Should You Trust Zestimate?

A few days ago I was showing property to an out of state buyer when I noticed his spreadsheet on the homes we were previewing had a Zestimate Value column.

What is a Zestimate: (Definition from Zillow)

The Zestimate® (pronounced ZEST-ti-met, rhymes with estimate) home valuation is Zillow’s estimated market value, computed using a proprietary formula. It is not an appraisal. It is a starting point in determining a home’s value. 

The Zestimate on my buyers spreadsheet was substantially lower than the listing prices of the homes we were previewing which peaked my curiosity.  It’s critical to have accurate data in order to make an informed decision about buying a home.  No one wants to pay more than necessary to obtain their dream home nor do most want to insult the seller of a home with an unrealistic offer.  Knowing what’s happening in the the current market is crucial! 

How is it that Zillow could obtain sold data on Idaho homes when Idaho is a non disclosure state? Non disclosure states do not publish sold prices for public record. I decided to do a little research.

Using information from our local data base, Intermountain Multiple Listing Service, I found recent sold homes and compared them with the Zestimate value on Zillow. In every sample the numbers were far apart.

Here is one example of a home that I recently listed and within a couple of days secured a full price offer. This particular home was listed just a little under average square foot price for the neighborhood.

Image

Listing & Offer Price: $499,000
Zestimate Value:       $414,894

That’s a pretty substantial gap!

If you want to know what a home actually sold for, you need to call a Realtor. As a Realtor, I can look up that information for you in our MLS system. When we input a home into the MLS and that house sells, we are required to report accurate sold information.

I was able to provide my buyer using the Zestimate Value accurate data about our current home market. Happily, we secured a new home for him and he is excited to move his family to Idaho.

If you are looking to buy or sell a home and want accurate data to help you make an informed decision, your best bet is to call a Realtor.

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