By Rick Hackney, Hackney Appraisal Service – 7/2/2017
Zillow is one of the most popular websites for real estate information. You can enter an address and get an estimate of the home’s value called a “Zestimate”. These computer generated value opinions are often taken as gospel and are regularly quoted to real estate agents by buyers to challenge high asking prices and sellers to question low listing prices.
The problem is, the Zestimates are not always accurate, and in resort areas like Big Bear, where every street and house is different, the margin of error can be large. Zillow uses a computer program to determine the value of a home based on information from public records, which are notorious for being inaccurate, and information entered by users, which may be biased. It doesn’t know the idiosyncrasies of a real estate market , not to mention recent remodeling and updates, interior condition, level of quality and charm, view or proximity to recreational attractions and shopping. It doesn’t know about road noise and traffic, or structural problems and deferred maintenance.
I reviewed recent sale prices of 3 randomly selected 3 bedroom, 2 bath homes, and compared them to the Zestimate and range of value offered by Zillow:
In these examples, the sale price fell outside of the Zillow range with a large difference in the Zestimate and final sale price.
There are studies that demonstrate that Zillow can be reasonably accurate on the value of a home in conforming tract developments. However, in a resort area like Big Bear, where you have old and new, large and small homes mixed together, the accuracy can go way down.
As stated in the fine print on the Zillow website, “…it is a starting point in determining a home’s value and is not an official appraisal”. The Zillow help center goes on to state: “We encourage buyers, sellers, and homeowners to supplement Zillow’s information by doing other research such as: getting a comparative market analysis (CMA) from a real estate agent, and getting an appraisal from a professional appraiser…”. Pricing a home properly is an art and science. It is not accomplished by trusting a computer generated value whether it is Zillow or some other online valuation tool.
If you want an accurate value of your home, always consult with a local real estate professional or competent appraiser.
Article originally posted here.