Can You Really Trust Zestimates?
Today I want to talk about a topic I get a lot of questions about: Zestimates. Zestimates are Zillow’s automated home value system that will tell you what your home could sell for in the market. Is this the best way to determine value, and should you trust it? The answer is maybe, but it might not be a good idea.
Zillow themselves have disclosed that their Zestimates can be anywhere from 5-15% inaccurate. They use a basic algorithm to determine value that takes into account square footage, bedrooms, and bathrooms, but not much else. They also use sales data from their site, but that is often inaccurate as well.
So please don’t look at your Zestimate as the exact figure your home will sell for. To truly determine your home’s market value, you need to hire an agent who has boots on the ground and understands what buyers are looking for.
“Don’t look at your Zestimate as the exact figure your home will sell for.”
There are a lot of things that go into determining your value that aren’t calculated in Zillow’s algorithm. Things like absorption rates, inventory, and interest rates can all change from one price range to the next.
With that being said, there are a lot of agents out there that don’t have a ton of experience. It’s easy to get your real estate license, but it’s much more difficult to get to the point where you have the experience needed to accurately assess the value of the home. It’s important to have your agent run a thorough comparative analysis from the past 6 months to price your home right. The same goes for Buyers, when purchasing a home, make sure your agent runs thorough comps to ensure you are purchasing the home at a good price and avoid overpaying!
So, be careful on Zillow, and don’t make your decisions based on that valuation. If you have any questions for me or are looking to buy or sell, give me a call or send us email today!