Every 30 something’s favorite pastime is browsing Zillow listings, whether they want to admit it or not. Zillow has become so hot for prospective homeowners, they were even given a nod on a recent episode of NBC’s Saturday Night Live. What makes the site so appealing is that it provides clear and concise information about a property that’s easy for non-expert eyes to digest. One of its most popular features is Zillow Zestimate, a home valuation model that one can use to estimate what their property might be worth. Today, we’re taking a deeper dive into the Zillow Zestimate service to help you decide whether it’s the right real estate tool for you.
What exactly is a Zestimate, you might ask? According to their website, Zillow considers both public and user-generated data, as well as current market conditions and other facts about the property to determine what it may be worth. Seems simple enough, which explains the popularity of this service.
In order to generate a Zestimate, Zillow relies on information from a number of different sources. Data is pulled from various multiple listing services, public county records, and even directly from brokerages themselves. Other facts about the home that are considered include:
It’s important to note that while a Zestimate is intended to give you an idea of the value of your property, it does not qualify as an appraisal, nor can it be used in place of one.
The accuracy of a Zillow Zestimate relies heavily on the data that it’s pulling from. If the data is out-of-date, or if it’s inaccurate in any way, your Zestimate will be off. While Zillow does their best t
o estimate your home’s value within 10% of the final selling price, they can only do so if the information available to them is both current and factual.
If you’re obtaining a Zillow Zestimate based off of your own user data, it’s important to input the information as accurately as possible. Although you do have the option to correct any mistakes, it’s not guaranteed that your property will be reevaluated, or that the price will be affected at all.
Living in an area like Southern California, the San Diego real estate market is rather competitive. This means that homes have higher turnover rates, making public data more up-to-date and easily accessible. On the other hand, if you reside in a rural region where home sales are few and far between, it may be more difficult for Zillow to provide an accurate Zestimate based on the data that’s readily available to them. County records, permitting files, tax documents, and the like aren’t always the easiest to obtain, especially for properties that haven’t changed hands in decades.
Unfortunately for many property owners, the Zillow Zestimate tool overinflates their expectations. Often, properties are overvalued, or the range in values is so wide, you’re not even sure where yours lands. When it comes time to list your home, you might find yourself having to adjust your outlook. This could mean reducing the listing price several times before finding a buyer. But if you’d had an accurate estimate to begin with, you wouldn’t have to negotiate your price, and could potentially get your listing sold faster. Although this handy feature isn’t a bad place to start, it shouldn’t be the only home valuation you seek.
If you’re curious how Zillow Zestimates differ from other property valuations, you can conduct a simple survey from the comfort of your computer. All you have to do is find a property on Zillow that you really like, and once you’ve done so, you can compare their Zestimate to other valuations of the same property on competitor sites like Redfin, Trulia, or Realtor.com. You’ll likely find that the numbers vary greatly.
Zillow doesn’t claim to provide estimates that are always one hundred percent accurate. Nor do they intend for to consider a Zestimate to be an official appraisal of their home or property, as explicitly stated on their website. The Zillow Zestimate tool is merely a means of gaining a general idea of your home’s overall value. To get the most accurate estimation of your property’s true value, a comparative market analysis completed by a licensed realtor, or a professional appraisal are always your best option.
If you do happen to use Zillow’s Zestimate feature, just be sure to not get too attached to the estimated value that it comes up with. While this may give you a vague idea of what your home is worth, it could be off by a rather significant amount. Do your due diligence, and seek out estimations from Zillow, their competitors, and other real estate professionals. Doing so will give you the most well-rounded idea of what your property could potentially sell for. Only when you’re confident of this figure should you take the leap and list the home for sale. Even then, you may end up having to negotiate here and there, but it won’t be nearly as treacherous as it would’ve been should you have seriously overestimated.