Occasionally we hear comments from home buyers & sellers about Zillow’s Zesimate for a property. For the most part, sellers in our area understand that Zillow does not factor in long range mountain views, the price differential for above grade vs. below grade square footage, flat acreage vs. acreage so steep you’d need to be part goat to navigate the grade. Locals in our area have become familiar with the unique properties we have and the lack of cookie cutter homes in sprawling communities. Buyers on the other hand, coming from areas like Texas or Florida where national homebuilders are the norm, tend to place a greater value on the Zestimate from Zillow and often think in terms of price per square foot. Having lived in Florida for 40 years, I’m familiar with the large tract communities with 700 homes or more. A Zestimate for a home surrounded by similar size homes, built within a year or two of each other and with very similar features, tend to have a Zestimate that might be more accurate.
After all, Zillow itself admits to a national median error rate of about 8 percent, which means that half of the Zestimates are off by more than 8 percent. So for homes with Zestimates of $400,000, only half those homes are going to sell inside a range of about $368,000 to $432,000. The other half is worth more or less than that range. And that’s a $64,000 range! I don’t know about you, but I’d want my real estate agent to be a bit more accurate than a $64,000 spread if I was buying or selling a home.
And here’s the icing on the cake! According to a recent publication on Inman.com (written by Teke Wiggin), Zillow’s CEO, Spencer Rascoff, sold his house for 40 percent less than his Zestimate! The sales price was $1.05 million and the Zestimate was $1.75 million! This shows the real value or “lack of value” of today’s automated home pricing valuation programs. When a discrepancy this large comes into play, there is something to be said of the value we as licensed real estate professionals can provide to our clients. (Sources in links.)
On June 14th 2016 we listed a home for sale in Weaverville, NC. The property appeared on Zillow with all of our listing data, our contact information and a Zestimate for $462,263. One June 15th 2016, the Zestimate was updated to $495,610, an increase of $33,347 or over 7%.