Are Zillow Zestimates Accurate?
If you’ve used the Internet to look for a home in the past few years, you undoubtedly landed on Zillow at some point. Zillow has become one of the most popular tools for home buyers and sellers. But, are Zillow Zestimates accurate? We explain how the Zillow Zestimate is calculated and give some cautionary tales as well. Our video below hits on some of the main points, so be sure to check it out.
First of all, with how much houses are selling for in Philadelphia and New Jersey, you want to make sure that you get the most accurate estimate for your property. As a seller, you are looking to maximize your selling price without scaring off potential buyers. As a buyer, it is essential that you aren’t overpaying for your new home. So, as you can see, it is crucial to value the property as accurately as possible.
Another issue that arises is when a seller sees an inflated Zestimate for their property and takes it as accurate. Imagine a realtor or appraiser telling you that your property is worth $50,000 less than what Zillow estimated. It could make for some pretty devastating circumstances if you put your full trust into these estimates without getting a true value for your home.
How is the Zillow Zestimate Calculated?
The Zillow Zestimate is basically an estimate calculated based on home sales data in your area. So, the Zestimate accuracy can vary due to the fact that some areas have much more data available than others. Furthermore, the Zestimate is calculated from publicly available data and looks at similar homes in your area. Tax records, prior sales, and square footage are some of the metrics used.
Anyone who has owned a home before will immediately see why the Zestimate should not be used for anything more than a “rough idea” of a home’s value. On a single street with similar style homes, you could easily have price differences of nearly $100,000. On the low end of the spectrum, you may have a house that has never been upgraded, repaired, or modernized. Meanwhile, the most expensive house on the street may boast interior and exterior renovations, high efficiency heating and cooling equipment, a finished basement, or any other number of upgrades.
Other Issues with Zestimate
As you can see, even two houses with a similar size, located near each other, could vary greatly in price. Zillow uses publicly available data, which can take some time to update. As you saw in our video, a property that had been completely demolished was still listed on Zillow. Additionally, the house was listed with a range with an almost $100,000 difference between the low and high values. Obviously, a range this large is not accurate enough to be helpful to anyone.
At the end of the day, it is hard to predict just how accurate the Zestimate represents your home’s value. It may be accurate for some, but should not be used for more than a general idea of your home’s value. For a true estimate of a cash value for your home, you can call us at 215-770-3122 or send us a message. We will get back to you with a fair cash value for your Philadelphia or New Jersey home. No obligation, no charge.