What is a Zestimate? Zillow's Zestimate Accuracy (2024)

FAQs

What is a Zestimate? Zillow's Zestimate Accuracy? ›

The Zestimate® home valuation model is Zillow's estimate of a home's market value. A Zestimate incorporates public, MLS and user-submitted data into Zillow's proprietary formula, also taking into account home facts, location and market trends. It is not an appraisal and can't be used in place of an appraisal.

Zestimates may not reflect improvements, mistakes in property taxes paid, or exceptions to tax assessments. Since Zestimate also accounts for turnover rate, estimates for homes kept long periods of time may not be accurate.

The median error rate for a Zillow Zestimate is 7.5 percent higher than the property's actual value at the time of sale while Redfin's residential home value estimator is only off by 1.5 percent from the actual sales price.

The Zestimate is often less accurate than your Realtor's estimate and can be thousands of dollars off. According to Zillow's Zestimate page, “The nationwide median error rate for the Zestimate for on-market homes is 1.9%, while the Zestimate for off-market homes has a median error rate of 7.5%.

Redfin is more accurate when valuing homes.

Both Zillow and Redfin give homes an approximate value, but the Zestimate provided by Zillow has proven slightly less accurate than Redfin's estimate. Final numbers depend significantly on the local market and demand for a property in your particular location.

How accurate is the Zestimate? The nationwide median error rate for the Zestimate for on-market homes is 2.4%, while the Zestimate for off-market homes has a median error rate of 7.49%. The Zestimate's accuracy depends on the availability of data in a home's area.

1. Redfin. The most accurate home value estimator is Redfin as it uses historical pricing data and also considers real-time demand and market trends. Redfin estimates are more accurate than Zillow, and the interface is intuitive, making it easy to find exactly what you're looking for.

How accurate is a Zillow estimate? On a macro level, the accuracy of Zillow estimates is pretty high. It's impressive that an algorithm can estimate home values on a national scale within a 2.5% margin of error. However, most home sellers are concerned about the accuracy of Zestimates on a micro level.

The real reason is that the zestimate is trending up. I can't help but thinking that zillow's recent entry into buying and selling real estate through instant offers has anything to do with it. Zillow recently has started buying and selling properties in Denver.

How to change your Zestimate. One of the easiest ways to change your Zesimate is by editing your home's facts on the site. A real appraiser will look at the features of your home to decide it's worth. Now you can update your home facts in Zillow to reflect some of the things an appraisal would typically show.

How do you know if a house is overpriced? ›

By spring of 2021, the market had overheated to a point where Zillow's much-lauded algorithm, the backbone of its home-flipping strategy, was struggling to make accurate pricing predictions. Believing its own inflated numbers, say analysts, the company began overpaying for homes all across the country.

If your home has more value-factors (bigger square footage, better condition, more amenities, etc) than the comparables that are pulled, then your Zestimate is likely to be lower than actual value.

Is Realtor.com or Zillow more Accurate? This is another frequently asked question from home sellers and buyers. The main difference between Realtor.com home values and Zillow Zestimates is that Zillow uses its own program to create a Zestimate, while Realtor.com uses several 3rd parties to provide multiple home values.

If you believe your home's estimated value is inaccurate, you can contact the companies with updated information to correct it or sometimes fix it yourself online.

Zestimates are a pet peeve for many real estate agents when they differ from the asking price or the actual appraised market value of the home. They can confuse buyers who are trying to figure out what they can afford and sellers determining an asking price for their house.

Redfin's home value estimator is more accurate than Zillow's when it comes to pinpointing the sales price. According to Redfin, its estimates are approximately 74% accurate within 5% of the sales price for listed homes. By comparison, Zillow is only 67% accurate within 5% of the sale price for listed homes.

You can't directly change your Zestimate, but you can influence it by updating your home's information. To update your Zestimate, you need to claim your home on Zillow, then update key information such as number of bedrooms, bathrooms, and square footage.

Zestimates for all homes update multiple times per week, but on rare occasions this schedule is interrupted by algorithmic changes or new analytical features.

Zillow is among the most popular home value websites, and its Zestimate for on-market homes (meaning, homes that are currently listed for sale) has a median error rate of 2.0% as of February 2022. This is pretty good! And bonus points for the company's transparency in explaining how their models work.

How can I guess the value of my house? ›

You can determine home value by using an online valuation tool, hiring an appraiser, using a real estate agent, or checking comparable homes in your area. Using an online valuation tool or pulling comps in your neighborhood is easy and quick, but you'll receive more accurate results using a REALTOR® or appraiser.

Zillow is the best overall home value estimator available. It is user-friendly and requires no log-in details. Its home value estimator is called the Zestimate, which provides an approximate value for your home based on public and user-submitted data.

Competition with real estate agents: Zillow operates a platform that allows consumers to connect with real estate agents, and the site earns revenue from leads generated through this platform. Some real estate agents see this as a threat to their business, as Zillow is essentially competing with them for clients.

Home sales in your area are affecting the data

Zillow relies on data from neighboring homes to calculate your home value. If homes in your area are selling for under market value, that will affect your estimated home value.

Non-disclosure state — Your home is in a “non-disclosure” state (Idaho, Indiana, Kansas, Louisiana, Mississippi, Montana, New Mexico, Texas, Utah, and Wyoming) where transactions are not publicly reported and therefore, we do not have enough data to create a Zestimate.

There's an acceptable variance when it comes to home appraisals. It usually depends on the prevailing market conditions. In markets with favorable conditions, the difference should be between 2% and 3% of the other values. For markets with challenging conditions, a 10% difference may be acceptable.

Like any free tools, Zillow and Redfin's valuation estimate tools are not 100% reliable. Homeowners upgrade homes over time, some neighborhoods have homes with comparable attributes, while other homes are more spread out and very different from their nearest neighbors.

Most of the time, Zillow and Redfin have different estimates for your house because they have slightly different approaches to calculating home values. However, if there's a big gap between your Zestimate and Redfin Estimate, it may mean that one company has inaccurate information about your home.

No, but you can update your home facts and fix any incorrect or incomplete information to ensure that your Zestimate is as accurate as possible.

Spring is typically when most home selling activity begins, but home sales really heat up in the summer months. Real estate is all about location, though, and where you live may have an impact on the peak selling season for your home.

What justifies higher house prices? ›

Demand has long exceeded supply of homes for sale in California, and that's especially true now. But while many families are suffering the economic impacts of COVID-19, wealthier households with money to spend and capitalizing on low interest rates have driven up prices even more.

After your home is listed, your real estate agent can schedule showings and greet potential buyers when they visit the property. Although the average home sits on the market for about 22 days, it could take more time or less before you accept an offer. The days on market can also depend on when you list your home.

Zillow, an online real estate marketplace, recently shuttered its Zillow Offers business because of failed iBuying algorithms. A derailed algorithm on property valuations led the company to reduce the estimated value of the houses it purchased in Q3 and Q4 by more than $500 million.

Often, these scams involve properties being listed for rent on the internet by scammers who do not own the properties or don't have the authority to rent the property out. Scammers often list properties on websites like Zillow, Craigslist, or Facebook. This scam can take different forms.

Zillow was unable to accurately forecast the price of homes and said the business ultimately required too much capital. Now, Zillow users will still be able to get an instant cash offer for their home, but the transaction is facilitated by Opendoor.

Zillow Zestimates are automated, so you won't be able to directly edit your Zestimate. But you can update detailed information about your home, such as amenities, square footage, or remodeling, which Zillow will take into account.

Some factors, such as property maintenance and improvements, are in your control. Other times, factors outside your control, such as the property market, natural disasters, and changes in your neighborhood, might be bringing down the value of your home.

A virtual tour is a must-have and may actually help your listing get more views and saves. Based on data collected between November 2021 and January 2022, listings with a Zillow 3D Home® tour got, on average, 43% more views on Zillow and were saved by buyers 55% more than listings without.

Zestimates are generally quite accurate. The median error rate for the Zestimate of U.S. houses on the market is just 1.9 percent. The median error rate for houses that are not on the market is higher, at 6.9 percent, but still close enough to do your preliminary planning.

The Redfin Estimate is highly accurate, with a current median error rate of just 2.10% for homes that are for sale, and 6.41% for off market homes. This means that when a home that is currently on the market sells, the Redfin Estimate will be within 2.10% of the sales price half of the time.

Is Corelogic accurate? ›

Instant, highly accurate valuations on more properties

Our market-leading AVM (Automated Valuation Model) delivers a high level of accuracy and hit-rate, including for hard-to-value properties.

What is a ZestimateⓇ? Zillow's Zestimate is an estimate of value using a proprietary formula created by the online real estate database company. Zestimates cover more than 100 million homes across the United States. A Zestimate is calculated from physical attributes, tax records, and user submitted data.

The Zestimate is not an appraisal and it should be used as a starting point. We encourage buyers, sellers and homeowners to supplement the Zestimate with other research such as visiting the home, getting a professional appraisal of the home, or requesting a comparative market analysis (CMA) from a real estate agent.”

Most of the time, Zillow and Redfin have different estimates for your house because they have slightly different approaches to calculating home values. However, if there's a big gap between your Zestimate and Redfin Estimate, it may mean that one company has inaccurate information about your home.

Updating appliances or any major systems, like plumbing, electrical or HVAC, can be costly, so if yours are outdated, it could affect the overall value of the home. And if the interior hasn't been changed for decades, it may not appeal to buyers, which can also cause the value to decrease.

It's also important to note that automatic valuations such as a Zillow Zestimate are not used by banks or lenders to estimate a property's value for a mortgage. Only an appraisal from a licensed appraiser can be used for a mortgage.

It's likely that all homes have a lower estimated Zestimate than actual value. So, on the basis of time frame, Zillow is picking bad comparables. If your Zestimate includes homes that were sold over 3 months ago, that's going to be one key reason your Zestimate is so low.

If your Zestimate is off, it might be because Zillow is missing some information about your house. Fill in the gaps by accurately describing the features of your house, checking off all of your home's amenities in your profile, and reporting any updates to a tax assessor.

If you find a fraudulent listing on Zillow, please return to the listing page and click “Report Listing” and select “Listing seems to be fraudulent or illegal.” If you believe you have been scammed, report it to the FTC.

How accurate is a Zillow estimate? On a macro level, the accuracy of Zillow estimates is pretty high. It's impressive that an algorithm can estimate home values on a national scale within a 2.5% margin of error. However, most home sellers are concerned about the accuracy of Zestimates on a micro level.

Why is my zestimate not changing? ›

If the updates are not significant enough to impact the home's value, your Zestimate may not change. Zestimates for all homes update multiple times per week, but on rare occasions this schedule is interrupted by algorithmic changes or new analytical features.

You can't directly change your Zestimate, but you can influence it by updating your home's information. To update your Zestimate, you need to claim your home on Zillow, then update key information such as number of bedrooms, bathrooms, and square footage.