You probably know this already, but the website Zillow has something that they call a Zestimate. It’s essentially an automated home valuation tool. I want to point out three things about this tool that show just how reliable (or unreliable) it is:
1. Zillow is a marketing company, not a real estate company. As a marketing company, the data that they have is provided by real estate agents. However, not all agents want to give up their data to Zillow. This means the data is often inaccurate and ultimately limited.
2. Zillow uses an algorithm. However, this algorithm uses that same limited data to come up with a Zestimate. For instance, a house that backs up to a highway or a railroad track could be valued the same as a house in a quiet cul-de-sac. A house that hasn’t been updated in decades and a house that’s had a major overhaul could be right next door to each other and their Zestimates could be almost identical.
3. Did you know that Zillow’s CEO sold his Seattle home for 40% under its Zestimate? Zillow’s website even has a disclaimer that says their figures could be up to 15% inaccurate. 15% on a $300,000 house is $45,000. That’s a huge swing in either direction. That’s like fudging on your weight by 15 lbs and getting caught by your doctor.
In short, never rely on Zillow as a means to price a home you want to sell or to figure out a good asking price on the house you want to buy. Let me help you navigate the real estate market with the truth of the numbers in the MLS and my own personal experience in the business.
If you have any questions or need any real estate advice, give me a call or send me an email anytime. I look forward to hearing from you soon!