According to Web metrics firm Experian Hitwise, in July 2012, Zillow.com was the top-ranked real estate search website, so I’m guessing if you own a home, are thinking about buying a home, are thinking about selling your home, or just love real estate, you’ve probably visited the site once or twice. That means you’ve probably heard of the Zillow Zestimate.
According to Zillow.com: “The Zestimate (pronounced ZEST-ti-met, rhymes with estimate) home valuation is Zillow’s estimated market value, computed using a proprietary formula. It is not an appraisal. It is a starting point in determining a home’s value.”
Even Zillow itself admits that the metrics they use to calculate Zestimates is not always accurate. Keep that in mind when you are looking at the Zestimate for your own home or when looking at the homes for sale in the surrounding neighborhoods. But also remember that Zillow’s Zestimates can come in very handy – just be sure that the property information on matches the home’s listing sheet in the MLS to be sure all the details are correct.
The information about the home may not be correct, which may affect its Zestimate. Zillow pulls information about each individual home from public records and data. Some of the information may be incorrect or out of date. For example, if the owner has built an addition on the home, that extra square footage may not be reflected on Zillow.
The features of the home may not be updated. Most public records (tax records, appraisals, etc.) do not list cosmetic improvements and upgrades, like hardwood floors, stainless steel appliances, etc. When you view the home in person, you may notice features and upgrades that are present in the home but not up-to-date on Zillow. Make note of those items when considering the accuracy of the Zestimate.
The seller/homeowner and listing agent can edit the home’s information. Just like a listing in the MLS, Zillow entries are subject to human error. A mistake in the data – whether intentional or not – can affect the Zestimate, putting the home at an advantage (or disadvantage). Further proof that it is always a good idea to (a) see any home you are considering purchasing in person to notate the features, upgrades, and details for yourself, (b) ask your REALTOR® to do a Comparative Market Analysis on any home you are considering, in order to get a better idea of what the home should sell for based on recent comparable sales and other pertinent data, and (c) when in doubt, consult a real estate appraiser, who can complete a Market Value Appraisal for you and help you decide if the price you’re willing to pay is a realistic one.
If you are a HOMEOWNER, you can correct the information and add additional details about your home by claiming it on Zillow.
If you are a BUYER and you are using Zillow to look for available homes, keep in mind that some of the homes that show on Zillow as being available may actually already be sold. Consult with your REALTOR® about the availability of homes that you find on Zillow and to help you schedule a private showing of homes you are interested in.