Property value estimate Thead

I wanted to start a thead for those that don't understand the Zestimates on this site. All borrowers, realtors and lenders please chime in.

It seems no one understands that the value of the homes on here are ESTIMATES and may not reflect what an actual appraisal will go for. The appraisal may come in lower or higher than the Zestimate. Zillow as well as other sites out there try and give you a general idea based on recent sales in your area but an actual appraisal will determine the real value since they are researched by an appraiser in-depth.

If you are refinancing or purchasing a property we (lenders) will begin the process based on what you think your proeprty is worth. We will use these sites as gauge of what it MAY be worth but once you pay for an appraisal and it is completed it will show the actual value whether it is higher or lower than what you think it may be worth.

Please feel free to chime in whether you are a borrower, lender or real estate agent and want to share some informtaion on this. I am seeing way too many people complaining about thier homes ESTIMATED value on hereandjust want to shed some light for them
  • February 28 - US
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Answers (8)

I think the important thing for homeowners to realize is that Zillow is pulling info from the public records, so won't know about seller concessions, repairs, condition of the home, etc...   An appraiser will do the research into all these factors when choosing comps and assessing a properties value.

The other thing that I see is that Zillow gives you sales prices of homes from up to 2 or 3 years ago. An appraiser is only going to consider recent home sales. If market values are rising (like San Diego has seen the past 2 years), the Zillow value is usually much lower than the appraisal value.

I always tell people that Zillow is a great place to research home sales in your neighborhood, but that they should ignore what the Zestimate says.
  • February 28
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"I never know what will be deleted and I want to keep it ethical on here." -

ALL links to your own website will be deleted.  All "marketing" links will be deleted.  All links to Zillow pages (except one's own quotes or own listings, or own profile page) will remain.

All links to government information pages (like HUD.gov) will remain.

Most links to media publications will remain, but it will depend on whether it looks like it may be a "self promotion" or not.

Links to data sources such as mortgagenewsdaily.com, or bloomberg.com, or bloomberg.econoday.com, or marketwatch.com  tend to stay.  They are not linked for marketing nor promotion.

Most links to youtube will remain, but it does depend on the content of the link

For some examples, see the thread:
rates on the move again
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Thanks for the input Pasadenan and link for borrowers to go to and yes I agree and it's scary that some realtors have the misconceptions with the site.

Ok maybe not dozens a day but certainly a hand full a day haha. I think you understand my point though.

I would have posted a link on here but I never know what will be deleted and I want to keep it ethical on here.
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"Dozens" of new threads on this issue each day?  I've been looking at that for over 6 years on this site, and it is typically an average of 2 new threads on the issue per day, out of an average of 120 new threads total per day.  Out of over 50 MILLION users of the website.  Yes, some home owners just like to complain.  The bigger issue is the Realtors® posting their misconceptions on the issue.
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If you really want to provide info for those that don't understand the Zestimates, then point them to the FAQ that addresses MOST of the issues:
what is a Zestimate

Yes, there will always be a number of people complaining, regardless of what they read.  Yes, there will always be a percentage of people that completely ignore disclaimers and 70% confidence intervals and posted tolerance ranges.  Yes there will always be people expecting to get a "free appraisal" and find some magic formula to get the present market value from a couple variables, like square footage.  Yes there will always be some agents incorrectly stating that if you get a free CMA it will replace the Zestimate.  Yes, there will always be some agents that think their CMA's are the "present market value" with a tolerance range of +/-$1.  Yes there will always be some agents that think Zillow's method uses "comps" since that is what agents do.  (Zillow does not).

For the details of how Zillow does their estimates, see their patent:
US Patent #8,140,421

It is a non-linear neural network learning model method of multiple variables with separate models for housing type and each county and various missing data.
  • February 28
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Exactly Eric! I see at least a dozen on this subject per day and I believe if the general public coming on here reads a thead like this and notices that we as lenders don't put that much into the Zestimate for refi's and purchases it will put them at ease when pursuing a mortgage transaction.

-Scott
  • February 28
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Good Idea Scott - I think it is good to point out again that the Estimate here on Zillow has ZERO bearing on what your home will actually sell for and or appraise for and will have ZERO impact on your transaction.

This is a free site that gives the general public an idea of what a particular home might be worth. Spend your time worrying about your kids college fund or your retirement, or what's for dinner tonight -  anything but your Zestimate number, which is not truly important to your life.  

There are several online tools to get an idea of what a home might be worth and if you are really serious about buying, selling, or refinancing, then you should be in contact with the well-reviewed Real Estate Agents and Mortgage Professionals on this site to get you pointed in the right direction. 

Best of success!
  • February 28
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first.... haha sorry I had to it's Friday
  • February 28
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