Debunking Zillow Zestimates Share
November 21, 2014
We’ve all done it.
We’ve looked up Zillow’s Zestimates on homes. It’s incredibly tempting, and just way too easy.
I admit, I’m guilty too.
But what I found frustrated me for all those homeowners embarking on selling their biggest investment. Zillow’s national accuracy is astounding. Only 50% of the time do they come within even 7% of the accurate price. For San Diego, only 46% of the time do they come within even 10% of the actual value.
So let’s tackle that. If you have a home that is worth $800,000 and your list price is 7% off, that is $56,000 off. And because that 7% off includes estimates both above and below the actual value, the real swing is $112,000.
That’s not even factoring in the fact they are within 7% of the actual value only HALF of the time. The other 50% of Zestimates are 10, 15 even 20% off. Are you willing to risk those odds on an investment as large as your home?
I guess it makes sense. When did doing something the easy way, such as typing in an address online, ever produce great results? And with a home being the largest investment for most people, it scares me that so many buyers and sellers are lured into a false sense of accuracy with Zestimates.
Why It’s Inaccurate
Zillow doesn’t tell an accurate story of your home. How can it? It has never seen your home. While Zillow may have a better track record with cookie cutter neighborhoods, Southern California, especially La Jolla, is anything but.
Zillow pulls from computer generic data, such as lot size, location, square footage, taxes paid, tax assessments and related transactions. The funny thing is, they even tell you the information they pull isn’t always accurate:
“Since our data comes from public records, the information can be outdated or missing. Since the amount of data we have for a home affects the Zestimate accuracy, it is important that you review your home facts.”
Since the computer has never seen your home, it doesn’t know what condition it is in or what renovations you made. Two homes with the same square footage, but one with extensive water damage, will read the same on Zillow.
And how can the algorithm know that you updated the kitchen to include stainless steel appliances, handcrafted maple hardwood floors and natural stone countertops? Or differentiate between 180-degree ocean views against the sliver of an ocean view in the upstairs bathroom.
But more than that, a computer can’t calculate the value of the unique features that make a house a home, such as the proximity to quality schools, the walkability of the area or the charm of the neighborhood.
When To Use Zillow
Don’t get me wrong, Zillow’s quick and easy snapshots do have their uses. If you are looking to see if you may be underwater on your mortgage, if your home’s value has increased since you bought it or are exploring similarly prices homes in other neighborhoods, Zillow is your tool.
For those just perusing home prices, or comparing the cost of living throughout the country, Zillow away! To give generic information to satisfy curious onlookers is why Zillow was created.
But when you are actively selling or purchasing a home, utilize experienced professionals who generate the most accurate results. Because of its inaccuracy, banks won’t use it when determining loans, appraisers don’t base assessments on Zillow’s findings and experienced realtors won’t risk the sale of your home on an easy solution. You shouldn’t either.