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Hi. I'm looking at a house which I consider buying and Zillow.com says it's worth ~$200k. What is the price based on? Can I take it as a good estimate?
I did a case by case examination of one month's sales in my town back in October 2011. Zillow was off by 99% in the most extreme of the example sales. Same with the Property Appraiser's stated market value. That post from last year below:
"I often see buyers, sellers and their agents using Zillow as confirmation of their opinion of value, when that Zestimate happens to coincide with their opinion. Is it an accurate estimate and should it be taken as credible? Let's look at recent sales and see just how accurate Zillow was with their estimate of value right before the sale. I used the first page of results for recent residential sales on Zillow (22 sales) of properties in Cocoa Beach for my research.
Of the 22 recent sales the Zestimate immediately prior to the sale was within 5% of the selling price for seven properties. Not bad. Five of those sold for more than the Zestimate and two sold for less. Another five sales landed between 5% and 10% of the Zestimate. All but one of those five sold for more than Zillow's estimate. That means that slightly more than half (55%) of recently sold properties closed within 10% of the Zillow estimate of value, all but three closing for more than the estimate. That means in a broad sense that we can trust Zillow to be within 10% around half the time.
What happens the other half of the time? The skew gets extreme. Four estimates were 20% or more off the closing price, all of them closing for more than the Zillow estimate. One closed for 20% more, one for 35% more, one for 85% more and one property that had a Zestimate of $163,000 sold for $325,000. That's 99% higher than Zillow's published estimate of value.
What does this mean for a buyer or seller of property? Feel free to use the Zestimate as substantiation of your opinion of value if it is to your benefit but don't place any value on it other than as a tool when negotiating with an uninformed party. Don't be surprised if your opponent rejects it as she may have done her own research or may be a reader of this blog."
Several factors involved, one is what state it is in. Some states are non-disclosure so no one, not even the tax assessor, knows what the sold price was unless they are a realtor with MLS access. Many seem to think Zillow is not very accurate.
You would do better to have an agent pull recent comps for you.
Ask yourself this question. How can Zillow possibly come up with an accurate estimate? Then you will realize it is pretty much garbage.
Very true, and the problem is that Zillow are allowed to peddle such nonsense valuations the way they do without the homeowner having any right of appeal to get the garbage zestimate corrected or deleted. It is time that our elected representatives introduced some form of regulation to protect homeowners from these erroneous valuations in the same way that the SEC protects investors or the Utility commission protects consumers from greedy electricity generators.
You might also find the attached thread interesting as well
Location: Mokelumne Hill, CA & El Pescadero, BCS MX.
6,957 posts, read 22,313,597 times
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Zillow tells me my house gained 5K in value last month. With their estimate being fairly close to Brandon's broken clock. It's probably pretty close to being right for the first time in 5 years.
That being said, their estimate ranges from a low of $137K to a high of $299K a variation of $162K!
Really?
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