventory, school district, updates, granite counter-tops, poor maintenance, physical obsolescence (appraiser speak for being next to a highway, under power lines, etc), and many other details.
Zestimates give consumers an estimate on what a home might be worth. It is fun to look at, but don’t take the number seriously.
The next most popular quick peek value people look at is the county tax value. Just like Zillow, the county tax value might be close, or very far out of line. It could be high, it could be low.
The bottom line is simple: For setting a sales price for your home, you need a Real Estate Agent. When looking to see if a home is priced right that you want to buy, you need a Real Estate Agent. When refinancing a home, lenders will send a real appraiser to your home.
If you need a good Real Estate Agent in the Minneapolis, St Paul area, I’ve worked with hundreds over the years, and would be happy to put you in touch with one.
