Life has thrown you a curveball, plans have changed, and you need to sell your home…fast.
You sit with your cell phone in hand and open your Zillow app, staring at the Zestimate in front of you. This amount represents more than just your house’s estimated worth, it symbolizes memories, hopes, and dreams.
Thoughts and questions zoom through your head like cars down a frenzied freeway. “Is this how much my home is really worth?” “Just how accurate is this Zestimate, anyway?”
While Zillow can be a good place to start, don’t be misled…You shouldn’t accept the estimate of any online real estate database at face value.
When considering Zillow home estimates, here are some truths to remember:
- Zillow’s database is not as accurate as you may think
- A Zestimate is not an appraisal
- Condition of the house isn’t accounted for
- Housing turnover rates are often disregarded
- Zillow’s algorithm is far from perfect
Reason #1: Zillow’s database is not as accurate as you may think
One of Zillow’s most popular features is the Zestimate, which is its estimation of a home’s market value.
Not to confuse with the current value of your property. The difference between the two is that, while the market value represents the price your property would typically sell for in the open market, the current value reflects so many factors that are not taken into consideration (such as the state of the property, and repairs and updates needed). When it comes to the value it gives your home, the more up-to-date data the algorithm has to work with, the more accurate the estimate is.
Zillow’s special system refreshes its collection of property values three times per week, using details from public and user-submitted data. However, while the site claims most Zestimates are “within 10 percent of the selling price of the home,” if any details are incorrect or missing (like the current condition of the home), this affects the Zestimate’s accuracy.
The company handles accuracy issues by stating value ranges for individual properties. One helpful hint is to look for Zestimates with smaller price ranges because this means Zillow’s estimates are better informed with more information about those properties.
Also, be sure to check out the high and low end of the price range. This will paint a clearer picture of your home’s potential value. More than likely a home that hasn’t recently (like in the last 1-3 years) been updated or renovated will be at the low end, or even below the low end, of the given range).
Reason #2: A Zestimate is not an appraisal
Although many people might think their Zestimate is the same as their actual home price, this just isn’t true. When it comes to getting an accurate estimate, current information is key!
Simply put, Zillow’s system is no substitute for an official appraisal or a Comparative Market Analysis (CMA). Professional home appraisers conduct an official appraisal of your property, considering things like the current condition of your house and whether significant updates have been made. However, this can be costly. A real estate agent can help you obtain a CMA, which compares prices of similar properties in the area that recently sold. Here at Simply we use a combination of Automated Valuation Models (virtual appraisers) along with real, human experts to establish a home's value - taking into account not just the property, but its current condition, repairs and updating that might be needed, and more, all to establish a valid “as-is'' current value.
Reason #3: Updates (or lack thereof) are not always accounted for
If your home is in need of some work but you need to sell your home quickly and do not have time for renovations, no need to stress!
Upgrades are not always as valuable as you might think, and they often will not make a difference in your home’s Zestimate. Unless a local property tax assessor is informed of the changes, Zillow may not be aware of any home renovations you have done.
When it comes to upgrades and pricing your home to sell, it is also important to consider the local housing market and the type of renovations you have done. If Zillow has not taken into account the fact that you gave your kitchen a makeover, do not just assume you can add on an extra $4,000 to the Zestimate you find online. In reality, most short-term updates (updating done immediately prior to selling the home) actually return less than they cost to do! This means you can lose money by updating the house.
Reason #4: Housing turnover rates
Are “For Sale” signs plentiful in your area? Good news! More data about comparable homes should be available on Zillow, which makes Zestimates more reliable.
This is why Zillow’s algorithm works better in some parts of the country than others. Hot market areas like Washington, D.C. or Miami, Florida will generally have more accurate Zestimates than in rural towns where residents live in their homes for decades and sales are rare.
Reason #5: Zillow’s algorithm is far from perfect
Zillow is transparent about the shortcomings of its Zestimates, and you can not expect other online real estate databases to deliver perfectly reliable estimates, either.
Homeowners thinking of listing should not consider a Zestimate the utmost authority when it comes to pricing. As mentioned before, a CMA from a local real estate agent or a professional home appraisal are more definitive ways to decide on your home’s value.
Do not make the mistake of taking Zestimates at face value
Pricing your home accurately is absolutely crucial. In fact, it is the number one reason homes linger on the market.
Although Zillow can be a useful tool, it should not be seen as a stand-alone method of determining your home’s value.
If you need to sell your house fast and for the highest price possible, but do not have the time or money to spend second-guessing Zestimates or hiring professional home appraisers, Simply is your solution. Just follow these five easy steps:
- Request an offer - Got 30 seconds? All it takes is your property address, and we can tell you if your home is the right fit for Simply.
- Speak with a Simply Advisor - Within 24 hours we will connect with you to chat about your situation and your property.
- Arrange a quick home visit - A Simply Local Expert will come see your home, photograph its condition, and ask a few questions.
- Review and approve your offer - You will receive our free offer with no strings attached… and we always strive to make it as fair and high as possible.
- Pack up and move on - Close and move on your schedule in as little as one week, or as long as 60 days.
At Simply, our database is frequently updated, and you can trust that our quotes are more accurate than Zillow. We are here for you, so skip the Zestimate stress and find out what your property is worth today!