Here’s what you need to know before trusting a Zestimate.
How accurate is your home’s Zestimate?
A long time ago, I did an investigation as to how accurate Zestimates are. It was so long ago that it took me five clicks to get from Zillow’s home page to their accuracy statement. I found that they were within 10% of the home’s actual value 50% of the time. That’s basically a mathematician’s way of saying they’re never right.
Why are they never right? First and foremost, Zillow has never seen your house. Just like a tax assessor, though, they have access to the MLS and tax records, and that’s what they base their home values on.
For this video, I decided to visit Zillow once more and calculate a Zestimate for a property my team and I listed and sold many years ago. This time it only took two clicks. Once you get to the page that gives you the Zestimate reveal, it also gives you the option to see how accurate Zillow is for on-the-market properties. An on-the-market property is one that’s currently listed with an agent, and Zillow adjusts their Zestimate to a property’s list price. Whatever it was last week doesn’t matter. Today you’ll only be able to find a Zestimate that’s equal to the list price.
As it turns out, agents are pretty good at listing houses, and most of their properties close within 2% of their Zestimate, which is really just the agent’s list price. So Zillow can claim that their Zestimates are within 2% of the sale price of on-the-market properties. If you dig a little deeper, though, you can see how accurate Zestimates are for off-market properties. In this regard, things haven’t changed much since 2004. In the Washington D.C. area, Zestimates only land, on average, within 9.8% of a home’s true value. If your home’s Zestimate is $400,000, your home could be worth $360,000 or $400,000.
An on-the-market property is one that’s currently listed with an agent, and Zillow adjusts their Zestimate to a property’s list price.
If you’d like to know what your home’s really worth, call a real estate agent (hopefully me!). We’ll come out to your home, look over the improvements you’ve made, compare it to other recently sold properties, and come up with an accurate valuation.
As always, if you have questions about this or any real estate topic, don’t hesitate to reach out to me. I’m here to help.