I recently had a of couple clients whose Zestimate on their home was $681,000, but it showed that same property had sold for $215,000 two years prior. It turned out my clients had sold another property two years ago for that price, but it was nowhere near it and had nothing to do with their current home. For some reason, the tax information that Zillow obtained was applied to the information it had on their current home, which I assume greatly affected the current Zestimate.
So how accurate are Zestimates?
Zillow reports that the median Zestimate is off by about 5% of what a home sells for. That means for my clients’ home with a $681,000 Zestimate, the value could be $34,000 higher or $34,000 lower. That’s a huge difference.
A recent article I came across written by an economist and real estate agent on realtytimes.com stated that 10% of Zillow’s Zestimates were off by more than 20%. On a $300,000 house, that means there’s a 5% chance Zillow would give you a Zestimate of $360,000 or more or a 5% chance Zillow would give you a Zestimate of $240,000 or less. You can read the full article here.
Zillow’s site even states that the Zestimates are a starting point, which means they are more for entertainment value. It states that in order to get the true market value of your home, you should contact a real estate agent who will do a comparable market analysis or have an appraisal done.
If you’d like to find out what your home is really worth or if you have any other questions, please don’t hesitate to give me a call or send me an email. I’m always happy to help!