Here’s why sellers shouldn’t rely on Zestimates to accurately value their homes.
I speak with many buyers and sellers who base their decisions to move entirely on one of Zillow’s Zestimates. I understand why—Zillow is one of the largest online real estate platforms in the world, and it’s very user-friendly.
The problem, however, is that these Zestimates are often inaccurate because Zillow uses algorithms based on other homes that have sold within a certain geographic radius regardless of their condition or subdivision. They don’t necessarily take into account upgrades homeowners have made or whether a home needs massive repairs. They also may not know how many beds, bathrooms, etc., a home has.
Zillow uses algorithms based on homes that have sold within a certain geographic radius regardless of their condition or subdivision.
In the 70503 ZIP code, for example, homes on one side of West Bayou Parkway increase in value anywhere from $15 to $40 per square foot compared to homes on the other side. It’s also common for a home’s Zestimate to increase the minute it is listed because our local MLS feeds information directly into Zillow. We listed a home in Walker’s Village recently, and if that seller priced their home strictly according to its Zestimate, they would’ve left $25,000 worth of equity on the table. Zillow’s own CEO doesn’t even trust Zestimates. In 2016, he sold his Seattle home for 40% below its Zestimate, and this year he listed his Los Angeles home for 20% above its Zestimate.
If you want a say over how your home’s Zestimate is calculated, log onto Zillow, create a profile, type in your home’s address, and claim it as the owner. Remember to include as much information about the home as possible. Keep in mind, however, that this isn’t guaranteed to increase its Zestimate. As I said, many other factors determine its value.
If you want to know what your equity position really looks like, give me a call or send me an email. I’d be happy to help. If you have any other real estate questions, feel free to reach out to me as well. I look forward to hearing from you.