Why Zillow’s Zestimate Is Not Always Accurate

The power of the internet has been one of the chief drivers of real estate markets. It has empowered the homebuyers like never before. Zillow’s Zestimate, which is an online price calculating tool that gives an estimate of market value of over 100 million homes in the US, has been a path-breaking initiative in empowering homebuyers and sellers. But if you are planning to sell your house, you should rather be wary of zestimates and other websites that provide value estimation of homes. Their estimates are often found to be far off the market price. And guided by Zestimate, if you anchor your hopes on a higher price, it is hard to accept a lower price even if that may be the actual market price of the property. Your property may remain unsold and may not command the actual market price if tried to be sold at a lower price down the road because the initial appeal of the sale has faded away. Here are some of the reasons why Zillow’s Zestimate is not always accurate:      

1. Getting accurate pricing is tough  

It is always difficult to arrive at the right price of a home or property because it can easily vary from home to home, neighborhood to neighborhood and location to location. If the zestimate is even 20% over the actual market price, the possibility of getting your house sold is less because you may list too high, scaring off potential buyers and wasting your precious time.

2. AVM cannot provide accurate valuation     

No automated valuation model (AVM) can predict the value of a home just because there are simply too many factors guiding the property prices that make it impossible for any AVM to provide an accurate estimate of the market value of homes. For example, how would AVM know that you recently remodeled your kitchen or bathroom? Or, how will it take into account the distress factor associated with a particular property that can drive the price down?      

3. Not appraisal but estimate     

Even Zillow agrees that the Zestimate is not a price appraisal of property but an estimate which can be the starting point in price negotiations. Based on the data fed, it is a computer-generated valuation of your house, not a value and price assessment by a professional surveyor. Sometimes, data may be incomplete or wrong and that can drastically alter the valuation in AVM.    

4. Online pitfalls    

Another big reason why Zestimate valuations are not always right is the tendency among websites to copy relevant data from just any source and presenting it as fresh data with minor random changes. Now, if this is repeated by thousands of competing websites, the actual data would be lost much before it lands to the third parties who would use it for AVM. Zestimate data come from a diverse range of sources, some of which could be reliable and trustworthy but even if a fraction of the data is contaminated, it can produce a drastically altered result. And, that’s precisely what often makes Zillow’s Zestimate not always accurate.     

Contact us for complete help    

Are you currently wondering what your house is worth?  Rather than trying to do your own research, reach out to our team at JAM Properties and we will go through with you step-by-step what your house is worth, all for free.  While we are not appraisers personally, we are home buying specialists in the Orange County, CA area with years of experience and a wide network of resources.  Not only are we able to tell you what your home is worth, but we are also able to buy your home directly from you if you are interested in selling.  Many people find out the value of their home with the intent to sell.  We make that process smoother and easier by offering to buy the home for the value we have determined.  Whether you are looking to sell or are just curious what your house is worth, there are never any obligations with JAM Properties, just the honest truth.  Call us today and find out what your home is worth: 949-438-4343.