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How Accurate Are Zestimates?

Within recent years, home buying and Zillow.com have become synonymous within the world of Real Estate. Zillow stands as a prime tool for potential and current homeowners to browse neighborhoods and find homes for sale in a given region; simply put, the site has paved the way in online home shopping.  Among the information provided for each home, the site assigns every home a “Zestimate” or an estimation of value, to determine the home’s worth. Zestimates are not calculated from appraisals, but are estimations from the current market value of homes. While Zillow may be providing crucial insight into new homes on the market, the Zestimate does not replace a home’s appraisal and should be only lightly considered when proceeding in one’s home search.

It may also be important to note that Zestimates derive from computer generations – that do not account for any physical features within the home and cannot tell you about the busy traffic on the street or the loud noises from the neighborhood pool. Zestimates can also be rather inconsistent and can greatly differ from a true value of the home. David Howell, Executive Vice President and Chief Information Officer at McEnearney Associates spoke with The Washington Post regarding Zillow:

“The Zestimate is not an appraisal and you won’t be able to use it in place of an appraisal, though you can certainly share it with real estate professionals. It is a computer-generated estimate of the worth of a house today, given the available data. Zillow does not offer the Zestimate as the basis of any specific real-estate related financial transaction. Our data sources may be incomplete or incorrect; also, we have not physically inspected a specific home. Remember, the Zestimate is a starting point and does not consider all the market intricacies that can determine the actual price a house will sell for.”

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Overall, Zillow can still be regarded as a useful tool in one’s Real Estate search; however, homeowners must recognize the faults within the system and consult a Real Estate profession to receive as accurate and up-to-date estimate of their home’s worth.

If you are interested in knowing how much your home is worth, please contact Hagerman Group at 540-369-4622.