Most in the Real Estate industry are familiar with the Zillow Zestimate.Â Most non-Real Estate people are familiar with Zillow and their infamous Zestimate as well.Â How valuable is this resource? I will tell you as a numbers centric Real Estate professional, it is a great place to get a VERY quick glance at value.Â But a more thorough Market Analysis prepared by an experienced licensee is still the best path to a more accurate value. That or pay an appraiser.Â
Why is this?Â Because Zillow's Zestimate does not account for finishes, proximity to desirable or undesirable neighborhood features (think railroad tracks, a liquor store, a park, etc).Â My biggest gripe is that Zesimates can't account for proximity to major neighborhood boundaries.Â The Zestimate often crosses over these major boundaries and grabs sales comps that are much higher or lower than the subject you are trying to assess.
Guess what?Â Zillow discloses their Zestimate Accuracy.Â Here is the link to the page and the excerpt for my market (Denver, CO):
Denver Homes on Zillow: 99%
Denver Homes with Zestimates: 99%
Denver Zestimates within 5% of Actual Sales Price: 26%
Denver Zestimates within 10% of Actual Sales Price: 46%
Denver Zestimates within 20% of Actual Sales Price: 68%
Look at that last statistic.Â 32% of Denver Zestimates are NOT within 20% of actual Sales value.Â The Average Sales Price in Denver is almost $300,000.Â 20% is $60,000.Â Â 1 in 3 Zestimates is off $60,000 or more.