We’re often asked about the accuracy of Zillow from our real estate friends and family. Whether they are considering selling, want to know if appraisal value will support refinancing, or just curious about how much a friend spent on their new house, Zillow’s Zestimates provide a quick opinion. “Why aren’t Zestimates more accurate?” is the question we are asked. There are a few reasons. Understanding what they are can help you use the information wisely.
1. Basic Information is Inaccurate
The data Zillow’s algorithms are based on come both public data and user-submitted data and is updated three times a week. Estimates can only be as accurate the data. So if the square footage, lot size, bedroom/bathroom count are not accurate the estimate won’t be accurate. Even if a homeowner corrects information, Zillow cautions that it won’t result in an immediate change in the home’s estimate, and sometimes it won’t result in any change at all. Zillow’s approach to the inaccuracy problem is to report range for value.
2. Errors and Omissions in Sales Prices or Property Tax Records
Zillow uses the date and price of the last sale in its estimates. In some locations its a large portion of the figure. Comparable sales affect a home’s estimate, so a mistake in one home’s sales price record can affect the estimates of comparable homes.
Zillow’s algorithm also considers the actual property tax paid, any exceptions to tax assessments as well as other public property tax data. If the tax assessor’s data is inaccurate, it can affect the value estimate just it does when basic information is inaccurate.
3. Additions, Upgrades and Condition
Zillow has no way of knowing if any upgrades, additions, or improvements were made to a property. If permits were registered with the city that information may or may not be passed along to tax authorities. Even if permits are on record, Zillow will value your and your neighbor’s home similarly. Regardless that your fully remodeled kitchen will yield a much higher sales price than yours neighbor’s 1980’s original.
When it comes to projecting current market value, accurate results depends on accurate data AND:
Using the right data (it may be accurate, but is it applicable?)
So use Zillow or any other site that offers an estimate as a general guideline. The best option for a comparable market analysis is from your trusted real estate professional. Please know we are here for you not just when you are buying or selling … but anytime you need us! If your thought is “Gosh I don’t want to bother them.” Just remember, we’re on your team --- when YOU need us. Whether is just curiosity, a referral to vetted vendor, a question, or its time to explore options, we on your team.