One of the questions that real estate agents often get from consumers is “How accurate are Zillow home value estimates? ”
Sites like Zillow have great potential to inform buyers. These property search engines have tons of useful information. In addition to photos and details of a home for sale, they can research schools, recent sales, and the property history. They also provide estimates on home value, which Zillow calls “Zestimates”.
To do this, Zillow uses a proprietary formula based on data the website has obtained from public records and information entered by users.
Zillow may do its best to give you an accurate price of what a home is worth. The site knows what the home sold for the last time it was purchased, and it knows this same information for comparable homes. Along with data about features supplied by homeowners , Zillow comes up with a estimate of what the home is worth. The problem is these estimates can be wildly off, leaving the buyer or seller with poor information to base an important decision on.
There are a number of reasons AVM’s ( Automated Valuuation Models) are inaccurate. Geographically, the data Zillow uses is much broader than a neighborhood or town. At times they use extrapolated County data…and in Bucks and Hunterdon Counties that would be a wild range of value. Another misfire is their consideration of municipal appraisals, which are not predictive of value, especially in PA. Most importantly, we must acknowledge that an automated system cannot think for itself. No algorithm, no matter how many metric points support it, can know that the kitchen cabinetry is dated or the yard backs to open space.
As real estate agents, one of our most important and challenging tasks is the pricing of a home. Market pressures change from week to week and from neighborhood to neighborhood. Knowledge of the condition of comparable sales is crucial, and Zillow does not know that the sale price of the home down the street was impacted by aged systems, mold in the basement, or a new roof The motivation of the parties is always a factor, as are the terms of the deal…all cash? As-is? Accommodating close? This knowledge is what enables an experienced real estate professional to compute a realistic anticipated sale price. If you are considering selling and want a REAL valuation of your home, please call River Valley owner Kim Ward Bacso to discuss your real estate needs. My direct dial is 908-616-2767, and I will personally make sure that you are matched with a River Valley agent who knows your area the best.