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Determining Zestimates?

How are these zestimates calculated? The home behind me is the "eyesore" in the neighborhood with a smaller lot, AND it is zestimated MORE than my home, I'm on a lot and a half and have one of the nicest homes on the block, landscaped, newer roof, new windows, new siding etc.... What gives????
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August 27 2013 - Griffith
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Answers (21)

Profile picture for Pasadenan
Only people that aren't satisfied with what they have worry about what others might think that they have.... and worse, worry about what others might think others might have....

If you are not satisfied with your property without having to compare yourself with the neighbors you admit to disliking, you will never be satisfied with your property, even if you spent $500k per year on "improvements".

As already mentioned, your "new windows" are not part of the machine estimate... users of the estimates need to factor in such "changes since purchased" themselves.

Besides, Zillow never claimed that the neighbor's house behind was worth more...  you need to look at the 70% confidence interval posted for each, not just one number that is somewhere in that range.

But I'm glad you decided to never use websites like Trulia or Realtor.com; that is probably a good decision since those sites exist to spread Realtor propaganda.

No business???  They are only one of thousands, have less than 10% market share, they publish statistics on their estimates that many of the others don't, their tolerance range is no wider than any of the others, and estimates are and have been their business since their business started.   As they say, if you don't want to know someone else's opinion, no one is requiring you to read them.
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September 01 2013
Profile picture for Herodotus2012
To the original poster: I am with you/!
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September 01 2013
Profile picture for user39355292
When I posted my first  comment, I failed to mention this was my first time on this type of site, and now, ultimately my last. This site, even after reading ALL the responses from professionals to the non professionals, still, in my eyes needs to be SHUT DOWN and NO one should ever consider using this ridiculous, absurd, un educated , worthless site. And to the poster who said something about it's a case of trying to keep up with the "Joneses" and that's why I'm offended by the zestimate-BS!!!! I am the "Joneses" that's why this all started, idiot!!!! Read my original very polite post. I HAVE the Largest lot, thee nicest house, landscaped, updated, new windows , new siding and roof!!! The house behind me is a complete eyesore in the neighborhood, it's a shack, smaller house,  smaller lot, but 1 more bedroom. I'm upset yes, and you would be too if something like this showed up on a public site valued more than your pristine home that you work so hard for and work hard to maintain. Zillow has no business determining what a home is worth, until they educate themselves, bottom line!!!
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September 01 2013
Profile picture for Pasadenan
Condescending?  The only people that are being condescending are the ones claiming that approximately 5 million buying households each year are too stupid to figure out that they should not primarily base what they offer on machine generated estimates nor Realtor® opinions.

And maybe those claiming that buyers and sellers should "just trust their Realtor®" as so many did over the last decade?  So that over 10 MILLION households filed bankruptcy and had foreclosures since 2007, typically loosing 100's of thousand of dollars for each of these households, just based on faulty CMA's and National Association of Realtors® propaganda?

Yes, you can criticize the American public as being too stupid to understand estimates all you want... but they are not as stupid as you claim, and the machine estimates are not as random and "unfounded" as you claim either.

As for "faulty input"???   Anyone reading the site has the ability to correct faulty input on the home details pages, if they know it is actually "faulty".  You might want to start reading each of about  125 million home details pages personally right now so that you can fix all your perceived errors, since you are on a mission to fix the issue.  It should only take you 40 years straight at 10 seconds per page.
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August 31 2013
Profile picture for Herodotus2012
Hey Pasadenan, don't be condescending.  

And what does communism have to do with criticism that uses faulty inputs to generate a bold headline Zestimate?


And bell curve doesn't apply to a situation where the outcomes are skewed by the observer not incorporating relevant variables.  That is higher statistical theory.
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August 31 2013
Profile picture for Pasadenan
"However just knowing that there is a sight (sic) out there that put a higher value on this trashy home behind me is driving me nuts!!!!" -

That is the nature of worrying about "keeping up with the Jones" and doing random comparisons of marbles to wheat.

So, if one is worried about one site that provides machine estimates with a wide tolerance margin, what about all the others?  Here are a few more "free" AVM's to check out:

finestexpert.com

Realestate.com/homepricecheck

homes.com

Homesand.net

Eppraisal

realquest.com express

cyberhomes.com

trulia

chase

homegain

smartzip

dataquick

And of course, there are dozens of "pay for service" AVM's as well, not to mention the thousands of private AVM's used "in house" by various business and financial institutions.
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August 31 2013
Profile picture for Pasadenan
"It's terrible to think a homes value could hinge on this dreadful site." -

They don't... "values" are not determined by "estimates".  "Estimates" are determined by the "features" that attribute value.  It is an "implication", not an "equivalency".

"They are not even close to being approximate in many instances." -

In most cases, the eventual "sold" price (determining "present market value" by definition... "a willing buyer and a willing seller agreeing on a mutual transaction price") is well within Zillow's published 70% confidence interval, thus it is "as close as anyone claimed", and much closer than most Realtor's® CMA, who still consistently refuse to provide any statistics on their estimates.

"hire a .... or Licensed real estate agent."  -

Remember what Realtors® tell you about their FREE "CMA"s... "You get what you pay for", meaning their CMA's are "worthless".

"Buyers look at the one big number - they don't read the footnotes." -

Most buyers are not that ignorant and pay attention to a lot more details when determining if they will make and offer, and how they will establish their initial offer, especially looking at "what else is for sale in that price range", and how the features and neighborhood of the "other choices" compare, applying they buyer's set of priorities, not some third party opinion.  Over 20 million users of the website read the footnotes.

"Why are so many people apologizing for Zillow" -

No-one is apologizing for Zillow; someone asked a question how something was "done", and simple explanations were provided.  Even if someone knew 20 million details about a given property and a given neighborhood, they still could not derive what some other random party would "PAY" for the property at any given time to within a $1 "accuracy" with 100% certainty.  Ever heard of a "bell shaped curve" or "normal distribution" when going to school?   It is applied probability theory, not "communist fixed market pricing".

"what did Zillow post as the per square foot value?" -

Square foot value is a "useless" number as it doesn't properly consider land value.
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August 31 2013
Profile picture for user39355292
So without the facts a zestimate should not even be entered. It's terrible to think a homes value could hinge on this dreadful site.
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August 31 2013
Profile picture for Herodotus2012
Also, to the original poster, try homes.com.
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August 31 2013
Profile picture for Herodotus2012
To the original poster, try Trulia and see whether that is more in line with what you think your house is worth.
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August 31 2013
Profile picture for Herodotus2012
To say Zestimates are approximate does a disservice to the word approximate.  They are not even close to being approximate in many instances. Why are so many people apologizing for Zillow.


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August 31 2013
According to Merriam-Webster's dictionary. Estimate "a rough or approximate calculation". A "Zestimate" is just that a rough or approximate calculation. All real estate markets are different, all properties are unique and different. If you want an accurate estimate of market value for a specific property in your area hire a State certified real Estate appraiser or Licensed real estate agent.
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August 31 2013
Profile picture for user39355292
I did not see per sq. foot value. But the zestimates on my block in a small Indiana town, range from $89 thoudand to $238 thousand. It is a joke!!!! You are right, this Zillow sight is USELESS!!! Now I am trying to not let this ridiculous sight upset me. However just knowing that there is a sight out there that put a higher value on this trashy home behind me is driving me nuts!!!!
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August 31 2013
Profile picture for Herodotus2012
Reading all these posts suggests Zillow is completely in the tank.  Buyers look at the one big number - they don't read the footnotes.  The posts trying to explain away Zillow's uselessness are just useless as well.

To the original poster, what did Zillow post as the per square foot value?

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August 31 2013
Profile picture for Pasadenan
By the way, though it should be "self evident", it likely is not, so I will point out that "NEW" often does not mean "better".  Say, for example, one has hand crafted detailed hard-wood double paned low emissivity craftsman windows specifically designed for the home, but they needed re-glazing, a little paint, and some new weather stripping, which the home owner was thought was too much work and too expensive, so had someone completely replace the windows (without even removing the window trim for proper installation) with single pane aluminum slider windows with no energy rating of any kind.  Though at least now the "pealing paint" is not an issue, any good appraisal by a licensed appraiser would have to have a line item adjustment for the "lower quality windows" reducing the value of the house.

YES, REDUCING the value, EVEN if the home owner paid over $15k to have that "new work" done.
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August 31 2013
Profile picture for Pasadenan
"So, a "shack" with 4 bedrooms could, by Zillows standards be more valuable than a pristine home with 3 bedrooms?" -

Yes, and "no"....  one of the variables used in the modeling is the last sold price adjusted for "sold" date, so something purchased as a "shack" would be estimated as a lot less than something purchased as "highly detailed, great views, custom casework, 15 foot high ceilings, sloped 40 yr slate roofs... you get the idea.

But the county records and owner/agent posted data cannot account for what happened SINCE purchased... so if it WAS "pristine", but hasn't been painted for 25 years now and all the paint is flaking, and if the roof is badly worn and damaged, and the grass is all dead weeds, it will "look" like an "eyesore" but still be estimated like someone was maintaining their property.  And that "shack"?  It may not only have had a full restoration and face lift, but it may even have had major additions and "reconstruction", and custom interiors added.  Not to mention, those "problem neighbors" when they bought may be completely "gone" now.

The longer it has been since last sold, the more "adjustments" the users of the estimates have to apply to what they are seeing.

That is why a high Zestimate compared to list price typically means "FIXER"!  And a low Zestimate compared to list price usually means "recently restored and/or remodeled".

What "gives"?  That is exactly why Zillow states their "automated valuation model" is only a "STARTING POINT" for further evaluation.  It is not an "appraisal".  If you needed that, you would have to pay for one from a licensed appraiser.

Zillow has always explained this in detail, such as the FAQ: "what is a Zestimate".  Not to mention the "70% confidence interval (range)" published with EVERY Zestimate, that is typically wider than +/- 20%.

Unfortunately, most people just don't want to know, and don't bother to read, and think that because "math" is involved, that the one number they randomly read on any given day is "the word of God, with a precision of  0.000001%".  You can't even get two adjacent gas stations across the street from each other to agree on the value of a particular grade of gasoline on any given day.
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August 31 2013
One more time; Zillow pulls data feeds from all around the country. The #'s are 'total estimates' - they don't inspect each house. It's actually more accurate than not.
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August 30 2013
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Is land considered external?
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August 30 2013
You're right - Zestimates are routinely off the mark.  The good thing is that Zillow actually tells us how much from the mark they made it.  All in all, it's a great starting point when you are just starting out.

Check out the recent Zestimate accuracy chart here:
http://www.zillow.com/howto/DataCoverageZestimateAccuracy.htm

This is a good meaty article I like to reference when speaking about Zestimates:
http://www.zillowblog.com/research/2012/09/21/putting-accuracy-in-context/

Of course, only a licensed Realtor has access to complete across the board data - from tax records, to current stock and pricing fluctuations of your local market.  Reach out to a Realtor in your city and ask for a "CMA".  That is the best document you can have when determining the value of your home.
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August 28 2013
Profile picture for user39355292
So, a "shack" with 4 bedrooms could, by zillows standards be more valuable than a pristine home with 3 bedrooms? I am not being sarcastic, I am just trying to understand the rationale. Thank you
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August 27 2013
Zillow can't account for external features, or even internal features, of a home.  It is estimating what it's worth based on square footage, beds, baths, and lot size.
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August 27 2013
 
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Determining Zestimates?
Profile picture for Pasadenan
Latest answer by Pasadenan
September 01 2013 | 21 answers
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