Zestimates have been the cause of some serious Realtor-Seller conflicts, and for good reason…Few people understand them!
If you price your home below the Zestimate, you risk leaving thousands of dollars on the table. Price the home above Zestimate and buyers could perceive your home as overpriced, and keep searching.
As a Realtor, above all, I’m in the business of communicating; but secondly, I’m in the business of educating. By educating my clients about how their Zestimate is calculated, their uncertainty dissolves; it makes for an incredibly confident transaction.
I’m sharing 3 Need-to-Know Tips that will help you compare your home’s Zestimate to it’s true value.
- Zillow’s algorithm is heavily weighted towards local previous sales. This is great, right? We’ve all heard the overused mantra: “Location, location, location!”, but not so fast. Zillow’s algorithm does not take into account thoroughfares that divide neighborhoods. If your new home community is across the street from an older, smaller, lower priced community, your homes Zestimate will likely be adversely affected.
- Zillow’s accuracy diminishes because it can’t see the inside of your home, even if you just spent $400 on professional photography uploaded to yours truly. Zillow’s algorithm, by definition, is calculated using numbers as data points. Your Zestimate also doesn’t factor in your home’s upgrades (or lack thereof ). Having an unbiased opinion of your own homes’ condition is virtually impossible, but try to be honest when taking this into account.
- Value the Value Range! This is key. The Value Range shows the high and low estimated value of a home. (e.g. the Zestimate may be $545,598, but the Value Range may be $522,898 – $562,598) Think of it this way: The smaller the value range, the more information is available to calculate the Zestimate. A large value range means less information is available to Zillow, therefore they are less confident in the accuracy of their Zestimate. A large value range could also mean the local market is volatile.
With these 3 fundamental tips, you can zero-in on your home’s value in relation to it’s Zestimate. Of course, the most accurate number is going to come from an unbiased Realtor® who appraises property values daily, but this article will help you understand where Zillow is getting their number from.