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Zillow uses the property tax information which is always lower.
Well, not always. Sometimes towns tax at a lower percent of full value.
Example:
- Town values your house at $100,000 at $10 per thousand = $1000 year taxes
- Next year, town values your home at $100,000 but tax rate goes up to $13 per thousand but the town is only taxing at 80% value = $1040 taxes ($40 increase)
In this example, the town realizes property value has fallen but doesn't have to re-evaluate the assessments of the entire town which costs a lot of money.
The problem with Zillow is that you don't know when you can rely upon it, or not. That makes it useless.
I'm an appraiser and have this discussion with homeowners all the time. Those homeowners whose Zillow estimates are close to my appraised value think it's the greatest thing. But they're obviously not aware of the millions of other homeowners whose estimates are way off.
Better yet, read a major newspaper and find a house that just burned down yesterday. See what Zillow thinks it's worth. Same with the houses that were destroyed or damaged in Sandy.
One thing I like about it is how it shows what was originally paid if it is a newer resale house.
When I sold my house in Florida, the value was pretty close. However, if someone did upgrades it won't be reflected. It's the price of the house and land without anything in it.
It is within 5-8% or so for the new house we purchased 1 yr ago.
It's going to be most accurate for recent sales because they have a good starting point. I can't recall if the keep their historical estimates online, but it would be interesting to know what sort of value they had on the house prior to you purchasing it.
I just refinanced my home, this is the first refinance I've done. I contacted 2 banks and 2 brokers. Both brokers told me the most reliable way to figure out what my home will appraise for is using Redfin.
I like Redfin, but thought OK, that makes no sense. I went to Redfin's site and they pulled together comps they felt were accurate, which to me seemed about as accurate as I'd expect Zillow to be.
I checked on Zillow, and their estimate was 511k. My 2 neighbors with same sized homes in a small community built at the same time by the same builder on the same plots of land, have Zestimates of 550k or so. Redfin, even after I tweaked their comps, estimated my home was worth 535-565k, based on condition.
Fast forward, I ended up refinancing through a bank and not one of the brokers. The appraisal came back exactly in line with Redfin. It appraised for 530k, and the appraiser said once we finish remodeling (kitchen, deck, finishing out room above garage) it would appraise for 575k.
So they were both close, on different sides of the price. My expectation, however, the Zestimate for my home won't change after making the remodels.
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?
Chances are Zillow is right with a spread like this.
I don't think zillow is completely useless with their estimates. In fact on each listing there is a lot of more useful information than their estimate like the tax history, previous sold prices, and links to nearby homes for sale. I think the zestimate is just a marketing trick to get people to look at their site and for realtors to pay for promotion on their site. In my opinion the most useful info on the site is the tax history. The tax history lets you know whether or not it is worthwhile to investigate the public records on the house further and pull the previous assessments on file with the county.
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