According to Zillow: “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.” While this sounds like the data collected would be accurate, Zillow’s proprietary formula often leaves people scratching their heads.
With over 90% of home buyers starting their search online the Zestimate (or similar online tool) is one of the first places they check. Many believe that the Zestimate is the “true” price of the house and the asking price is just wishful thinking from the homeowner. The problem with these Zestimates is that they are usually inconsistent and more often than not inaccurate.
But what makes the Zestimates so inaccurate? Below are some very common reasons why the number Zillow gives is nowhere close to what the value of the home actually is.
Mistakes or Omissions in Tax Records or Sale Price
Accidents happen, it is too easy to lose a zero along the way or a number ends up transposed. If the data Zillow uses to generate a Zestimate is incorrect then obviously the number will not reflect the correct value.
If a home is recorded as a two bedroom when in fact it has 3 that will cause the Zestimate to be incorrect. Also, lot size and square feet have a big impact on the Zestimate as well. If the adjoining lot was sold along the way then Zillow could have the wrong lot size, therefore, making the Zestimate overestimate home value. Zestimates are only as accurate as the information given and when that is faulty the number will not be correct.
This is actually a pretty common issue with Zillow. Say the last purchase of the home was 10 years ago, and 2 years ago the homeowners did an entire remodel as well as added on a screened in porch and pool. There is no way for Zillow to know this and the estimate will not reflect that information. Upgrades like granite countertops, hardwood floors, or additions will increase your home’s value but the Zestimate will not.
Zillow’s Zestimates are a great place to start but it is important to understand that at the end of the day they are just an estimate. There are just too many factors that can change the Zestimate for them to be entirely accurate.
Using a local REALTOR is the best way to get an accurate evaluation of your home value and its marketability. Buy local, Sell local!
I am passionate about Real Estate and eager to answer all of your real estate questions! Text or Call me at 360-880-2356 or email me directly to ask about Buying, Selling or Investing in today's Real Estate Market - serving Lewis County & Thurston County, WA.
Certified Residential Specialist | Real
Mountain Valley Real Estate