Why is Zillow not a good indicator of your home’s value? Quite simply, their own website says they are not accurate. The chart above depicts Zillow’s accuracy for counties in Massachusetts, and was taken direct from the website. To find it, click on “zestimates” on the bottom of the home page. This will take you to a page which explains the accuracy (or inaccuracy) of their computer generated valutations. At the bottom of the zestimates page you will find a chart where you can search by state.
If you were interviewing a real estate agent to sell your property and they told you that 38% of the time their listings sell within 5% of the asking price and 86% of the time they sell with 20% of the asking price would you hire that agent? Of course not, that’s why you should always contact a local professional to determine your property’s value.
Why are Zestimates inaccurate? The answer is they rely only on unverified public resources which are often incorrect or not up to date. When was the last time someone from the Assessor’s office viewed your property? Assessor’s data is often incorrect or not up to date. In my 10+ years of experience I have seen Assessor’s data be off by over 500 square feet on the size of a home. That can have a significant impact on the value of a property. I’ve also seen incorrect bedroom and bathroom counts. Assessors simply don’t have the time to inspect every property in a community to make sure their data is up to date. Unless you have pulled a permit, there is a good chance the Assessor has no idea about a recent renovation you have done. Since automated computer valuation tools such as Zestimates rely heavily on this type of data, this leads to inaccurate valuation conclusions.
A local appraiser, (or a well trained Agent completing a CMA) will thoroughly go through your home to gain knowledge on its quality, condition, and features and compare your property to recent sales of similar properties in the neighborhood. This includes verifying details about these properties by interviewing agents that represented both the buyer and seller. Another reason computer generated values are inaccurate is they don’t verify the sale price, they simply look at the price on the deed. The price on the deed indicates the price on the contract, but does not take into account any concessions by the seller. I f the sale price was $300,000 but the seller gave the buyer $10,000 back at closing, the net sale price was $290,000. If concessions are not common in the market, the net price should be used not the gross price. Programs like Zestimates do not take this into account.
While sites like Zillow are a great place to look at for current listings and home improvement ideas, they are not a good place to accurately determine your property’s value. If you need an accurate valuation of your property, contact me today!