If you're considering buying or selling a home, I'm sure you've probably
looked at various real estate sites to see how much homes are valued
for.Â As a real estate professional, I get clients that ask
me about these home value estimates all the time.Â Some of them have
almost decided not to buy or sell a home, because they trusted these
estimated to be accurate, and they got the impression they could not
meet their selling or purchasing goals.
So, I decided to due my
homework and see just how accurate these estimates are.Â I went to the
most well known site for home value estimates...Zillow.Â Their
"Zestimates," as they're called, provide home value estimates of any
home, whether they're for sale or not.Â Zillow states that this is not
to be construed as an appraisal, but an opinion of value.
issue is, these values are derived from county tax values, last sales
price, surrounding homes in different communities and school districts.Â
It may also use homes that while close in proximity, are of varying
quality, size, condition, age, and/or distressed (foreclosure or short
sale).Â The homes could be in a better or worse location as well (train
tracks, near highway, on a main road, etc).
I attached a screen shot from Zillow's website that discloses the accuracy of their "Zestimates," which can be viewed at the following link as well.Â ZESTIMATE ACCURACY
Being a Realtor in the Cleveland and Northeast Ohio area, I'll ask you to draw your attention to the Cleveland OH statistics. As you can see, the "Zestimates" are only 35.9% accurate within 5% of the true value, 63.7% within 10% of true value and 83.7% accurate within 20% of true value.Â If an agent had accuracy numbers like these, he/she wouldn't be a very successful Realtor.
To put this in perspective, if a seller owned a $250,000 home, the differences at these 5-20% levels of accuracy could range from $12,500-$50,000!Â If the seller's home is one of the 16.3% that weren't even accurate within 20%, this number could be even higher.
point is, as I explain to all of my clients, using the internet to
obtain real estate knowledge can be a great thing, but can also be
misleading or incorrect.Â Knowing the source of your information is very
important, and it's the reason I wrote this article.Â Specific to this
topic, nothing replaces the valuation of a local real estate agent.Â And
when choosing a Realtor, be sure to interview more than one to make
sure you're choosing a knowledgeable agent that will successfully guide
you through your transaction.