Zillow has become probably the most widely used home searching tool in the United States. If you, like many of our clients have browsed Zillow, you may have seen, or even used their “Zestimate” tool. With a click of a button Zillow will give you a quick price analysis of your home. So many of our buyers or sellers come to us with preconceived notions about what their home is worth, or what a home they might want to buy is worth based on this fancy tool from Zillow.
The real question is, can you trust this tool for accuracy, and if so to what degree.
The simple and easy answer is no, you should not trust this tool. That is not to say it doesn’t have any benefits or uses, but the bottom line, it just doesn’t have enough information to make any sort of accurate assessment of a property. Zillow actually admits this in small print on another page somewhere on their website, saying “Zestimate is a good starting point as well as a historical reference, but it should not be used for pricing a home.”
And that really is a good way to say it. Some clients of ours recently sold their home for over 75,000 more than what the Zestimate stated it should be. We have another set of clients, where the Zestimate is 68,000 more than what they were able to get for the property. The Zestimate is not always this far off, but it is very rarely spot on.
Zestimate is an attempt at being a Kelley Blue Book for Houses. The problem is that, unlike cars, homes generally have very little uniformity. Even homes in the same neighborhood with the same floorplan can have whole different levels of upgrades that Zillow can’t see which can mean the difference between tens of thousands of dollars.
In related news, The Arizona Republic is actually setting up a locally charged website called Street Scout that aims to give consumers a better idea of value. Unlike Zillow or other online valuation tools, Streetscout.com will use local real estate experts and data. The site is yet in its infancy, but I already feel better about this tool than the Zestimate.
The best answer though, is to have a real estate professional to do a market analysis on your home. We do these free of charge for all of our clients, and not just if your planning to buy or sell. Often you’re simply curious to see the state of your assets and the current value of your home is a big part of that. We are happy to help.