Please don’t rely on a Zestimate when valuing your house.
It’s so easy and tempting to type in your address and get an instant Zestimate, or an estimate of your home’s value according to Zillow. The problem is, this number could be grossly over or under stated.
1. The Zestimate doesn’t take into account the condition of your home. You could have a new kitchen or screened in porch which would add value to your home. Your home will be compared to a home with similar attributes (3 bedrooms, 2 bathrooms), but they could be worlds apart in updates and improvements.
2. Zillow relies on an algorithm or “proprietary formula” to arrive at the Zestimate. I don’t see how this algorithm could account for the fact that a home backs up to a highway and therefore its value might be less than the same home on a quiet street.
3. Homeowners themselves can make edits to the Zestimate. Until I became a realtor, I didn’t know what constituted a bedroom, or what counts as finished square footage. Homeowners mean well, but aren’t licensed to make those distinctions.
4. The Zestimate doesn’t reflect concessions at closing. Instead of making repairs during due diligence or escrow, sometimes the homeowners offer money back to the buyer at closing, and these concessions in fact lower the true value of the home.
5. There are lags in updated information to Zillow. A house shows an “active” status when in fact it is under contract in the MLS, or under contract when in fact it has closed. This matters because closed transactions are best for creating comps to value your home correctly.
Therefore, it’s really important to get a realtor to see your home, someone who knows your market and how to account for improvements, someone who has access to up to date information, and someone who uses more than just an algorithm.