A lot of people ask whether the home value they find on Zillow, also known as a Zestimate, is accurate. Can you really trust that Zestimate?
Zestimates work almost the same way as a tax assessment: Zillow’s algorithm takes the sale prices of homes that are similar to yours and in the same area, then it compares that information to your property’s square footage in order to come up with an estimate on the value of your property.
Unfortunately, the reality is that, although they can be accurate sometimes, Zestimates are often incorrect. On average, the Zestimate has a margin of error of about 20%.
There are three factors that impact the accuracy (or inaccuracy) of your Zestimate:
- Your property’s location. If you live in a cookie-cutter subdivision that has a lot of like-kind houses and a high number of recent sales, then it’s highly likely that your Zestimate will be more reflective of the accurate value of your home. However, if your property is in a very unique area or if you have a rural property with a lot of unique features, then it’s less likely that the Zestimate will be accurate.
- Your property’s condition. If you made a lot of recent updates, the homes around you are not similar, or if your home has unique features such as a finished basement, a Zestimate will probably not factor those features into its calculation.
- Your property’s location in relation to recent sales. For example, you may live in that cookie-cutter subdivision, but if you live on the edge, then the algorithm will take properties outside of the subdivision into consideration when calculating your Zestimate. Those properties might just be a block away but if they are completely different than yours, that will definitely throw off your Zestimate. If you live in a subdivision where all the homes are bigger than yours or sit on a larger lot, then your Zestimate will also be incorrect.
Your Zestimate really depends on those three factors in your local real estate market.
If you would like a more customized and accurate home value estimate, give us a call. This spring, we are offering a free, no obligation, maximum home valuation. Our representatives will go through your home, give you a detailed estimate of value, and provide a list of suggestions that you can use to maximize your home’s value. In other words, we will give you a list of things that will get you a good return on investment and increase your overall sales price.
If you have any questions, please don’t hesitate to reach out to us. We would be happy to help you!