Zillow does have a section at the bottom of their page about Zestimate Values and Accuracy. I do know from personal experience that most buyers never see that though as I often have buyers come to me saying this home is only worth this amount. I ask them where they got that from and they say Zillow or another online valuation website.

I try to go over the accuracy but many buyers do not want to believe that it is now 100% accurate, especially if the value comes out very low. Where I am located in Tampa there will sometimes for example be the subject home directly on Tampa Bay with the comparables on a narrow canal or sometimes with limited access such as because of a low bridge that limits the boat size to a canoe.

I have also had 4,000 square foot homes compared with a 2,000 square foot home and those are not comparables under any circumstances.

The online valuation websites can be quite accurate such as in a community built by the same builder with a limited number of floor plans. If there are enough sales of the same model the accuracy is quite good.

Where these sites are especially poor is when it is an area of custom homes, various extras such as type of waterfrontage and even quality of home. The also often will choose homes from inferior or superior homes in neighboring communities. For example, one subdivision comes out way too low. When I looked for the reason I found that it backed up to a subdivision of low priced homes that were of not very good quality. The homes there were popular with those that wanted to buy something real cheap, but they were not good comparables when looked at versus the other community.

The other problem is that these sites cannot compare quality. You may in a larger subdivision have high end builders such as Hannah Bartoletta, John Cannon and Arthur Rutenberg next to middle of the road builders. When you buy these homes brand new you can see a vast difference in the price per square foot and when you see the homes and compare them in person you will immediately see why. Unfortunately, online valuation websites do not know that one builder has a much better product than another.

Valuation websites are a good starting point for research, which is exactly what they advertise. They cannot replace the experience of a Realtor who knows the neighborhoods and can give you an accurate CMA, or that of the Appraiser who compares the best comparable properties. Both Realtors in their CMA's and Appraisers in their appraisals have to make adjustments for differences in the homes. The valuations sites do not.

Sincerely,

Jeff Launiere, P.A.
Real Estate Consultant
Keller Williams Realty
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