We’re seeing some people on Facebook posting about how they might be selling their home and giving home valuations based on Zillow Zestimates and other online home value estimators. This is a source of contention in the industry because we feel that consumers are being mis-serviced by using these online home value estimators as a valuation tool when they have no basis in reality.
Today we’ll prove there is a wide range of numbers from these different online home value estimators and there is really no way to determine which one you should believe and which one you shouldn’t. We’ll also delve deeper into the range of accuracy that these sites themselves state they provide.
First off, did you know there are multiple online home valuation tools out there besides Zillow? How do you decide which one to pick? Trulia? Zillow? Chase Bank? Today we’ll look at these three online estimators.
I’ve picked a home in our neighborhood to give you an idea of what this looks like. We’ve been in this home and analyzed it’s worth to be $475,000.
- -Chase Banks Home Value Estimator says this home is worth between $333,000 – $407,000.
- -Trulia’s Home Value Estimate for this same home is $344,000.
- -Zillow’s Zestimate for this same home is $413,891.
What site should we believe to be accurate? The truth is, these sites never tell you how they come up with these numbers, but we know the majority of their analysis is based on tax assessment data which is a trailing indicator to current market conditions.
Let’s take a look at how off Zillow is with their Zestimates. If you dig a little on Zillows website, you’ll find that they have a “Zestimate Accuracy Table” which gives stats on how inaccurate their Zestimates really are. This data shows Zillow’s website has 1.5 million homes in the Boston area with Zestimates, and of these homes, 37% of the time their Zestimate is within 5% of the homes actual Sale price. So, this tells us, if your home is really worth $500,000, Zillows Zestimate can be anywhere between $525,000 and $475,000 which is a $50,000 range.(and that is only one third of the time!)
62% of the time their Zestimate is within 10% of the homes actual sale price. So if your home is really worth $500,000, the Zestimate could be anywhere between $550,000 to $450,000, which is a $100,000 range.
85% of the time Zillow claims to be within 20% of the actual sale price of the home. So if your home is really worth $500,000, Zillow’s Zestimate can be anywhere between $600,000 and $400,000. Does this sound like reliable information? We don’t think so! Would you hire a Realtor with these results?
Basically, Zillow, Trulia, Chase Bank, and all of the other online home value estimators are the real estate version of WebMD. You wouldn’t go to WebMD, diagnose yourself, and then treat yourself. You would call a doctor.
This is why we have this great industry called Realtors and Real Estate Professionals. Full time, skillful agents will help you analyze the marketplace, analyze your property type and condition, and determine based on your motivation to sell, what a good pricing strategy will be.
Another secret about these online home value estimation websites that you may not know is they are built to sell advertising space to Realtors. They are using the real estate community, using our listings so ultimately we’ll buy ads on their website because we know consumers are going there to look at homes.
So, do yourself a good service and find a good Realtor to give you solid advice.
For over 30 years the Prime Property Team and Ron Carpenito of Keller Williams Realty Andover have been helping home buyers and sellers in Andover, North Andover, Haverhill, and the Merrimack Valley with their real estate goals. If you’re thinking of buying or selling a home anywhere in Massachusetts or know someone who is, contact Ron today at (978)494-0346.
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