As Zillow.com has gained popular, so have Zestimate home values…and inquiries about it.
What is a Zestimate?
A Zestimate is a computer-generated estimate of a home’s market value. Computed using Zillow’s proprietary formula, it incorporates data about a home based on physical attributes, tax assessments, prior sale prices, market activity, recent sales nearby, and even owner-submitted data on the Zillow website.
According to Jay Thompson, Zillow’s Director of Industry Outreach, “We can only provide an estimate of the home value based on available data because we cannot inspect every home alongside an appraiser or homeowner. Similarly, Corelogic states, “Automated valuation models are based on mathematical assumptions and are not able to consider special factors that may make your home more valuable. Do you live on a lake? Did you refurbish your kitchen? Use this valuation estimate only as a starting point.”
Are Zestimates accurate?
Zestimates currently have a national median error of 8.7%. Before deciding a Zestimate portrays accurate home value, it’s important to consult your local Realtor expert and even enlist the help of a local appraiser.
In reality, pricing algorithms actually generate a range of prices rather than a specific sales price. In the case of Zillow, their “sampling error” is about +7.5 percent. This means that on a $300,000 property the price has a 95 percent probability of being between $277,500 and $322,500 – a $45,000 range! In comparison, most competent agents can predict the price within $5,000-$10,000.
Hampton Roads Real-e-statement is written by Alyssa Godwin, a Realtor with Liz Moore and Associates. For questions regarding Zestimates contact Alyssa at 757-329-6161 or firstname.lastname@example.org. You can also find Alyssa on Facebook or on the web at www.lizmoore.com/alyssagodwin.