Are Zillow Estimates Reliable?
For various reasons, consumers often want to know the value of a home. Zillow is a popular site that consumers often use for that purpose. Zillow’s estimates, termed “Zestimates,” are steadily becoming a household term when discussing the value of a home.
As a homeowner, you may want to inquire about the change in your home value for many reasons, ranging from: refinancing considerations to just wanting to know how much your new neighbor paid for her house.
Although you may want to rely on Zillow as a one stop shop for accurate home value estimating, the question remains whether you should! Attemping to learn about a homes value through the use of Zillow could cause some serious miscalculation on your part.
In fact, real estate agents get asked all the time – are estimates from Zillow accurate? For many agents, Zillow has become the bane of their existence. Agents are constantly having to explain to consumers that you never want to rely on an algorithm to predict the value of a home!
For some consumers a lack of trust can form between a real estate agent who has suggested their home is worth a lot less. As you can imagine, the experience is not a pleasant one when buyers or sellers are putting more stock in a Zestimate than a professionals opinion.
I say all the time you have a better chance of spotting Big Foot than an accurate Zillow estimate. Buyers and sellers should take this to heart.
1. Zillow Uses User-Submitted Data
Zillow uses user-submitted data in its collection of property values. The company does also use public data when updating its computations, but depending on the accuracy of the submitted data, their entire calculation could be off.
When calculating a home value estimate, Zillow personnel run the public and user-submitted date through an algorithm. The data is not researched, but it is analyzed. However, all of Zillow’s estimates are based on a computer process. That said, if the data being submitted happens to be inaccurate, the estimate will also be inaccurate.
Learning the wrong value of a home can lead to unnecessary complication and confusion in several instances. Since Zillow estimates based on improper fundamental data can be wrong, a smart homeowner should always counteract the systematic deficiency.
One way to balance the process would be to supplement the estimate with an actual human appraiser or real estate agent. An actual experienced professional can look at the Zillow estimate and identify when an inaccuracy has occurred. As a home buyer or seller you should never trust a Zillow home value. Doing so is going to lead to making poor real estate decisions.
2. Zillow Uses Third Party Sources for Tax Information
It is not an uncommon practice for third party data to have inaccurate entries. For example, tax assessor databases get filtered through different intermediary public availability sources, which can lead to inaccuracy in the process.
Zillow estimates take into calculation paid property taxes or assessed value. If Zillow is not using the original tax assessor information, but a third party data collection source, the process can lead to discrepancy. Zillow also uses the price and date of the last sale in its calculation of a home value, and if this information is incorrect, the Zillow estimate could further be wrong.
The estimate can wind up above or below the actual home value in question, which can lead to undesired obstacles in the process of estimating the true value of a home. An experienced appraiser or real estate agent can be used to counteract the potential discrepancies of a Zillow estimate.
Working as a Westborough Mass real estate agent for the past thirty plus, I can say with certainty that most of the time the home value estimate is off by 5-10 percent. When you are buying or selling a home this kind of inaccuracy is unacceptable.
What Else Throws Off The Zillow Estimate?
There are many other factual pieces of information that can throw off a Zillow home value including the following:
1. You just completely remodeled your kitchen to the tune of $60,000!
2. You added a new composite exterior deck for $15,000.
3. You finished a room over your garage for a 4th bedroom.
4. You just installed central air.
These are just a few quick examples. The point is Zillow has no idea when you make improvements to your home. They also have no clue when items in your home need replacement. Zillow has no idea your roof is 25 years old and needs to be replaced because it just started leaking. Do you think they know your heating system is on it’s last leg? No siree they do not. Valuing a home is a complicated process that can only be done by experts, not an algorythm. Sorry folks it’s impossible.
Zillow also cannot possibly know the difference between being is the best neighborhood in town vs one that is considered middle of the road. Real Estate agents preach location all the time for a reason – it’s a big deal!
Zillow doesn’t know you have the best lot in the neighborhood and it’s not even close.
Take Into Consideration:
An online valuation tool is just one way to learn the estimate of a home. Using a Zillow estimate as a conclusive measure in assessing a home value, can lead to delays and unsatisfactory results. Supplementing a Zillow estimate with an actual experienced real estate agent, or appraiser, can help alleviate some of the discrepancy when using an online value to learn how much your house is worth.
These estimates should be used as a starting point and nothing more. Real estate agents and appraisers are able to take a second look over Zillow estimates and use professional skill, experience, and understanding in assessing home value. While it is true that incorrect user-submitted data Zillow that relies on can be corrected, the results are not immediate and in other instances, don’t occur at all.
Zillow estimates have some value in giving you a very ballpark estimate. However, the risk of getting an misguided home value is real. Be a smart homeowner and utilize all resources available when figuring out the true value of a home, including professional real estate agents and appraisers.
Above all else never look at a Zillow home value estimate as the true value of your home!
See more at https://realtytimes.com/advicefromtheexpert/item/1005435-zillow-estimates-accurate-or-inaccurate