Home Buying in 11790>Question Details

joe, Home Seller in New York, NY

Is the zillow house estimate a good indicator of what a house should sell for or what it would be appraised?

Asked by joe, New York, NY Fri Jul 11, 2008

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Tandj’s answer
I appreciate the professionals insisting that Zillow is not an accurate instrument. The problem is that not all buyers realize this and in spite of what realtors say, use Zillow on face value.

Zillow has no business estimating homes they have not looked at because it is impossible to estimate accurately and fairly.

I have a problem with Zillow putting their 2 cents in-in the first place. When I contract with a Realtor and my home goes into MLS, I want it on Realtor.com-not some affiliated web site that is going to sabotage a potential real estate deal.

Again, remember that the superior inside knowledge that you professionals have is NOT the same as the knowledge base of the average buyer or seller who looks at these sites objectively and takes the info at face value.
0 votes Thank Flag Link Thu Nov 3, 2011
Zillow is dead on the money for sold properties...every sale that I have closed is recorded correctly to the penny.When you are asking about a Zestimate..that's a whole different story...They can be off the mark. For the most part,it is a great website!
1 vote Thank Flag Link Tue Jul 22, 2008
Well as you can see there are already several professional opinions here and they all match mine. If you want a real valuation of your house get a professional appraisal. Second best is to have a real estate agent pull comparables and give you a value. I would never suggest to any client or potential client to use a computer based program without any real human input to get a home value estimate.
If you use one of those programs you could end up selling for way below the real market value, listing the house for a price that won't sell, or you might just nail it and get the right value.
Risky Business!
1 vote Thank Flag Link Fri Jul 11, 2008
Zillow is a great starting point, as it does offer comparables of other properties in the area...however, it has been my experience that their suggested sales prices are usually off substantially. Since they have no clue what improvements have been made to the home, neighborhood or area I would not recommend using it as your indicator. A Real Estate Professional is going to be your best bet...and our services won't cost you a penny!
1 vote Thank Flag Link Fri Jul 11, 2008
As a real estate agent in the Florida market, I use Zillow to get my listings out to the public. I find that Zillow is for the most part inaccurate because it is strictly numbers. Zillow is unaware of the condition of the home, the custom features of the home and only values the property based on what sold around subject property which could be many foreclosed properties,obviously bringing the value down. The best and accurate market value is contacting a real estate professional that is in the market on a full time continuous basis and knows that particular market; especially in these changing times
1 vote Thank Flag Link Fri Jul 11, 2008
you are tearing off a scab with this question. the issue of Zillow is a hot one in this industry.

i was excited when i learned about Zillow...think about it, free and easy and without bias, you can look stuff up in the middle of the night in your jammies and never have to speak to a realtor... but the reality has been disappointing.

I've see them NAIL values and just a few days later and three blocks away miss by a mile. I mean NOT EVEN CLOSE. i've seen them miss by $100k both high and low on $900k.

we have a brewing storm now with Realtor dot com who will be trotting out a valuation tool on that site...i suspect it will be equally hit or miss.

that said it's fun and not a complete waste of time.
1 vote Thank Flag Link Fri Jul 11, 2008
0 votes Thank Flag Link Mon Aug 27, 2012
tandj, you are granting far more importance to zillow than is appropriate. they are an amusing toy and a fun way to diddle around but the industry does not use it except in rare instances.

your example illustrates the weakness of their model...NO HUMAN HANDS. the issue of duplication is a new one for me...maybe the good folks at zillow will share the secrets of their valuation model as it pertains to this instance. i assure you they monitor the traffic to track their references.
0 votes Thank Flag Link Thu Nov 3, 2011
Zillow for me is good only as a search engine. Zestimate...now is way off the mark. I think for the most part I would use mls/mris to be on the safe side, which pulls from our realtor database.
0 votes Thank Flag Link Thu Nov 3, 2011
Can someone give me a reason why Zillow has 2 different estimates for the same property when an ad is duplicated? Example:

220 9th St , Beach Haven, NJ
House For Sale:$778,900
Zestimate®: $594,000
Mortgage: $3,635/mo

220 9th St, Beach Haven, NJ
House For Sale:$778,900
Zestimate®: $700,000
Mortgage: $3,635/mo

And can someone explain why 2 houses for sale practiacally next door to each other, same exact model, built at the same time, with the exact same layout, bulding materials, upgrades, etc. have 2 different estimates- one is $21,000 over the listing price and the other is $13,000 under the listing price. (The listing prices are only $1,000 apart)

Example: 29-c Salem Drive (listed at $54,900 ) and 11-C Mohican Lane (listed at $55,900) in Manchester, NJ The one at 11-C just sold because the buyers obviously felt they were getting a house valued $21, 000 more than the list price. Meanwhile the other poor sellers (whose house is actually more expensively and more recently upgraded) is getting no offers because Zillow has it estimated $13,000 below the list price.

Total NONSENSE, FOLKS, and this has got to change!
0 votes Thank Flag Link Thu Nov 3, 2011
Joe,

Zillow and Trulia give estimates without the information that is required to accurately "assume" that your house would be the same. We use concise information that helps to organize where we expect a home shouild be priced. I will never offer a price without inspecting the home in order to allow for the exceptions that exist with every home. It would be similar to looking at Kelly's Blue Book to price an automobile. It is nothing other then a guestimate. I hope this helps.
0 votes Thank Flag Link Thu Oct 27, 2011
thanks for the story from the trenches Tandj...tools like zillow can be useful in limited circumstances but to rely on them exclusively is a sure fire way to get clobbered.

and the clobbering can be in both directions. i've known agents who were dealing with sellers who were relying on 'zesti-mates' that were too high. those sellers took too long to wise up and followed the market down and lost money for their errors.

with the easy availability of sales data there is NO REASON anyone cannot make their own assessment along the lines of zillow and get a much more accurate valuation. one needn't be a broker or agent...this ain't rocket science.
0 votes Thank Flag Link Thu Oct 27, 2011
HELL, NO! Thanks to Zillow, we lost the home of our dreams. We were foolish enough to think the the Zillow Z-estimates were an accurate indicator of true value. We fell in love with a listing in Magnolia, Delaware that we saw on Trulia and realtor.com-- MLS # 5940723- which is listed for $249,900, but Zillow has it valued a little less. So figuring it was overpriced, we moved on and looked for something that was priced at or below the Zestimate. We didn't even listen to our Realtor. We just demanded that we see houses in accordance with the Zillow estimates. I now cry myself to sleep every night after being told by professionals not to pay attention to Zillow. The house is in Magnolia was upgraded to where the seller will be losing over $40,000 at the current price, and it has every feature we ever dreamed of-granite countertops, premium located on pond and woods, enclosed porch, fireplace, full basement, crown moldings-the list goes on and on. But now we are stuck in a house with not even half of those amenites that we will never be able to sell. Someone please KICK ME.
0 votes Thank Flag Link Thu Oct 27, 2011
Zillow can be accurate to show what a home sold for on its last sale in a State that reports sale prices. In Texas, for example, the sales price is not public record and so Zillow "estimates" the closing price...sometimes they are close and sometimes they miss it by several thousand. I would never use Zillow as an estimate of what a house should sell for. Instead, use a good agent that can do a CMA.
0 votes Thank Flag Link Tue Aug 9, 2011
"Zestimates" are zip code specific. If one side of town is worth more than another side, it doesn not differentiate. It does not take into consideration certain aspects of the property so they are only estimates. The only way to truly get a true estimate of what your home is worth is to call a professional realtor or appraiser to do an analysis of your home.
0 votes Thank Flag Link Tue Aug 9, 2011
On the North Fork Zillow is not a good indicator of what a house will sell for or appraise. The appraised value of a home is based on similar home, square footage, condition and property size. The appraisers and real estate agents are able to pull the comparable sales. Zillow works with a very broad range. If you look at the Zestimate it has a very high range percentage between the high and low values.
0 votes Thank Flag Link Tue Aug 9, 2011
It should be called a very vage questimate not "zestimate".... Zillow doesnt take into consideration if a home has been updated ,the search engine basically values homes on Sq footage and nearby sales .. there is no way for zillow to know that the home that sold around the corner that is identical in size to yours was not updated and has a kitchen from the 70's and "your" Home has been gutted and everything is brand new.... just my 2 sense....

Thanks Mike
MikeNap07@gmail.com
0 votes Thank Flag Link Mon Aug 8, 2011
I just published a study where I evaluated the accuracy of Zillow and my site, EstiMike. See link below.
0 votes Thank Flag Link Wed Feb 25, 2009
Zillow is sometimes close to the truth. A year ago, in my area, I checked them out for about a month and they were never close to accurate. Recently, I checked again and found them to be kind of close maybe 50% of the time. As mentioned below, they are as good of place as any to start. They have pretty good maps.
0 votes Thank Flag Link Fri Feb 20, 2009
Reposting my last response:
How can a website, that uses only data (numbers on paper or in a database) be anywhere near accurate?

Think about this. I'm talking from experience. You've got to be IN the units. You've got to do comparisons to the studs in this market. "Fair market value" is getting more difficult to determine in this market with each passing month due to complete uncertainty in the financial markets - not just housing markets.

The energy crisis combined with how it's affecting every other financial sector CANNOT be understated. I don't care if you're buying a 10 million dollar villa or a 150,000 condo.

So Zillow, while maybe a few years ago when it first came out, might be somewhat helpful to see what's sold in a given area - I'm telling you from experience, as a Real Estate Agent and an RE investor - you absolutely positively CANNOT rely on a "zestimate" for anything. It's a complete waste of time.

Stepping back for a second, if you're just banging around on the net and trying to see what you're home is worth ballpark STRICTLY FOR FUN - then yeah - zillow is a cool site...lol

But it ends there. TRUST ME.
0 votes Thank Flag Link Fri Feb 20, 2009
Hello Joe,
An automated tool like Zillow is great as a starting point to gain a basic idea of general values in an area. Unfortunately Zillow only uses 1 (numbers) of the criteria that determines a homes value in the market. Condition of the home as well as several other factors go into the valuation of a home. I wish you the best on the sale of your home.
Irene M. Renna
4964 Expressway dr S
Ronkonkoma, NY 11779
631 467 0009 office
631 467 0029 fax
631 291 2180 cell
Irene.Renna@Century21.com
0 votes Thank Flag Link Fri Feb 20, 2009
No joe, they say it ain't so............
0 votes Thank Flag Link Fri Feb 13, 2009
No. I have seen zestimates that are much higher than market value and others that were way below. Zestimates use properties in surrounding communities that are not necessarily comparable... they could be in a better selling community or an inferior community.
Web Reference: http://www.HomesByLorie.com
0 votes Thank Flag Link Fri Feb 13, 2009
Not exactly, your best bet is to look at the most recent sales in your neighborhood and you can begin with MLSLI.com ; with that said also keep in mind the property values are dropping roughly 1% per month. If you are looking to sell and make top dollar even after a commission is paid, work with a good realtor who actually has a marketing plan to get the job done effectively in a short period of time; the longer you are on the market the more money you stand to lose.
0 votes Thank Flag Link Fri Feb 13, 2009
Zillow is still a fun diversion but you will be dreadful sorry if you rely on it. in todays market more than ever the “Zestimate” is useless for anything I can think of.

I have to disagree with greg g. when he says agents feel threatened by it…annoyed is a better word as we frequently encounter their valuations and they are most times incredibly different than ours. Let me use an example from right now. The listing I have on lahitte Ct. in San Diego is priced at $799,900. It’s been on the market for a very long time at much higher price and had no takers for various reasons. The new price is getting a tremendous amount of attention The Zestimate for the house is $920k…fortunately my clients are both savvy enough to understand that that number is simply not attainable in this market. it would not withstand the appraisal or the review appraisal.

I strongly suggest that all agents and clients become familiar with the case-shiller valuation method…it is the most accurate tool I have found for truly assessing any market. Median is a USELESS number.
0 votes Thank Flag Link Fri Feb 6, 2009
An automated tool like Zillow is great as a starting point. However, you have to understand the limitations of an automated estimate tool like Zillow. These tools create an estimate based on the overall economy and comps for recent sales. The challenge here is that it's hard for a computer to determine what is really comparable. The computer cannot determine things like the condition of a property - has it been renovated, or does it need renovation? Furthermore, most of these tools don't disclose their computer algorithms, so it's hard to know precisely how they make an estimate.

That said, I think many in the real estate industry feel threatened from online services like Zillow and Redfin. Keep that in mind when you read their criticisms of these services.

Disclaimer: I created a site called EstiMike - http://www.estimike.com - that creates estimates based on the widely-published Case-Shiller Home Price Index.
0 votes Thank Flag Link Fri Feb 6, 2009
The issue I find with Zillow is that:

(1) if the property is an actual listing that has been submitted, the reference is the listing value and not an appraised or assessed value. This clearly can be misleading, especially if the property is over priced for it's market area.

(2) The zestimate given for non-listed properties is usually the "fair market value" as determined by the calculation of the assessment and the current equalization rate applicable. In NY this varies by municipality. What occurs is that the "fair market value" is often not indicative of actual market value as determined by comparable sales. These values change with the desirability of individual neighborhoods and can often exceed the "fair market value" in a good market area and wiht favorable conditions

With the current declining market conditions that are being experienced more commonly, one might expect that the zestimate values may exceed the current actual real estate value as the zestimate may be based on an assessment performed in better than current market condition.

Either way, zillow values seem to be behind the curve and current market trends and therefore, misleading and subjective.
0 votes Thank Flag Link Wed Jul 30, 2008
Do not rely on Zestimates.

I've looked at a number of properties, then looked at the Zestimates and found the numbers far off. The same is true for the other online automated services. In fact, I just wrote a newspaper column about inaccurate ways to attempt to determine a home's worth. It hasn't been published yet, or I'd link to it. But here's what I wrote:
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
The first strategy which can produce misleading or inaccurate results is to rely on online, automated web sites. There are a number of them, including Zillow, RealEstateABC, and Eppraisal.com. A consumer logs onto the site, enters a property address, and in a few seconds is presented with an estimate of the property’s current value. Often there’s other data as well, including price trends for surrounding areas, a list of “comparable” properties, and more. The sites can be fun to use, and they often have good information about the home buying or selling process.

The sites calculate values by attempting to identify comparable properties—nearby similar-sized homes, often built around the same time, that have recently sold. All this information is run through proprietary formulas to produce a suggested value. However, those suggested values can vary greatly—both above and below the actual value. For example, I selected a recent home sale in Zip Code 22030 close to the NVAR average sales price of $621,570. It had taken 76 days to sell, right in line with the average days on market of 91.

In this case, the property was a 4 bedroom, 2.5 bath home built in 1986 that had sold for $605,000 in mid-June. RealEstateABC estimated its value at $539,000. Eppraisal estimated it at $558,947. Bank of America’s service estimated it at $560,045. And Zillow estimated it at $783,000.

A home seller relying on those online estimates might have priced the home as much as $66,000 under its fair market value. A home buyer relying on those figures might have overpaid by $178,000. That’s just one property, and certainly not a scientific sample. Sometimes the online calculations are more accurate. Sometimes they’re less accurate. The point is: A seller can’t rely on those services for an accurate valuation.
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Zillow does publish data indicating how accurate/inaccurate its numbers are. Even their published numbers generally indicate an unacceptably wide range, and I wonder (but can't outright dispute) their calculations regarding their accuracy.
0 votes Thank Flag Link Wed Jul 30, 2008
Don Tepper, Real Estate Pro in Fairfax, VA
MVP'08
Contact
Mike Ford givese an excellent answer. I would not rely upon Zillow estimates to make a real estate transaction decision. I have seen some zillow estimates 15% or more off the actual sold price. Their estimates just can't account for condition, amenities and locational influences which are some of the more important points to be considered when appraising a house. An appraisal from a qualified, experienced appraiser rendering market analysis and a credible opinion of value is the way to go.
0 votes Thank Flag Link Wed Jul 30, 2008
joe, if you would, can you let us know what the purpose of the valuation is.

it seems that the pro's here have a low regard for zillow. it also seems that someone just scrolled through and thumbs-downed the responses that were uncomplimentary to zillow. as practitioners we have all encountered "the zillow" and have had to explain that the zillow algorythm is a shotgun approach where a rifle is more appropriate. generally speaking we like our information accurate, complete and comparable

the nature of todays market is such that the need for a genuine appraisal is greater than ever. a full blown appraisal can be had for $400 in most trade areas. depanding on what your need for a value is it is probably best to have one done. if you are looking to re-fi the lender will have their own list of approved vendors so be sure to keep that in mind so you don't end up paying for two appraisals. if you are looking to value a property for estate or taxation purposes the zillow number will likely not be useful and might be counterproductive. if you need a number for divorce purposes or a disolution of a partnership the issue will be cloudier...zillow will elicit cackles from an opposing attorney, as it should from you if someone trots it out and wants to use it as a reliable and defensible valuation tool.

all the above scenarios illustrate the importance identifying the goal of the valuation...certainly if you are just curious within 10% it might be a decent starting point but if the valuation has any long term ramifications a credentialed appraiser is the place to go.
0 votes Thank Flag Link Tue Jul 29, 2008
Zillow is usually a good starting point for anyone trying to learn the market. The site pulls all the numbers for various forms of data, Listing Price does not mean a Good Sales Price. Overall the site is a good one.

Christopher Orth
"Third Generation Realtor"
267-980-2260
0 votes Thank Flag Link Tue Jul 29, 2008
How can a website, that uses only data (numbers on paper or in a database) be anywhere near accurate?

Think about this. I'm talking from experience. You've got to be IN the units. You've got to do comparisons to the studs in this market. "Fair market value" is getting more difficult to determine in this market with each passing month due to complete uncertainty in the financial markets - not just housing markets.

The energy crisis combined with how it's affecting every other financial sector CANNOT be understated. I don't care if you're buying a 10 million dollar villa or a 150,000 condo.

So Zillow, while maybe a few years ago when it first came out, might be somewhat helpful to see what's sold in a given area - I'm telling you from experience, as a Real Estate Agent and an RE investor - you absolutely positively CANNOT rely on a "zestimate" for anything. It's a complete waste of time.

Stepping back for a second, if you're just banging around on the net and trying to see what you're home is worth ballpark STRICTLY FOR FUN - then yeah - zillow is a cool site...lol

But it ends there. TRUST ME.
Web Reference: http://www.tommcgiveron.com
0 votes Thank Flag Link Thu Jul 24, 2008
Zillow Zestimates are speculative. If a property is listed and has been submitted to Zillow, the value will match the list price. If a property has not been submitted as a listing, the Zestimate changes to match the "fair market value" recorded with the local assessor from what I have been able to observe. In some areas, the listing values and "fair market values" can vary greatly. This does not mean that the values are "wrong". Either way, these values have no bearing on appraisal value. The best measure of specific value would be to order and pay for an appraisal. The other option would be to engage the services of a local Realtor to provide you with a Comparative Market Assessment which will give you the preferred range of value that your home should hopefully sell within.

Note, if the property in question is in an area where there have been recent sales, and for the most part, the properties are similar, then Zillow can provide you with a reasonable estimated value.
0 votes Thank Flag Link Wed Jul 23, 2008
Getting comparables from a licensed real estate professional is the best indicator of what a property might sell for. We have tried to use zillow several times and the information was totally incorrect!
0 votes Thank Flag Link Sun Jul 20, 2008
I've seen inaccuracies in several zip codes. Either way, buyers are aware of real estate research sites that assist them. When a buyer calls with price in mind, it's up to the agent to research comps in the buyers buying area to assess an accurate buying range.
0 votes Thank Flag Link Wed Jul 16, 2008
If you are looking to scope or to get a general idea of neighborhood values or house prices ..etc in a certain area zillow and other computer valuators are not a bad way to go, particularly timewise. But if you are looking at a specific, hard copy, real life, go situation stick with a pro appraisal or comps.
0 votes Thank Flag Link Fri Jul 11, 2008
The short answer is no. Zillow says it gives estimates within 10% of the price, any realtor worth a grain of salt can tell you the value of a home in there area with just a few pieces of information. The best way to determine what a home would sell for is to look at what similar homes have sold for in the past 3 months. Your realtor can provide this info without any obligation. This doesn't mean Zillow is not a resourceful website for those of us interested in real estate, home valuation is tricky and requires a human element.
0 votes Thank Flag Link Fri Jul 11, 2008
Word to the wise - don't even log onto that site. Waste of time.
Web Reference: http://www.tommcgiveron.com
0 votes Thank Flag Link Fri Jul 11, 2008
Zillow has gotten better over the last year but there are still some homes that are either under estimated or over estimated. Your best bet would be to have a realtor come in and do a CMA. I can do for you, there is no cost, call me 631 428 6467.
0 votes Thank Flag Link Fri Jul 11, 2008
I believe it is just that, "a good indicator." If you research further with recently sold homes in your area that are quite similar to yours, that would be even a better indicator. Without sounding totally self serving, I would contact your local realtor who will give you information totally free and without strings.
0 votes Thank Flag Link Fri Jul 11, 2008
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