Often misunderstood by the public: What is a Zillow Zestimate and Is It Accurate?
Zillow is a great real estate tool and used by many who are researching real estate.
92% of people who are looking to buy or sell a home or rent start online before reaching out to a Realtor®, so getting accurate info online to make good decisions is key.
The #1 used tool used by buyers, sellers and renters is Zillow.
A tool Zillow has to determine home values and rental rates is a Zestimate. The Zestimate is often misunderstood by people.
What is a Zestimate? (taken straight from Zillow which you can find at the bottom footer of the Zillow site)
The Zestimate® home valuation is Zillow’s estimated market value, computed using a proprietary formula. It is not an appraisal. It is a starting point in determining a home’s value. The Zestimate is calculated from public and user submitted data; your real estate agent or appraiser physically inspects the home and takes special features, location, and market conditions into account. We encourage buyers, sellers, and homeowners to supplement Zillow’s information by doing other research such as:
- Getting a comparative market analysis (CMA) from a real estate agent
- Getting an appraisal from a professional appraiser
- Visiting the house (whenever possible)
Zillow also produces a Zestimate forecast, which is Zillow’s prediction of a home’s Zestimate one year from now, based on current home and market information. Learn more about the Zestimate forecast.
Zillow also provides a Rent Zestimate estimated monthly rental price. Learn more about the Rent Zestimate.
Although the Zestimate is great for getting an idea of value it is not always accurate. If the data submitted to Zillow is not accurate it impacts the Zestimate.
As of the post, 85.7% of Zillow Zestimates in Pima County Arizona range from 20% on the high or low side of the actual market value. Only 43.5% of homes are within 5% of the Zillow Zestimate sales price.
Read on… as to how you can get a more accurate value of a home.
So as you can see the Zestimate does have a margin of error.
As Zillow states doing other research will help to get a more accurate value of a home or rental rate. A comparative market value analysis (CMA) from a real estate agent is a more accurate way to determine value. This data is straight from the multiple listing service (MLS) which are actual values of homes listed and sold. Agents often express values based on the average dollar per square foot (Avg$/sqft) and days on market (DOM).
The most accurate info is to get a CMA from an agent and look at the closed sales of similar properties in your area. Get the Avg$/sqft and times it by your homes square feet to get an accurate value.
The key to an accurate value is similar properties. So you have to take into consideration: condition, size, bedrooms and baths, pool, car space, location, lot size, views, etc.
If you want a detailed CMA give contact us today. We would love to help!
