How accurate is Zillow and eppraisal? Are the values a real indicator of the actual price of the house ?

Asked by Hironmoy, Santa Clara, CA Tue Jun 7, 2011

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28
Karen Parsons…, Agent, Laguna Beach, CA
Wed Jun 8, 2011
Hi,

Zillow should be used as just one of many tools out there....but the only accurate estimate can be done after an agent looks up comps for you.

Karen
2 votes
Terri Vellios, Agent, Campbell, CA
Tue Jun 7, 2011
Here is how I like to answer this question. Zillow and Eppraisal is a computer it can not interpret the data. Here's my example; If you show these sights two pennies, one dated 1996 and one dated 1943 it will tell you they are worth 1 cent. If that 1943 pennny was minted in Denver in Bronze vs Zinc it would be worth $1.7 mil. while the 1996 is still only worth 1 cent. This is where experience and skill come in handy. An agent and appraiser who is familiar with the local values will be able to give you a better idea of the value of the home.

Those sights are just one of many tools the general public have access to which aids them in looking at how different neighborhoods are valued.

All the best to you.
Web Reference:  http://www.terrivellios.com
2 votes
sites...
Flag Sat Oct 4, 2014
Bill Mccord, Agent, San Jose, CA
Tue Jun 7, 2011
As accurate as might be expected given that they have no relevant information regarding a propert they have never seen, and are comparing it to other properties they have never seen.
Bill
2 votes
The Medford…, Agent, Fremont, CA
Wed Jun 8, 2011
Hironmoy:

Here is a post that explains the process and accuracy in detail:

Zestimates: Zany, Zesty Z-Evaluations With Zero Z-Value
http://www.trulia.com/blog/carl_medford/2009/10/zestimates_z…
.
1 vote
Charlotte Tu…, Agent, Williamsburg, VA
Fri Aug 8, 2014
Zestimates are useless and even harmful to home sellers and buyers. They are based on public and market information that is very broad and general and do not take specifics of the homes into consideration. It's not really a tool at all but rather a distraction. The best way to get a home value is to get an appraisal or broker's price opinion (both cost money). The next best way is to have a real estate agent you trust pull up comps and engage them in a conversation as to what the subject home.

Zestimates are entertainment at best!
0 votes
Steve Quinta…, Agent, Albuquerque, NM
Fri Aug 8, 2014
Neither are accurate except occasionally. Will all due respect, this recalls the time-honored adage about the laws of probability: Give 1 million monkeys 1 million typewriters and they'll eventually type the entire works of William Shakespeare.
0 votes
Ruth and Per…, Agent, Los Gatos, CA
Fri Aug 8, 2014
Not accurate., Hironmoy

They give you an average, based on past sales across the neighborhood.

What you are looking for is a more accurate number based on a micro neighborhood
or a school or location, based on other attributes.

Zillow and eappraisal, cannot factor that in.

Let me know how I can help.

You will also find this link of interest:

http://www.trulia.com/blog/perry_mistry/2014/07/silicon_vall…

Best regards
Perry

408-656-5343
0 votes
Galia Taneva, Agent, Sunnyvale, CA
Fri Aug 1, 2014
All AVM (automatic valuation models) are inaccurate since they are just computer models using public data. They all have a range + or - 10%. The most important think to know is how often this value range is accurate and according to Zillow - Zestimates are within the 10% value range 70% of the time. Even Zillow is suggesting that the most accurate estimate can be done only by a Real Estate professional that works in the area where the home is located. AVM's don't take in consideration home improvements, remodels etc. So to answer your question - in 70% of times the values that you see on these sites will be within 10% of the value of the home. If this percentage satisfies you - go for it. Otherwise contact a Real Estate Pro to help you determine the value of the home.
Best,

Galia Taneva
(408)306-2950
0 votes
Bill Gassett, Agent, Hopkinton, MA
Wed Jul 9, 2014
Anyone who believes Zillow estimates of value are anything close to being accurate has to be out of their mind. In most major markets around the country Zillow does not come anywhere close to being accurate. They are the bane of all real estate agents who have to constantly explain to their clients why the values are not correct.

Take a look at one of the most comprehensive articles you will see on why the Zillow estimates of value are so far off: http://www.maxrealestateexposure.com/are-zillows-home-value-… After reading this you will have a clear understanding of why you should always consult with a local Realtor as to your homes true value.
0 votes
Robert Lei, Agent, Cupertino, CA
Tue Jul 8, 2014
These automated sites aren't built to take into account the specifics of each situation.

For example, in Sunnyvale the best elementary school is adjacent to the worst elementary school. Zillow and eppraisal can't figure out this type of information for each case.

Also, a real human can look at the photos and read the listing comments to take condition into account.

Moreover, if the property is in a new home community, a real human can make sure to only look at other sales in that same complex.

Furthermore, a real person can judge whether the values have been increasing or decreasing and judge how fast that trend has been moving.
0 votes
Richard Silv…, Other Pro, Bonita, CA
Mon Jul 7, 2014
In my experience as a real estate broker and certified residential real estate appraiser, Zillow is usually 5% to 15% off of the true appraisal value and eppraisal is not even in the value range most of the time. The major problem with these types of estimates are that they are a computer generated statistical analysis of all homes that have sold in the neighborhood within a specific time frame. When I select comparables for a property I closely match the most recent closed sales with the subject property using similar age, lot size, bedroom/bath count, gross living area, amenities, etc. I am very aware of the fact that I may have to explain my comparable selection before a court while being questioned by an attorney. This is one of the main reasons that I and most appraisers spend several hours of research to complete an appraisal report.

Web Reference: http://www.realtyappraiser.biz/
0 votes
tashdonnelly, Home Buyer, Santa Clara, CA
Wed Apr 30, 2014
They are not accurate. Zestimate of 367,000 for my dad's house--he just sold it for 545,000. That's a pretty big difference!
0 votes
Avalon375, Home Owner, Riverside, CA
Fri Apr 25, 2014
eppraisal really low balls home prices and zillow is usaully high balls. Neither one are very accurate;
0 votes
Rstravis, Home Owner, Chicago Heights, IL
Fri Jun 17, 2011
I bought a house last year for $80k. Today I looked, and zillow had two entries for my home. One listed the value at $60,500, and the other at $81,900. So how accurate are they? Well, I'll let you be the judge. But I think $82k is close to accurate. The house was move-in ready because the prior owner was very conscientious. But there are several homes in my neighborhood going for far less, because the neighborhood was built in the 1940s, and some are getting run-down and are fixer-uppers. So the 82k is probably pretty accurate for my house ... but 60.5k is probably a good neighborhood average.
0 votes
The Stephen…, Agent, Portland, OR
Wed Jun 8, 2011
The last time I attended a Zillow seminar - from Zillow's mouth - they said they are wrong 30% of the time by more than 30,000.
0 votes
Molly Hay -…, Agent, Columbus, OH
Wed Jun 8, 2011
This is a great question! I get this question from my buyers and sellers daily! It looks like everyone below did a great job!
0 votes
Christopher…, Agent, Tarrytown, NY
Tue Jun 7, 2011
Hi, Don't go by those Zestimates. They don't take intpo account any updates, etc unless they are manually inputted into the system. the best way to value your home is have an agent come in and do a free comparative market analysis for you.

Chris
Web Reference:  http://raveis.com/chrispagli
0 votes
Dan Tabit, Agent, Issaquah, WA
Tue Jun 7, 2011
Hironmoy,
I tell my clients they are high 49% of the time and low 49% of the time which means 1 time in 100 they are right. Zillow has data regarding their accuracy and realize they are only a starting place. At the bottom of the page they will tell you how close they are in the area you are looking at.
Nothing compares to a human being who sees the houses inside & out. Realtors and Appraisers will render value opinions based on research, but the final judgment comes from putting a home on the market and finding out what a willing buyer and willing seller can agree to.
0 votes
I can't trust any broker who can't do math. 49% plus 49% equals 98%. That would mean the estimates are accurate 2 times in 100. :)
Flag Tue Jul 16, 2013
Roland Barcos, Agent, San Jose, CA
Tue Jun 7, 2011
Hi Hironmoy,
This is an excellent question and the sad truth is that Automated Valuation Models (AVM's) are very clever high-tech nonsense. These systems are extremely large and complex, and creating such presentations is a marvel of data collection, computer programming, and website development. But there is a huge difference between being novel and interesting, and actually being useful and accurate. On their website, Zillow charts the accuracy of their Zestimates - someone earlier said they claim to be within 20% of the actual sales price. Actually it's not that good, as the statistics state that they are +/- 20% only 78% of the time. Compare this with the fact that more than 95% of homes are now selling within +/- 3% of list price in Santa Clara Co.

Take care,
Roland
0 votes
Robert Spino…, Mortgage Broker Or Lender, Mill Valley, CA
Tue Jun 7, 2011
Hironmoy,

I check Zillow before and after I get an appraisal on every transaction and I have to admit that as long as the property is not unique by definition, and as long as there are sufficient comps, the values often come in within an acceptable margin of error and are in line with the appraised value.

It IS very important to keep in mind that any two appraisers might have very different opinions of value as well --- so it's not just the fault of any computer algorithm.

So to answer your questions, I would say: Quite accurate and "yes" an indicator of the actual price.

Let me know if I can help you further.

Rob Spinosa
rspinosa@rpm-mtg.com
0 votes
Grace Morioka, Agent, San Jose, CA
Tue Jun 7, 2011
Hironmoy:

As the others have already mentioned, Zillow, Trulia, eppraisal and other sites use their own custom mathematical algorithms to determine price values based on listing, pending and sold prices of surrounding homes within specific geographic locations. When you consider the enormity of this job and the sheer number of homes sold in the United States, any website that can generate estimates that are even "close" to the actual price--well, that's pretty amazing.

Unfortunately, some of the most important factors in "pricing" a home--school district, configuration, location, interior condition--are not considered in these mathematical equations, so much so that even Zillow admitted recently their estimates can be as much as 20 percent off the price for a home.

Truth is, the only way for you to really determine price is to pay for an appraisal to obtain a value.

Otherwise, as mentioned in the past by many of us here on Trulia, the amount of money a home is worth is based solely on what the buyer is willing to pay and the seller is mutually willing to accept. Most importantly, Hironmoy, your best answers and those tailored to your specific needs and to any home to which you are considering will come from your own agent--hopefully, someone who is local in the area and understands the intricacies of pricing homes here.

Good luck!
Grace Morioka, SRES
Area Pro Realty
0 votes
Bill Eckler, Agent, Venice, FL
Tue Jun 7, 2011
There are two sets of value numbers: actual sale prices and what Zillow refers to as "Zestimates." Zillow's sales prices are actually very accurate because they come directly from the local tax records.

The flip side of the coin indicates that the Zestimates although can be a good reflection of the current value may also not be accurate at all. The Zillow property values numbers appear to be driven by the subject properties proximity to the comparison homes. Their theory is the closer the comparisons are to the subject the better the accuracy.

This unfortunately, in not always the case. Adjacent communities can be as different as night and day and should not be used as comparisons. A trailor park located next to $500,000 homes should not be considered valid comps.

The fact of the matter is that it's impossible for accurate value numbers to be generated from a distance. If this were acceptable it would seem that most appraisals would be done similarly.

In short, the information could be good or it could be misleading causing people using this as a resource to exercise great caution.

I hope you find this helpful.

Bill
0 votes
David Burnham, , Washington, DC
Tue Jun 7, 2011
To echo other people's thoughts, go out and spend $80k upgrading your kitchen and see what happens to your zestimate. Not much if anything. I sold my home last years for $150k over the zestimate, so I would say that if they are accurate, it is more by luck than anything. To many factors come into play that an not be considered with an automated estimate process.
0 votes
Andrea Wince…, Agent, Milpitas, CA
Tue Jun 7, 2011
Zillow derives It's sold data from county records. If someone sells their property to a family member for low price it affects calculations and value data. Best indicator of value is open market MLS sold data.
0 votes
Joe Wilson, Agent, San Jose, CA
Tue Jun 7, 2011
For relatively homogeneous neighborhoods with reasonable turnover, the estimates can be fairly accurate. However for very non-homogeneous neighborhoods (e.g. a mix of different home types, styles, vintages, quality or condition), the estimates can be way off. I did a little study of Zillow Zestimates a couple of years ago and found differences as large as 40% between Zillow's Zestimates and the subsequent selling prices of several different properties. If you want to know what a home is really worth, have a qualified Realtor perform a comparative market analysis or spent $400 for a professional appraisal. Zillow's job is to attract eyeballs which allows them to sell ads. Accurate value estimates are only of secondary concern.
Web Reference:  http://www.JosephWilson.com
0 votes
April Tavares, Agent, Campbell, CA
Tue Jun 7, 2011
Hironmoy,

You have posted 17 questions in the last week. We all hope you are gaining valuable insight into the market. Hopefully, you are also learning that it might be helpful to you to select a Realtor to partner with who understands the market as they study and work in it every day.

All the best,
April Tavares, GRI, ASP
Realtor®, DRE License #01742179
Montalvo Realty
Direct: 408-309-5471
Email: April@AprilTavares.com
On the web: http://www.AprilTavares.com
Free Santa Clara County Market Trend Reports: http://april.rereport.com
Web Reference:  http://www.AprilTavares.com
0 votes
Ron Thomas, Agent, Fresno, CA
Tue Jun 7, 2011
Bill hit the nail on the head!

Even two years ago, Shortsales and REO's were a small part of the picture. A lot of professionals would not count those when they were computing Averages.
Lately, those two types have comprised as much as 80% of the sales in some areas.
So, when we look at Mean, Median and Average; we ask the question, "What was the condition?" since almost all of those REO's and many of those S.S. are in "fixer" condition.

This is one of the reasons why you need an Agent to help you investigate and analyze.
0 votes
Pacita Dimac…, Agent, Oakland, CA
Tue Jun 7, 2011
Not accurate at all. They may be online resources, but should NOT be THE resources. You can see both services provide "appraisals" that are too often vastly different from each other. So who's right? Neither!

They don't factor other pertinent information or the nuances of location. One street separating two properties can make a HUGE difference in actual and perceived market value.

Either rely on a realtor to give you a CMA (comparable market analysis) or count on your appraiser to give you the value which is what your bank will use when analyzing how much to loan you to buy it.

Good luck!
0 votes
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