How Accurate is a Zestimate?

It seems like everyone these days sooner or later looks up the Zestimate on their own home whether they plan to sell or not. The question always arises, “How accurate is the Zestimate?”. To answer that you have to understand how they arrive at the stated value. It is a mathematical algorithm. Zillow won’t disclose the specifics of what data they use or the particulars of the algorithm. We know it does take into account some of the basics like recent sales in the area, square footage, tax evaluation, age, etc. 

By their own admission it can be significantly off from true market value. One of the limitations is Zillow cannot make a determination on the condition of the home. Consider this, you have two homes next door to one another. They are the same age and size. The one on the left needs a roof and a bath remodel and the basement is full of mold. The one on the right is fully updated like new. Zillow will assign the same Zestimate to both. Zillow also has trouble factoring in location and setting/view values. They were recently forced to suspend their iBuying program due to large differences in their estimated value and market value causing them to lose money on the program. 

If you are looking for a top Realtor in the Kettering, Beavercreek, Bellbrook, Dayton and surrounding areas please reach out to me and let’s talk.