Zestimate? Careful, It May Be More Like A Guesstimate...
One of the most popular websites in real estate is undoubtedly Zillow. But did you know that their home value “Zestimates” are often WAY off? 🤔🏡📈
#funfact - the CEO of Zillow just sold his own home in Seattle for 40% LESS than the Zestimate!
Per Inman News, “On February 29th, Spencer Rascoff sold a Seattle home for $1.05 million, 40PERCENT (emphasis added) less than the Zestimate of $1.75 million shown on its property page a day later.”
Sites like Zillow can be useful in our day when because as consumers we demand immediate information. In fact, our team has built a home profit website that uses some of the same data pulled by the "Zestimates" to create an estimated net sheet for those thinking about selling a home. The difference is, our team, the VanWinkle-Pisha Group, will review each submission and reach out to you to provide more accurate value to confirm the numbers so that you can be educated to make the best decision for your family.
If you're interested, you can grab a home profit report at YourWAHomeValue.com
Also, "Zestimates" provide endless fun on the Internet for Realtors and do we really want to ruin the fun? For example...
How the Automated Valuation Models work?
They have been known to price homes super high or super low. Zillow uses an automated valuation model (AVM) to create it’s Zestimates.
The AVM uses basic property characteristics, publicly available data, price trends and local market information to determine the value of homes. The AVM analyzes past comparable home sales and decides how much it thinks your home is worth.
So why are Zillow’s Washington State home value estimates often so inaccurate? The models don’t factor in property condition, improvements or other variables vital to determining a property’s value in the eyes of a buyer.
Zillow hasn’t seen inside the property. The AVM doesn’t know if the kitchen was recently renovated or if a major landscaping improvement, or large deck was added in the back yard. Zillow doesn't know about the mold in the basement or the hole in the roof. Obviously these things need to be accounted for.
Another issue with Zillow’s AVM is that it doesn’t distinguish between types of sales. It doesn’t recognize or account for short sales or foreclosures. These homes often sell for less than they are actually worth.
The AVM uses basic property characteristics such as square footage and number of bedrooms & bathrooms to find recent comparable house sales near your property. These types of sales can cause Zillow to value homes below their actual worth in Washington.
What Does This Really Mean?
Nationally, the Zestimate has a median error rate of 5%, which means half of the Zestimates in an area are closer than the error percentage and half are farther off. For example, in Seattle, Zestimates for half of the homes are within 4.9% of the selling price, and half are off by more than 4.9%.
💸💸💸 SO... with a median home price in Seattle proper of $624,000 - that is a discrepancy of $30,576. And HALF of homes are off by more than this. 💸💸💸
Please, call us, text us, email us, you may even be able to use a courier pigeon in some areas, but we promise we will respond and that we are capable of providing a far more accurate value for your home.