Wednesday, December 13, 2017 / by Josh Cooley
Are Zestimates a Reliable Way to Determine Home Value?
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Recently, I got an email from a client containing a few questions about home valuations and, specifically, about the Zillow Zestimate.
The client’s first question was: What is a Zestimate?
To answer that question, a Zestimate is not an estimate, it isn’t an appraisal, and it isn’t even an accurate home valuation. It’s simply a number the website assigned to your home based on your home’s size, zip code, and other metrics that may or may not matter.
This client also asked: On average, how far off is Zillow in determining value?
While sometimes the Zestimate can be accurate, most of the time it is off by about 20%. Whether or not you should use the Zestimate depends on whether you’re simply looking at the tool for fun or if you’re serious about understanding a home’s value.
The next question was: What are a few ways that Zestimates could affect a real estate transaction?
Zestimates can actually mislead sellers and buyers about the value of a home. If an appraiser doesn’t agree with the value the Zestimate has led you to think a home is worth, the process of obtaining a loan may become difficult.
If you’re looking to sell, the best way to correctly price your home is by considering factors like location, condition, and recent sales in your area. The best way to determine your home’s value is to work with an agent.
If you have any other questions or would like more information, feel free to give me a call or send me an email. I look forward to hearing from you soon.