And why you really need a REALTOR to place an accurate value on your home.
Zillow is one of the most popular websites today for real estate agents to market their listings and for home buyers to search for their next home. Along with an easy-to-use interface to search for homes, Zillow provides what is known as a "Zestimate," or Zillow-provided estimate of value for the home.
This Zestimate is meant to give homeowners a general idea of what the home is worth based on an algorithm that Zillow has developed based on public records information, market environment, and recent sales. The Zestimate is also meant to give buyers an idea of how well a home is priced that is for sale - and if there is room for negotiation on listed price.
But how accurate are these Zestimates really? Not that accurate. Here are a few reasons why:
Zillow has no way of knowing what the condition of a home is like. For example, say there were two houses on the same street for sale. They were both the same type of model home built by the same developer. The public record facts (square feet, bedrooms, baths, etc) are nearly identical. However, Home X was really cared for well and upgraded by the previous owners. There is a large deck in the backyard, finished basement, granite counter-tops, tile floor in the kitchen, hardwood floors in the foyer, updated fixtures, beautiful landscaping, and neutral decor throughout. Home Y was not cared for well. The previous owners did no upgrades. The same linoleum kitchen floor, carpet in the family room (which is now very stained) and builder grade fixtures are still in the home. Well, they did do some improvement. Those bright orange walls in the den do make quite the statement!
The point is, for all Zillow knows these homes are worth the same amount, when clearly on today's market the upgraded home would be worth more because of its condition.
Another factor Zillow cannot account for is location. Zillow does not know if you have high-tension wires in your back yard or a beatiful view of mountains and rivers. Zillow does not know if a home sits on a busy main road or the end of wooded lane. Location, as they say, is everything, but yet is meaningless in a Zillow Zestimate.
Can be Tampered With
A Realtor or homeowner can go into a property on Zillow and update the information on a home. Eventually this new information will have an affect on the Zestimate. While sometimes useful to correct a true error, it can be used with malicious intent. A homeowner could add in an extra bedroom or a couple extra hundred square feet and the Zestimate should eventually reflect that. If they ever do list it with a Realtor, an honest Realtor should correct that, but even if they do the Zestimate change is not immediate.
It's Just Math
In the end, the Zestimate is really just the result of a mathematical equation. It is based on a formula that Zillow has put together. So many different factors go into the make-up of a true value on a home, it's impossible to arrive at an accurate value by just a little arithmetic. Truly, the best way to get a value on your home is to have a professional Realtor do a competitive market analysis on your home: they will know the market for your area, the condition of your home, and how it compares to other listing that are available or that have recently sold.
If you are interested in finding out how much your home is REALLY worth on today's market, call us today at 215-855-5600 or email us an email at firstname.lastname@example.org to get connected with a Realtor to look out for your best interest.