Zillow, Zillow, Zillow
The name Zillow may be a play on the word “zillions,” relating to the zillions of data points used to develop the Zestimate. Zillow also rhymes with pillow and triggers the emotions attached to homeownership.
Did you know that the term Zillow is searched on the internet more often than the term ‘Real Estate’? When I heard that, that was a surprise to me. Although after talking with and hearing from many clients, it is obvious to me why so many people are interested in visiting Zillow’s website: to find out their home value.
In the United States, most family’s biggest asset is their primary residence. However, if you bought your home many years prior, and you do not pay attention to the local real estate market, how are you supposed to find the value of your home? One option is to contact a real estate agent but if you are not actively buying or selling the real estate agent might not want to help.
When you visit Zillow’s website they have a home valuation tool called a ‘Zestimate’. From their website, this is how they describe a Zestimate: “The Zestimate home valuation model is Zillow’s estimate of a home’s market value…It is not an appraisal and it should be used as a starting point.”
The Zestimate feature is a fun tool to play around with but the real question is, is the information accurate. First, realize it is only a tool and do not construe any information on their website as facts or negotiating tools. Do not get hung up on the listed value of a home because depending on many factors the Zestimate has been off more than 20% of the sale price on some homes. Plus, with today’s real estate price surge, the information on their website might be out of date.
Zillow encourages buyers, sellers and homeowners to use the Zestimates as a place to start. Other suggested research includes comparative market analysis (“comps”) run by real estate agents, on-site visits, or a professional appraisal.
Some real estate professionals discourage reliance on Zestimates because they frequently don’t include home upgrades and improvements; nor do they adjust for mistakes in property taxes and assessments, and oftentimes create unrealistic expectations for both buyers and sellers.
Also, be aware that not all homes have Zestimates. Per Zillow, that’s either because the home is located in a non-disclosure state where transactions are not publicly reported (Idaho, Indiana, Kansas, Louisiana, Mississippi, New Mexico, Texas, Utah and Wyoming) or Zillow has insufficient transactional data from the county so as to calculate a Zestimate.
If you are in the process of selling your home and you see that the Zestimate of your address seems to be too low and you are worried that potential buyers might see the inaccurate information, there are ways to fix it. You can go to Zillow’s website and update your home facts. There you can fix any incorrect or incomplete information. You are also able to add information about the architectural style, roof type, heat source, and building amenities. And remember, Zillow uses an algorithm that only works well if all pertinent information is entered correctly. In other words, garbage in, garbage out. There are a zillion ways to be wrong.
In conclusion, I would not get too wrapped up in the ‘Zestimate’ value of your home. The information can be a fun tool to play with and give you a general idea of what the property is worth, however, if you are negotiating to buy or sell a home a ‘Zestimate’ will not help you out. Remember, If you want a true market appraisal of your home, you can hire an appraiser or local real estate agent who uses the most up-to-date comparables.