Profile picture for BostonHarold

How accurate are zillow estimates for refinancing?

I have a 30 year mortgage at 6% with a balance of $185k.  (25 years left on it)  Zillow estimates my home at $173k, but the range is up to $184k.  So far, I haven't been able to refinance under HARP because I have lender paid PMI.  My lender wants 95% LTV to refinance.  I might be able to come up with enough to refinance if the estimate is $184, but definitely not at $173.    How likely is the appraisal to come in at the upper end of the zillow range?  I'm uncertain if it is worth starting this process.
  • April 21 2012 - Highland Creek
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Answers (12)

Profile picture for Catherine B Strachan
Hi,
I respect your opinion and there are many places where assessing value is quite simple.  In my area, proximity to the ocean is huge and "zestimates" will compare a semi oceanfront to one much further away, which is an apple and orange comparison and that is just one example. Appraisers look at figures but full time Realtors that know the market will give you an opinion of value, not an appraisal, of what your home will most likely sell for in the real world.  For example, one of my clients had his home appraised for $485K.  I told him I felt the appraisal was inflated and advised him to list around $445K.  He listed at $485K and kept making small reductions over a year and a half eventually down to $399K and still did not sell.  That is exactly where our value lies; giving a true opinion to sellers to help them save money in the long run by listing the home correctly in the first place. I feel our profession is not respected due to the ease of obtaining a license, however, most of my fellow agents on the Outer Banks of North Carolina are extremely educated and knowledgeable about the market.  When selling, value is determined by what someone is willing to pay for a property, not by an appraiser or computer generated estimate.
  • October 16 2013
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Profile picture for gregfagan
I'm a home owner and quite frankly I'm sick and tired of these so called "real estate experts" acting like computers and data and information has no value and that I should have a "real professional" estimate the value of my home.  I'm also disappointed at the mention of Harp and any other "promo" being sited in this context.  It's real simple in my mind:

What are comparable homes selling for in your area?  Is your house condition poor, average, our better than the expected condition? Honestly, you would think that the lot size, square feet, condition or the home, and county tax value tabulated into some type of end result were some type of rocket science!  BTW, thanks for letting me mention tax value.  Would you really like to buy a home for 180k when the taxes you pay are based on a value of 140k?  How about a house for 80k which is taxed at 135k?  What's even more interesting aside from the self proclaimed expertise in paying for a license and therefore becoming a Realtor and apparently a reputable "expert" is the tax implication.  I noticed in some of the comments that some of the Realtors are offering free appraisals!  

What does the county think your house is worth?  I digress in the fact that neither make any sense and welcome the "benchmark" that zillow offers and recommend considering "condition" and adjusting 10% in either "direction" (-5% up to +5%) and also adjusting for tax value (-5% up to 5%) and you're golden.  If you want to sell quick, go low and accept bids which will generally be higher than your asking price.  If you don't care how long it takes to sell, just keep asking to much and get what you deserve. :) 
  • October 15 2013
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At the risk of asking the obvious, if you want to know the value of your home wouldn't you work with an appraiser? 

I'd no more ask a realtor the value of my home than I'd ask one to fix my refrigerator. 

It costs you nothing
=======
perhaps because they're not a licensed appraiser? Might get their hand slapped by the state if they try collecting a fee for this without a  license.
  • May 06 2013
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Profile picture for Catherine B Strachan
Please consult with an experienced, full time Realtor in your area.  It costs you nothing in most places to have an agent perform a comparable market analysis for your home. Zillow estimates might be accurate in some areas, but I sell property on the Outer Banks of North Carolina, which is a very narrow strip of land with the ocean to the east and sound to the west.  I had a buyer client use the Zillow estimate when deciding what to offer on a property, but he was using one semi-oceanfront property and another much further away from the ocean.  Additionally, some oceanfront properties are much more stable with higher dunes, offering more protection from erosion and storms.  There are locations here where the distance from a higly valued lot to one where you might not be able to even obtain financing for could be less than a few miles away, so I especially suggest not relying on them in more geographically unique locations.  You can easily get a more accurate value of your home from a Realtor at no cost to you!
  • May 06 2013
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While the zillow information is helpful, you are better off talking to a goodRealtor in your area to see if they can run a quick report of homes like yours that have sold in the area in the last 3 to 6 months. Appraisers will be using these same comparable sales when they appraise.
  • May 04 2013
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Profile picture for user8864541
Some will dispute the Zillow estimates to convince sellers or buyers that the home is worth more. Agents are in it the take in the highest net commision. The algorithm used by Zillow is reasonable as is the resulting zestimate. When I sold a home last year I was disappointed that the zestimate was lower than desired. The house was listed at a higher price based on some comparables (only houses sold last 2-3 months matters, not those for sale). There were some inquiries but no offer. Once the price was set at the zestimate the house sold. Others similar houses sat for months because the price was too high. Those where the price was adjusted eventually sold. The others are still waiting.
  • May 04 2013
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Zillow estimates are not accurate. When you look at comps, you should be looking within your particular subdivision or neighborhood for homes currently for sale and have sold in the last 3-6 months of similar style, size and amenities. Zillow does not distinguish where neighborhood boundaries lie and can lump 2 or 3 very different neighborhoods and price ranges together because they are in close proximity to each other. I have found that many Zillow estimates are off by a significant amount. Not worth even considering in my opinion.
  • April 21 2012
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My response was to save this person $400 on an appraisal when they will most likely not need one if the qualify for HARP 2.0.

 I don't really care what the Zillow estimate is but go find another lender that does not have overlays on the HARP 2.0 program.

 I only lend in Florida!

  • April 21 2012
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Zestimates are totally useless for any purpose let alone something as important as refinancing. The chances are that your zestimate is understated and your best bet is to take the advise suggested by other posters regarding recent home sale prices of comparable homes in your neighborhood and getting an appraisal do you get a bespoke 'rea' value rather than some statistical quirky value which no one can explain how it was computed.
  • April 21 2012
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Profile picture for Blue Nile
The "range" is a "70% confidence interval", but the distribution doesn't follow a normal distribution curve; the kurtosis is greater than 1, so the distribution is more peaked around the median than a normal distribution.

You also want to look at the "about Zestimates" link at the bottom of the page.  It indicates for Mecklenburg County NC, that 50% sell within +/- 8.3% of the most recent Zestimate prior to the sale, and that 77.6% sell within 20% of most recent Zestimate prior to the sale.

Your chances of your appraisal coming in at the top of the Zestimate range or higher is about 15%.  That is better than playing the lottery.

Zestimates are not an appraisal and can't be used by any lending institutions for "loans".  Look at the Zillow terms of Use.  It indicates all data and estimates on this site are for PERSONAL USE ONLY!
  • April 21 2012
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I would find a new lender!  You can convert your lender paid mortgage insurance to borrower paid mortgage insurance with HARP 2.0 but you have to find a lender that familiar with this process.

 

Fannie or Freddie will either accept the value your loan officer inputs into the system or it will ask for an appraisal.  I have had success using the Zillow value for appraisal waivers.

 

I only lend in Florida

  • April 21 2012
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Profile picture for Cindy Quinton
I would ignore the zestimate and try to figure out how well your home compares to recently sold homes in area. Seeing what sold, and how much per square foot it sold for, then using those figures on your home might give you an idea if the appraisal is worth paying for.

Some agents will do a free comparable market analysis in the hopes of doing business with you someday.

You can also look at some of the other AVM sites and see where they estimate your home's value. There is a list of them with live links to the pages on Pasadenan's post on this thread: AVM's
  • April 21 2012
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