I can’t tell you how many times a homeowner has said to me, why is your estimate of my home so low? Zillow said my home is worth $50,000 more!
I am constantly disputing the accuracy of Zillow’s estimates with clients. In my opinion Zillow’s home estimates are often estimated too high. Many people I speak with think that if Zillow estimates are the end all to home market values. In some cases, these sellers have probably scared off buyers by overpricing their homes based on these estimates.
Zillow’s website states the following:
The Zestimate® home valuation model is Zillow’s estimate of a home’s market value. A Zestimate incorporates public, MLS and user-submitted data into Zillow’s proprietary formula, also taking into account home facts, location and market trends. It is not an appraisal and can’t be used in place of an appraisal.
Because Zillow’s estimates come from an automated system, it can’t take into consideration that the property has many upgrades that differentiate an average home to a renovated home. It also can not consider the intrinsic value of a given location in the city. Some neighborhoods just have more desirability than others.
As much as we have seen the rise of algorithms and artificial intelligence in the real estate industry, there still lies a problem in the inability of the platform to consistently provide proper home estimates.
When relying on automated home estimate programs, both buyers and sellers can face a serious risk of overestimates for market values. For instance, a buyer could use these estimates and decide not to even look in a certain area because they feel they can’t afford to live there.
In my experience Zillow home estimates have produced estimates that are sometimes far enough over the actual market value of the home the estimate is need for.
It is clear to me, and my opinion that the job and skillsets of a real estate agent are still needed to help sellers, and buyers determine the current home market values. Realtors provide better estimates than automated systems. Call your local realtor to get an idea of what you believe a home is worth.
By R. Jones
