As a Realtor, the recent headline, “Homeowner Sues Zillow for Low Zestimate,” really caught my attention.
As many of you may know, Zillow, the popular real estate search site offers free “Zestimates” which they define as an “estimated market value for a home, computed using a proprietary formula.” It serves as a starting point in determining a home’s value and is very different than an official appraisal.
The homeowner that brought this suit claims that the Zestimate is inaccurate and that it has harmed her ability to sell her home. She claims that the value of her home is $626,000, but that Zestimate estimates the market value at $562,000. The homeowner alleges that her home is being compared to several other homes, in less desirable areas, that have no bearing on the value of her property.
Despite the disclaimer that Zillow puts forth saying that the Zestimate is not an appraisal, the fact is that these guestimates may carry more weight in consumer minds than it should.
So, what is the takeaway? Whether you are buying or selling, you should enlist the services of an experienced Realtor, or hire an appraiser, to assist with determining the market value of a property rather than relying solely on an algorithm such as the one used by Zillow for their Zestimates. Realtors will provide a more accurate assessment of the market value by completing a Comparative Market Analysis, which isn’t the case with a Zestimate. Additionally, a Realtor will factor in upgrades, quality of finishes, and other distinguishing features, which a Zestimate does not do.
If you are thinking of buying or selling and would like one of our experienced agents to assist you with determining the market value of a property, please give us a call. We are always happy to help take the guesswork out of the equation.