A “Zestimate” is an estimated market value for a home, generated by Zillow’s proprietary algorithm.
It uses public and user-submitted data to provide an estimated value for over 100 million homes in the US. Some of data considered includes
- square feet
- # of BRs and baths
- location
- market conditions
- recent sale prices of comparable properties
Look, I know you’ve looked up your home’s Zestimate on Zillow. I’ve done it myself on my own home. But is it accurate? Many times the answer is “no” and I have some proof.
Before I present a market analysis to a prospective seller, I always look at the Zestimate and I take a screenshot. I do this for 2 reasons. First, it tells me what the seller is probably expecting in terms of price and secondly, I compare it to my analysis and what it ultimately sells for. it is interesting to see how it compares with my market analysis.
I recently presented a market analysis for a small house in a town in NW Bergen County. The Zestimate is $651,000. The seller received price recommendations from 3 experienced and local Realtors that ranged from $499,000-$550,000. That is a $100k difference!
Zillow’s algorithm doesn’t know about the homes condition, updates, and other factors like busy roads, easements or desirability of a certain neighborhood. Zillow acknowledges these limitations but many sellers might not be aware of inaccuracies when it comes to Zestimates.
So take Zestimates with a grain of salt. Use as a starting point but if you want an accurate assessment of your home’s worth in todays market, a qualified and experienced Realtor such as myself, can provide that information.