Does Zillow’s Zestimates Give Accurate Home Market Values?

Zillow.com has become a media darling. In case you don’t know, Zillow.com is where you can get the company’s take on how much your house and millions of others across the country are worth, and has become one of top time wasters of homeowners. Here’s how it works: you go to zillow.com, type in an address, and the nice thing is, as soon as you type it in, it gives you an aerial picture of the house. It tells you what Zillow believes this house is worth.That would be the “zestimate.” And not too long ago, zestimates were the talk of cocktail parties everywhere. People started zillowing neighbors, bosses, celebrities. Even CNN got hooked, publishing zestimates of celebrities in their popular Fortune Magazine. And Investors have been hooked as well, investing over $50 million in venture capital.

But at the end of the day, does Zillow’s zestimates provide accurate information on the value of your home or the home you wish to buy?

The answer: not in Texas. And amazingly enough, Zillow agrees. Take a look at Zillow’s own accuracy information of their zestimates of some Texas counties, including Bexar and Comal county:

In Bexar county, only 27% of Zillow’s zestimates are within 5% of the homes value! Even worse, only 76% are within 20% of the home’s value.

Now think about this, if you are selling your home, and you use Zillow to determine your home’s value you, the odds are that you will be off by as much as 20%. On a $200,000 home that equates to $40,000 that you could overprice your home where it will never sell, or you undervalue your home and lose the equity that you you have built up over the years.

As a homebuyer, if you use zestimates to determine the offer you wish to make, you could be overpaying for a home.

The bottom line: while zestimates are fun for zillowing your boss’s home, it is not a tool that you should be using to determine the sales price of you home, or the offer you should make on a home you wish to buy. There is only way to do that, and that is to use a real estate professional that has access to local, property specific, and comparable home information. Greg Swan, a top real estate professional in Arizona, has done a great job of showing just how out of touch Zillow is with reality at his blog.

And if you don’t believe us, listen to Zillow’s own Sara Bonert, who wrote in her blog, “ At the end of the day, the consumer still needs a professional to help determine an asking price that is JUST RIGHT! “

If you are thinking of selling your home, and want an accurate value of your home, just fill out our Home Value Request page and we will send you a free CMA (Comparitive Market Analysis).