Thursday, May 17, 2018 / by Andy Mandel
Many people wonder whether Zillow’s Zestimate feature can be trusted, so today I’d like to get to the bottom of this common question.
Want to sell your home? Get a FREE home value report.
You’ve likely heard of Zillow’s Zestimate feature, but can you really trust this online tool?
When Zillow assigns a numerical value to a home through their Zestimate feature, the figure is determined by a computer algorithm. And this algorithm is based on things like a home’s square footage and the number of bedrooms and bathrooms it has. It also takes into account comparable properties within a certain mile radius.
What the algorithm doesn’t take into account, though, is where issues arise. The problem with the Zestimate is that it doesn’t consider specific neighborhoods, upgrades, or other significant home features when it assigns a value to your property. A bathroom remodel or a recently added room will go unaccounted for.
So while Zestimates can be a decent starting point, even Zillow admits that the tool has a wide margin of error. Here in South Florida, an estimated 50% of Zestimates are within 8.9% of a home’s true value. The CEO of Zillow himself had a Zestimate on his home that was 40% higher than what his property actually sold for.
Another factor Zestimates fail to consider is which school district a property falls within. As we all know, school districts can have a significant impact on home value.
Ultimately, the bottom line is this: If you want to know your home’s true value, you must consult with an experienced, local real estate agent. You need to have a conversation with someone who knows the area, the school districts, and who can see the true condition of your home.
So if you have any other questions, would like more information, or want to discuss the true value of your home, feel free to give me a call or send me an email. I look forward to hearing from you soon.