How accurate is a Zestimate on my house? Zestimates are inaccurate. Yes, it’s true! The Zestimate on my house is wild! How accurate is a Zestimate for your home? Not very. For pricing real estate in Tampa Bay, there are better options! We get calls from homeowners that go like this… ” I just got a Zestimate on my house, and it seems wrong…”
What is a Zestimate?
It was a popular online real estate marketplace that used an algorithm to create a “Zestimate”. This was an estimate of home value on your house, for homes across the United States.
Zillow used a proprietary algorithm to analyze the data from public sources, and MLS listings. It’s important to note that these estimates can be inaccurate. In fact, their own data were as much as 20% off on accuracy either too high or too low.
On a home that Zillow estimated a value of 400,000, the ACTUAL value would be 80,000 more or less than that- that’s a HUGE RANGE!
Zillow discontinued Zestimates once it became a brokerage due to the credibility problem they faced, and it should still not be used as the sole factor for determining a home’s actual market value if you are buying or selling a home.
Zillow uses an Algorithm
Remember, Zillow’s an algorithm, it’s not meant to be an accurate determinant of a specific home’s value.
When you look at the value and wonder “how accurate is a Zestimate on my house, know that It doesn’t take into effect all the specific features of YOUR house or neighborhood. It doesn’t take you into effect whether or not you have added a pool. Your upgrades, if the condition is excellent or poor. That stuff is really, really important, right?
If any of those things are off: if the condition is off, if the location is off, if you live near a busy, busy street, if you live near a court and that’s a good thing. And all of those things affect the price.
As agents, we need to make accommodations. I got a Zestimate on my home and laughed! We make adjustments in the calculations- just like an appraiser does. So remember, Skill care, and diligence in these things are important when choosing an agent. Super, super important.
Real estate professionals like us caution people to use other resources when buying or selling a home. Consult with an experienced agent or talk to local appraisers. Always do your due diligence and ensure you have all the facts before making a major decision. So, how accurate is a Zestimate for pricing a home to sell? Not accurate enough! KNOW IT: How accurate is a zestimate on my house? it’s not! Let’s explore!
How Accurate is a Zestimate? An overview
Just how accurate is a Zestimate? It can vary widely depending on various factors, and it’s essential to understand the main limitations:
Data in Zestimates can be wrong
- Data Availability: Zillow only uses data, including public records, tax assessments, and previous sales data, to calculate Zestimates. The accuracy of Zestimates can be affected by the quality and availability of this data. In the real world, we know that buyer’s don’t buy a house on data alone- when was the last time you heard a buyer exclaim that they are excited about the data of their new home!
- Property Characteristics: Zestimates rely on available information about a property’s characteristics, such as its size, number of bedrooms and bathrooms, and other features. If this information is inaccurate or incomplete, it leads to an inaccurate Zestimate. This is common!
Neighborhoods and Property Conditions affect value.
- Local Market Dynamics: Real estate markets are truly very local! There’s a wide range of factors, including neighborhood desirability, school districts, and recent sales in the area that influence property values. Zestimates typically don’t capture these factors accurately.
- Property Condition: Zestimates do not consider the condition of a property, any recent renovations or improvements, or unique features that may affect its value. Inaccuracies, especially for properties that have been well-maintained or updated, are common. A home with a leaking roof and a pool leak can’t be allowed for in their data, yet we see such things every day.
A Hot or Cold Market affects sales prices rapidly
Market Changes: Real estate markets can be dynamic, and property values can change rapidly. Zestimates may not always reflect the most up-to-date market conditions.
Don’t settle for less than Accurate!
- Zestimate Range: Zillow provides a range for its Zestimate, indicating the confidence level in the estimate. A wider range suggests lower confidence, while a narrower range suggests higher confidence. Take a minute to look at this range when interpreting a Zestimate’s accuracy.
- Appraisal vs. Zestimate: Zestimates are not appraisals. They are automated estimates generated by an algorithm. At the same time, a professional appraisal involves an on-site inspection by a licensed appraiser. Appraisals and CMA’s researched by a great agent that knows the local market are far more accurate than Zestimates when determining a property’s value.
Zestimates aren’t particularly useful for estimating a property’s value, and I’d never suggest it be the sole valuation source if you’re buying or selling. With so many expenses to consider when moving to Tampa Bay and buying a home. Things like knowing the likely property tax you’ll be paying, homeowners insurance, the high average cost of living in Tampa Bay FL, and more, overpaying for a house based on a Zestimate shouldn’t be on your list.
OK, The Zestimate is wrong- now what?
When you need an accurate assessment of a property’s likely value for buying or selling, we’re here to help you in your unique situation. The accuracy of a zestimate on a house is not good enough.
As real estate agents, we determine the value of a home using several methods and factors. Here’s a simplified overview of how we typically assess a property’s likely sales price and value:
House considerations for Home Valuation:
- Comparative Market Analysis (CMA): This is one of the primary tools that real estate agents use to estimate a home’s value. We analyze recent sales of similar properties (comps) in the same neighborhood or area. These comps should be as similar as possible in terms of size, age, condition, and features. By comparing recent sale prices of these comparable properties, we can get an idea of the current market value.
- Property Inspection: We usually visit the property to assess its condition, features, and any upgrades or improvements. Things like the number of bedrooms and bathrooms, square footage, lot size, and the overall condition of the home. Sometimes then we find undesirable things that buyers don’t want, like the old avocado green or peach bathrooms! We also get to see desirable features that could affect the property’s value, such as a renovated kitchen, a pool, or a large backyard.
- Local Market Knowledge: As agents, we have a deep understanding of the local real estate market, and keep track of trends, such as whether property values are rising or falling in the area. Economic factors, school districts, proximity to amenities, and other local influences that can impact property values.
- Adjustments: After gathering information from comps and inspecting the property, we make adjustments to account for differences between the subject property and the comparable properties. For example, if the subject property has one more bathroom than the comps, we add value to the estimate. Conversely, if it has an outdated kitchen compared to the comps, we adjust for that too. You may have eagerly added SOLAR panels to the house, thinking it adds value, when in fact it MIGHT NOT, that can impact a sale and home value in unexpected ways!
Market Considerations affecting Home Value:
- Market Conditions: We study the current state of the real estate market. In a seller’s market with high demand and limited inventory, property values tend to rise. In a buyer’s market with more supply than demand, values may be more stable or even decrease.
- Client’s Goals: Your goals in all this matter! For example, a homeowner looking to sell quickly may price the home more competitively, while someone in no rush to sell may aim for a higher listing price.
- Feedback and Market Response: We focus also on feedback from potential buyers and market response. If a property isn’t receiving offers or is sitting on the market for an extended period, we’ll talk with you about the feedback and what your options are!
We’re here to help you get past the Zestimate!
No doubt you searched and asked “Zillow how much is my home worth” and now you’re not sure what’s next. Often people who call us start with… ” How accurate is a zestimate on my house- I just got a Zestimate on my house and it’s way off!…” Don’t panic, the Zestimate on MY house is wrong too! Hopefully you now know better the answer to “how accurate is a Zillow Zestimate on my house! We can connect you with a great local agent anywhere in the USA who can help you!! Just ask us! We work on real estate in Tampa Bay and throughout Florida.
Even new construction homes in Tampa are subject to the forces of the market, and value fluctuations, so never go alone there either- take YOUR AGENT to your very first trip to the models. Reach out to us! Either by phone or text at 727-408-6000, or use the contact form on the side of the page! If you’re looking for a qualified appraiser, ask your local agent, and you can also check the national resource above.
