Maybe you’re contemplating selling or perhaps you’ve heard about the crazy market we’re in and now you’re curious of what your home’s worth.
What do most folks do? They jump on zillow.com to check their “Zestimate.”
But can you really trust Zillow’s estimate of your home’s worth?
In my opinion…
IN MOST CASES, NO.
Zestimates can be a helpful tool. Zillow tracks the trends of home values all over the US. It takes into account recorded public data, such as prior sale prices, square footage, bedroom and bathrooms, yadda, yadda, yadda, and will adjust your home’s value based on which direction your market’s heading.
Zillow posts a disclaimer about its margin of error for Zestimates (which you can read about here). If your home is “on-market” they advertise a median error rate of around 1.9%. If your home is off the market, they state the median error rate is around 6.9%.
Why the difference? According to Zillow, it comes down to the new data that is made available due to the newly published listing data. If your home is off-market, they are only relying on that recorded public data, which may be outdated.
So, a 6.9% error rate? Well that’s the median error rate. Half the time it’s more, half the time it’s less.
That might seem negligible to you and perhaps feel close enough, but frankly there have been many, many times when I’ve looked up off-market homes on Zillow and discovered their Zestimates are off by sometimes hundreds of thousands of dollars, amounting to a 15-20% difference.
One of the big issues with Zestimates is that there is certain info Zillow doesn’t have about your home which can really swing the value one way or another.
What’s the current condition like? Is your location in the neighborhood really quiet and private, or are you on a main artery which sees more traffic? How’s your curb appeal and landscaping? One-story or two-story? Is the square footage accurate on the public records? Any un-permitted work done which the public records doesn’t show?
There are lots of details that are important to your home’s value which Zillow’s algorithm doesn’t know and isn’t smart enough to process.
There are some cases when a Zestimate might be fairly trustworthy, though.
When might you be able to trust a Zestimate?
You’re most likely able to get a fairly accurate number from Zillow in this situation:
1. Your home has sold in the recent past (within the past few years), and
2. You haven’t done any new improvements and there’s no new major damage.
In this situation, Zillow has the correct recorded data on your home and has a fairly good read on the market appreciation since it sold.
It’s not a slam-dunk though. If you’re contemplating selling—even if you’re selling it yourself—you definitely should get an agent’s opinion of value. A poor list price can really impact your sale price. (If you’re going to try to sell your home yourself, here’s how to sell a home in SLO County in 8 steps.)
If you want to try to calculate your home’s worth, here’s an article on how to do it.
Personally, even though I don’t trust Zestimates, I still like them. Occasionally they’re close to the value, and sometimes they’re way off. You have to take it with a grain of salt. So absolutely, check that Zestimate, but please don’t rely on it.
Comments