Why Zillow’s Zestimate® is probably WRONG about your home value.
Love it or hate it, Zillow’s Zestimate® forever changed the game for homeowners when it launched in 2006.
Every morning, homeowners could wake up and hop online to see the value of their home.
What’s not to love?
Well, a couple things.
Homes were previously seen as a permanant space to live, establishing stability in a community, and perhaps a good long-term financial investment.
The Zestimate® flipped all that by offering a daily update on your home value - trigging brains like too much candy when values went up, and driving people into despair like a post-sugar rush crash when the value went down.
So, that’s probably not great.
Did anyone ever stop to ask, “Should I care about my home’s daily value?”
Or perhaps better yet, “Is it even accurate?”
Just this week, our team looked up a basic bungalow style home in an average Denver neighborhood and compared the Zestimate® with other popular online algorithm-driven tools.
Zillow - $514,000
Homebot - $542,199
Redfin - $478,000-$568,000
Opendoor Cash Offer - $413,000-$466,000
Oof.
And here’s the real kicker: none of these are accurate.
None know about the remodeled basement. The added covered backyard patio. The updated interior design elements.
Each of those online estimators were at least $50,000 below the current market value should the home be listed for sale.
So, enjoy the tools the internet offers. Get your Zestimate® fix with your morning coffee if you so choose, but PLEASE don’t make your real estate decisions based on those tools.
That’s why we’re here.
If you’re considering your options for selling, call us and arrange a confidential consultation. We’ll walk through your home with you. We’ll consider the customizations and updates you’ve done. We’ll look at the seasonality of the market, hyper-local data, economic conditions, and the many other factors necessary to consider when determining a home’s market value.
That’s the value we bring to the table as experienced real estate professionals, regardless of what shiny new toy the internet offers.
We're always here and happy to help. We hope this post serves you well!
- Josh & The RAGE Team
P.S. In Redfin and Zillow's own words:
"...the Redfin Estimate is just a starting point—it is not an appraisal or a substitute for the expert pricing advice of your real estate agent." - https://www.redfin.com/redfin-estimate
"...the Zestimate is a good starting point as well as a historical reference, but it should not be used for pricing a home." - https://www.zillow.com/zestimate/#acc
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This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for tax, legal, or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.
