Zillow’s Zestimates provide quick estimations of a property’s value. After typing in an address on Zillow, a price estimate will be automatically generated by the website. Zillow also provides details about the property; including the lot size, average taxes, photos, and numbers of bedrooms and bathrooms. While many homeowners value this tool, there are several reasons that Zestimates could be off.
Error Rate
Homeowners need to use Zestimates as a guideline. Considering that the estimates are computer generated and don’t examine the inside of the home, there is room for error. On average, Zestimates have a 6%-8% error rate. Therefore, if Zillow stated that a home was worth $100,000 there would $6,000-$8,000 discrepancy. Real estate agents that have experience in the local markets and can thoroughly walk through your home can refine your estimate to a more exact value.
Incorrect Data
Zestimates can only be as accurate as the data. If any of the information about a home is wrong, whether the lot size or number of bedrooms, the estimation will be less reliable. If users do find errors in the data, they can be reported and corrected. Yet, these changes take time to fix and the values usually do not change dramatically.
Interior Features Not Accounted For
If your property tax assessor does not take into account every upgrade and interior features within your home, Zillow has no way of knowing it. Therefore, the interior features or upgrades to your home are not included in the valuation. For example, if you did not obtain a city permit to finish your basement, there is no record of this upgrade and Zillow does not include it in the Zestimate.
Based on the error rate and unaccounted for information, Zestimates provide a starting point when beginning to estimate your property’s value. Local real estate agents can take into account local markets, comparable properties, and the upgrades/unique features of your home. From there, the real estate agent can give you a more precise valuation.
By Anna Hellman
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