Everyone in the real estate industry knows Zillow. Zillow is the most popular on line real estate information site, with millions of us visiting it daily to find home listings and basic information on a particular property, such as square footage, number of bedrooms and baths, etc. Zillow will probably have a picture of the property as well, and might even have interior pictures.
I use Zillow every day – it’s a must in our business to get some idea of what this property looks like and it’s key features. It also can provide a brief “Price History” and “Tax History”.
One of the most controversial tools provided by Zillow is something called Zestimate. You plug in a property address and the site will give you a current Zestimate – or market value – of the property. Zillow uses a proprietary formula to determine its Zestimate value. This is an easy and convenient tool for all of us to use.
The problem – sometimes- is the relationship between that Zestimate and the actual sales price. Some sellers will use the Zestimate as their “number” to sell their home, no matter what their real estate broker may tell them about the reality of their neighborhood – i.e.- your home is worth less! If the seller remains stubborn, the broker may lose a deal.
I bring this up today because just maybe you are like me when you visit a website. I never learn about everything I could use on that site. I have certain things I am looking for, I get them, and I move on. But Zillow has an interesting tool that can provide a little more perspective to the Zestimate.
Next time you are on Zillow, on the Home Page scroll all the way down to the bottom. In small print you will see the word Zestimate. Click on it. Scroll down again until you see “How Accurate is the Zestimate?” Click on it. Move down to the “Zestimate Accuracy Table.” Look that over to get an understanding of error margins. Under the table you will see a sentence that says “click here to download an excel spreadsheet of this data.” You will now see a state by state, and county by county chart of “median Zestimates error margins.” So, if you have a house that Zestimate says is worth $200,000, and your county has a 15% error margin, that means the value estimate could be $30,000 off. It appears the more rural the property, or the less data Zillow has, the larger the margin error, some up in the 50-70% range. That would be a shocker for any potential seller relying on his Zestimate to convince a broker “this is my price.”
Zillow says their “median national error margin is 8%”, but as everyone tells me all the time, their market is “different”, “better”. Real estate is local! If like me, you did not know about this tool, check it out the next time you are on Zillow. You also may want to visit www.eppraisal.com or www.city-data.com. Then, once you get confused from the differing values, it’s time to call your local broker and let him/her own their money by telling you what your property is really worth.
These sites are a valuable starting point, no more, no less.
