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Answers (14)
- user397927
- Contributions:4
I have seen Zestimates way too high in Los Angeles (for example, nearly a million dollars too high on a house worth less than a million!) and way too low in other areas. It will be interesting to see what happens when Zillow gets sued over this nonsense.
- sunnyview
- Contributions:25136
There is information on how they do the Zesitmate here and information on some accuracy rates for different areas here. They tend to be better in some areas that I follow than others, but the worst that I see tend to come from nondisclosure states.
Even in most accurate areas that I follow though, Zillow Zestimates are not appraisals or market values and should not be looked at that way.
Even in most accurate areas that I follow though, Zillow Zestimates are not appraisals or market values and should not be looked at that way.
- user33010
- Contributions:1
In my case I'm not finding the Zestimate too low, I'm finding them unrealistically high. For instance, in the past 6 months two homes very similar to mine sold for $50K to $55K BELOW the zestimate. How they come up with these zestimates is beyond me, but I wouldn't sniff any of them based on where I think they were pulled from.
- billcharb60
- Contributions:1
Zillow is not accurate and that is the big problem. Most people searching for houses go to Zillow or a similar site and when they see the low estimate, in their minds that becomes the selling price. They are upset when the homowner is asking much more that what Zillow posts as an estimate.
They are actually one of the causes for the dilema we are in . They either knowingly put a low value, or do not have enough information on a property and use the lowest value they can find. Banks love this as they now can come in at a lower evaluation and the homeowner either has to come down in price or the buyer is not given a loan based on this erroneous evaluation.
Zillow, you are part of the housing problem!
They are actually one of the causes for the dilema we are in . They either knowingly put a low value, or do not have enough information on a property and use the lowest value they can find. Banks love this as they now can come in at a lower evaluation and the homeowner either has to come down in price or the buyer is not given a loan based on this erroneous evaluation.
Zillow, you are part of the housing problem!
- sunnyview
- Contributions:25136
While I completely agree that buyers should not based their offers on Zestimate, I can't agree that all Zestimates are low or that buyers should trust their agent on what to offer.
Agents have access to the freshest information off the MLS, but buyers should also be asking for a current CMA before they put any offer in to make sure that the comps are there to support the appraisal, that prices on the inventory are not dropping steeply and to know how closed sales are trending.
A good agent can be a great help, but buyers need to ask a lot of questions, weigh the information and then offer what they see as reasonable given the comps and their market.
Agents have access to the freshest information off the MLS, but buyers should also be asking for a current CMA before they put any offer in to make sure that the comps are there to support the appraisal, that prices on the inventory are not dropping steeply and to know how closed sales are trending.
A good agent can be a great help, but buyers need to ask a lot of questions, weigh the information and then offer what they see as reasonable given the comps and their market.
- Phyl1999
- Contributions:1
The Zillow estimates are way too low, period. All of the offers we've made based on Zillow have been refused. Our realtor told us to ignore Zillow because we're looking at a specific school district and Zillow gives no weight to such factors. If you're willing to go with a bank-owned property or short sell, by all means follow information you get from Zillow. Otherwise, go with what your realtor advises.
- Frank Miles, "mrecg"
- Contributions:10
It really depends on where it is. If its in a subdivision where most of the surrounding homes are similar, it can give you a good "estimate." Tax records are the same way. It can be a good "estimate." Tax appraisers don't actually go in the house so they can be off as well.
The best is to speak with a professional: appraiser / realtor.
Most people are asking more than what its worth because the market was higher 4 or 5 years ago. If they bought or refinanced then, they are trying to sell without losing money or still in shock that the price has declined that much.
Does that help?
- acronychal
- Contributions:3
Kevin, no financing yet. Our lease doesn't run out until later this year and my wife and I have been told that pre-approvals are only good for a certain amount of time due to the mortgage rates at the time of the approval. So I expect we will be waiting a few more months before starting that process. By then, our consumer debt will be paid off, and will also have more available in hand for a down payment. I, as anyone, want the lowest possible interest rate and Zillow seems to be a great place to "shop around" without feeling obligated.
- Meghan Tompkins, "mbtompkins"
- Contributions:4
Zillow is an fairly accurate home value estimator. However, Zillow may not take into consideration some updates to the home. Also, it's just an estimate. Local real estate agents typically have additional insight as to property values that Zillow may not and sellers look to their agents to set the listing price of their home. The listing price isn't always going to be the sales price. Often it is simply a starting point for negotiations.
A formal appraisal is a part of the home buying process, but the appraisal typically doesn't take place until a buyer have negotiated an offer on the home. You are correct that the bank will not over lend. An appraisal is a requirement for anyone that wishes to take out a mortgage on a property
- Kevin Pellatiro, "Kevin Pellatiro"
- Contributions:26
Yeah, I wouldn't boycott it – add to it! There are other automated estimators out there and hopefully one day we'll have several attached to every property listing (similar to how RedFin does it). The more information you have, as long as you know the pro's and con's of the info, the better.
Good luck in your search. Have you lined up your financing yet?
- acronychal
- Contributions:3
Thanks everyone! I like zillow so far for the searchability, saveability, pictures, and advice. If there is somewhere else you guys would suggest, I'm open, but I don't think I'll be boycotting it per se for at least these reasons. Thanks again!
~First Time Home Buyer in Training
~First Time Home Buyer in Training
- Kevin Pellatiro, "Kevin Pellatiro"
- Contributions:26
Well, it's honestly because they need the money to move on with their lives. It's not much fun to hear that the largest purchase in your life to date has declined in value at all, but when that amounts to double digit percentages it's even harder for most of us to accept.
That doesn't make a home any more valuable to you as a buyer – and your need to be mindful of TODAY's market values and market movements when deciding what to pay for your home – but that's a very real "on the ground" reason as to why homes seem to be priced above what they are worth in Zestimates.
For the record, in Nashville Zestimates (according to Zillow) might be accurate within 11.6% of a homes value. In neighboring Williamson County, Zestimates might be accurate within 7.5% of a homes value.
- Michael Emery, "MikeEmery"
- Contributions:7297
Zillow Zestimates can either be quite accurate or quite off, depending on the property. They best used as a guideline of value. Only an appraisal (that you pay for) is going to give you the most accurate value of a property.
Why do people ask for more than the Zestimate (or even more than the true value of the property)? Probably because they paid too much for their home in the past 5 years and aren't in a position to lose money.
Right now the majority of properties I am tracking on the market are overpriced when you consider current and future market conditions. The ones that are under priced or fairly priced are the homes that are snatched up by buyers as there are so few sellers on the market with realistic expectations.
Why do people ask for more than the Zestimate (or even more than the true value of the property)? Probably because they paid too much for their home in the past 5 years and aren't in a position to lose money.
Right now the majority of properties I am tracking on the market are overpriced when you consider current and future market conditions. The ones that are under priced or fairly priced are the homes that are snatched up by buyers as there are so few sellers on the market with realistic expectations.
- Stephanie Crawford, "AgentSteph77"
- Contributions:158
It really depends on how accurate the city tax appraisals are, and how much information Zillow has access to in your area. Also, if you live in a homogeneous or cookie cutter area, Zillow has a larger probability of getting it right (Think Cane Ridge or Providence in Mt. Juliet) Whereas if you lived in an older neighborhood with varying styles of architecture and different levels or renovation, it "zestimates" would tend to be a little more off (think East Nashville or Green Hills).
How accurate is the Zillow Zestimate?
~First Time Home Buyer in Training
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