Chances are if you’ve ever considered purchasing a home, or selling your current house, that you’ve ended up searching on Zillow. Even out of curiosity, Zillow searches have peaked with the surge in home values over the past couple of years. What is the Zillow Zestimate, though? And is it an accurate representation of what your home (or future home) could be worth?
Zillow’s Zestimate is an online tool that provides an estimate of a property’s value based on a variety of factors such as its location, size, and features. While Zestimate can be a useful starting point for buyers and sellers, it’s important to understand that it may not always be entirely accurate. Here are some reasons why:
- The Zestimate is generated by automated algorithms. The algorithm uses both public and user-submitted data to estimate a property’s value. While this can be a quick and easy way to get an estimate, it doesn’t always take into account unique features of a home or recent updates that could affect its value.
- The Zestimate doesn’t consider the condition of the property, which can significantly affect the value of the home. For example, a home that has been well-maintained and updated will likely be worth more than a home that needs significant repairs.
- The Zestimate may not reflect local market conditions. Real estate markets can vary significantly from one region to another. Currently there are markets where home prices are falling, while in our Charleston market, they’re continuing to increase at a small percentage. The Zestimate may not accurately reflect the current value of a property in a particular market since the markets are continuously fluctuating.
- The Zestimate doesn’t account for unique features. It uses data from similar properties in the area to estimate a property’s value. However, it may not account for unique features that can significantly affect a home’s value, such as a pool, a view, or a custom renovation. Tax data and public record information can only go so far when it comes to automated results.
- The Zestimate doesn’t consider seller concessions. It pulls the total sale price, which sometimes can include extra funds for future repairs (such as found in a renovation loan) or concessions from the seller where prices have been reduced to accomodate for some of the buyer’s requests. This can include things such as paying closing costs or including personal property in the sale. This can affect the overall value of a property and is not factored into Zestimate’s estimate.
- The Zestimate may not be updated regularly. While it is updated periodically, it may not reflect the most recent changes in a particular market. With such an odd market, conditions are fluctuating on a much faster timeline than previous markets. This means that Zestimate may not accurately reflect changes in the local real estate market or recent sales in the area.
While Zillow’s Zestimate can be a helpful tool in estimating a property’s value, it’s important to understand its limitations. Factors such as the condition of the property, local market conditions, and unique features are not always factored into Zestimate’s estimate. If you’re considering buying or selling a property, it’s essential to work with a licensed real estate agent who can provide you with a more accurate estimate of the property’s value based on local market conditions and the property’s unique features.
We’re happy to provide you with a CMA (comparative market analysis) customized to your home, or the home you’re looking to purchase.