Uncategorized March 21, 2024

Can you Believe the Zillow Estimate?

Zillow publishes an estimated value for homes.  Can you believe the Zillow estimate?  I say no.  Let me tell you why.

What Zillow Does Do

Zillow’s estimate is based on an algorithm.  It compares your home to similar homes in the area.  Zillow looks at items such as square footage, number of bedrooms, and number of bathrooms.  It looks for homes that have recently sold.  Sounds like it would give you a reasonable value and occasionally it does.

What Zillow Doesn’t Do

Zillow does not take into account that the updates that may or may not have been done.  2 identical homes located next to each other are not valued the same when one home has spent $100,000 updating the kitchen and baths while the other has simply maintained. There is no way for Zillow to know about the updates. The house with a screened in pool is worth more than one without.  I think most people would agree that a 3-car garage is worth more than a 2-car garage.  One of my favorite things that I have seen Zillow do when calculating a home value is comparing a home located on the bay to the similar house across the street that is not on the water.  Zillow does not take into account that even though a home recently sold – it was on the market for 2 years.  Another thing that is hard for Zillow to do is to consider how the current real estate market is in your area.  Are homes selling quickly, is there a lot of inventory, are there a lot of buyers looking?

Where Can You Get a Good Estimated Value of Your Home

Many websites (mine included) offer a value calculator.  These are no better than the Zillow estimate.  You could take a look at the most recent “Market Value” of your home in the county appraiser’s website.  This value is a ballpark and is typically lower than what your home would actually sell for.  The most accurate value will come from hiring an appraiser.  Of course this will cost you money.  The next best value will come from asking a real estate agent to perform a competitive market analysis (CMA).  A good real estate agent will do something similar to what an appraiser will do.  A lot of work goes into a CMA – I wrote a whole article on this.

So, can you believe a Zillow estimate?  Again, I say no.  However, if you’re going to look at it, scroll down to where Zillow shows “Comparable Homes” and at least look at which homes it thinks are comparable to yours.  If you would like a true estimate of your home’s value, Call Me!  850-974-0869