By: Tony Meier
There is much talk about Zillow and the accuracy of their Zestimate valuations. Their site has caught the attention of many who want to know what their friend, boss, co-worker or neighbor’s home is worth. Unfortunately, there valuation model is not very accurate. To Zillow’s credit, they say "Our data shows that the majority of our Zestimate home valuations are within 10% of the selling price of the home."
Unfortunately, like most things… the more people read about it, talk about it, the more they believe it is true. So it goes with Zillow’s Zestimates. Recently, I read a craigslist ad for housing wanted which read "will buy your home for up to 85% of the Zestimate". Even if an owner of a property was willing to sell their home at a 15% discount, if they based that discount on Zillow’s estimate – they could be leaving some seroius cash on the table. How much you say… well let’s look at a recent closing on English Hill in Redmond.
According to the NWMLS, this property was listed on 3-30-07 for $645,000, they accepted a full price offer on 4-7-07 and it closed on 5-15-07.
|Listings as of 05/24/07 at 11:27am Listing # 27052593|
A quick check of Zillow today showed the following…
This Zestimate was last updated on 5-16-07 and it shows an upward change of $11,925 within the last 30 days. This would have put the Zestimate at $590,214 at approximately the time the seller received their full price offer of $645,000. A quck check of the math shows the home sold for 9.28% more than the Zestimate showed at the time of sale. Within Zillow’s 10% margin of error… yes. Acceptable for buyers and sellers to use as valid information to make a real estate decision… no!
I have to admit Zillow is fun. It is quite novel to be able to check out most any home. But until it’s information becomes accurate, it is just that… a novelty at best. It does not replace the need for the professional opinion of a skilled & experienced Realtor or Appraiser.
Seattle’s Eastside Real Estate Resource