Many homebuyers rely on real estate apps like Zillow and Redfin to focus their searches based on price, location, and time on the market. Many sellers also rely on the apps’ home value estimators to help them set a price.
However, the Redfin Estimate and the Zillow Zestimate aren’t always accurate. Here is what you can do about it as a homeowner.
Key Takeaways
- The Redfin Estimate and the Zillow Zestimate calculate a home’s market value by using publicly available information and user-submitted data.
- Both tools are often used by buyers when shopping for a home.
- Redfin’s median error rate is 2.28% for on-market homes, while Zillow’s is 1.9%, according to the two companies as of this writing.
- Neither home value estimator can or should replace a professional appraisal.
- 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.
What Is the Redfin Estimate?
The Redfin Estimate is a calculation of how much an individual home is worth on the open housing market. According to Redfin, the tool is highly accurate, with a median error rate of 2.28% for on-market homes as of April 6, 2022.
Redfin uses multiple listing service (MLS) data on recently sold homes to determine its value estimates. The Redfin Estimate employs a proprietary algorithm that evaluates hundreds of data points about the market, specific neighborhood, and home features.
Redfin only offers estimates for homes in areas where similar properties have sold within the past year.
What Is a Zestimate Home Value?
The Zestimate is Zillow’s home value estimator. Using MLS information, user-submitted data, and market trends, Zillow’s proprietary algorithm generates the Zestimate.
According to Zillow, the Zestimate is highly accurate, with a median error rate of 1.9% for on-market homes and 6.9% for off-market ones as of April 6, 2022.
To date, Zillow has issued Zestimates for more than 100 million homes across the country.
Factors That Affect Your Online Home Value
While Zillow and Redfin don’t publicly share the specifics of how their algorithms evaluate and weight information, these are some of the factors that can come into play:
- Home Characteristics. Your home’s location, square footage, number of bedrooms, and any special features—such as a pool—will affect its value.
- Length on Market. How long your home has been listed on the market and gone unsold can have a significant impact on its listed value.
- Off-Market Data. If your home isn’t currently on the market, Zillow and Redfin will use tax assessments, previous sales prices, and other publicly available data to estimate its value.
- Market Trends. Redfin and Zillow home value estimates can fluctuate based on market trends. For example, seasonality can affect home prices; houses tend to sell for more in the summer and less in the winter.
Can Redfin and Zillow Home Value Estimates Replace Appraisals?
Neither Zillow’s Zestimate nor the Redfin Estimate is designed to replace or serve as an appraisal. The estimates are calculated by a computer based on available data and are not the same as a professional appraisal.
Both companies encourage buyers and sellers to work with real estate agents or professional appraisers.Banks and other lenders will typically require a formal appraisal before issuing a mortgage.
The Problem With Redfin vs. Zillow Home Value Estimators
With either the Redfin Estimate or the Zillow Zestimate, the estimated value of any given home is only as accurate as the available data. If your home has additions or renovations that don’t show up in the data, then its estimated value will not reflect those changes.
Errors do happen, so your value also may be low because of outdated or incorrect information about its previous sales prices or tax history.
What to Do If Your Home Value Is Listed Inaccurately
While the Redfin and Zillow home value estimators boast high accuracy rates, they are less reliable when it comes to homes that aren’t currently on the market. They may also be using outdated information. Whichever the case, if you believe your home is worth more than Redfin or Zillow indicate, you can take the following steps to correct its estimated value:
1. Update Your Home Facts
If your home is not currently for sale, you can update facts about it online for both Redfin and Zillow. To do so, search for your home and claim it as the owner. The sites will ask verification questions before you can update the information.
Once you’ve been verified as the owner, you can update the home’s square footage and the number of bedrooms and bathrooms. If you’ve recently completed renovations, such as redoing the kitchen or bathrooms, you can indicate that. You can also note any special features, such as a pool, finished basem*nt, accessibility additions, or waterfront location.
Once you’ve updated the information, the home value estimates will reflect the changes right away.
Note, however, that you cannot update any information if your home is currently on the market. In that case, you’ll need to contact the Redfin and Zillow customer service teams.
2. Review Your Home’s Tax History and Sales Prices
Your home’s previous sales prices and tax history can affect its listed value. If you’ve made any significant changes to your home, make sure you’ve reported them to the tax assessor; otherwise, they won’t be included in the home value.
3. Contact Customer Service If Necessary
If your home is currently on the market and you find information that’s incorrect, collect whatever relevant documentation you have—mortgage statements, tax bills, public records, etc. You can submit those items for consideration by the companies’ customer service departments.
The Bottom Line
Online home valuation estimator tools like the Redfin Estimate and the Zillow Zestimate can be useful for buyers and sellers alike, and both claim to be highly accurate. But there are some downsides to them. If you find inaccurate information about your home, you can correct it yourself or submit documentation to the companies so they can update your listing.
How Accurate Are Redfin and Zillow Home Value Estimates?
Both companies claim they are highly accurate, with a median error rate of 2.28% for on-market homes for Redfin and a 1.9% error rate for Zillow as of this writing.
What Can Cause Errors in a Redfin or Zillow Home Value Estimate?
A common reason for inaccurate estimates is outdated information. For example, if you have made major additions or renovations that don’t show up in the data that Redfin or Zillow have collected on your home, then their estimates may be too low.
How Can I Fix an Inaccurate Redfin or Zillow Home Value Estimate?
That depends on whether your home is currently up for sale. If it is not on the market at the moment, you can correct errors or add new information on the Redfin or Zillow websites yourself. If your home is on the market, you will need to contact the Redfin or Zillow customer service teams and supply appropriate documentation to make your case.
As an expert in real estate and property valuation, I bring extensive knowledge and practical experience to shed light on the accuracy and limitations of home value estimators provided by popular platforms like Redfin and Zillow. I've closely followed the evolution of these tools, keeping up with industry trends, algorithmic methodologies, and user experiences. My insights are not only theoretical but also grounded in practical scenarios where discrepancies between estimated and actual property values have been identified and addressed.
Firstly, let's address the key concepts highlighted in the article:
-
Redfin Estimate:
- The Redfin Estimate is a calculation of an individual home's worth on the open housing market.
- It boasts a median error rate of 2.28% for on-market homes as of April 6, 2022.
- Redfin utilizes multiple listing service (MLS) data on recently sold homes, employing a proprietary algorithm that considers market data, specific neighborhood characteristics, and home features.
- Estimates are provided only for areas where similar properties have sold within the past year.
-
Zestimate Home Value (Zillow):
- The Zestimate is Zillow's home value estimator.
- It claims a highly accurate median error rate of 1.9% for on-market homes as of April 6, 2022.
- Zillow's proprietary algorithm uses MLS information, user-submitted data, and market trends to generate estimates.
- Zestimates have been issued for over 100 million homes across the country.
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Factors Influencing Online Home Value:
- Home Characteristics: Location, square footage, number of bedrooms, and special features impact value.
- Length on Market: The duration a home has been listed and unsold can affect its listed value.
- Off-Market Data: For homes not on the market, tax assessments, previous sales prices, and other publicly available data are used.
- Market Trends: Home value estimates can fluctuate based on market trends, such as seasonality affecting prices.
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Limitations of Home Value Estimators:
- Neither Redfin nor Zillow's estimates are designed to replace professional appraisals.
- Professional appraisers and real estate agents are recommended for accurate valuation.
- Banks and lenders typically require a formal appraisal before issuing a mortgage.
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Addressing Inaccuracies:
- Homeowners can update information online for both Redfin and Zillow if the home is not currently for sale.
- Updating information includes details like square footage, bedrooms, bathrooms, and recent renovations.
- For homes on the market, contacting customer service teams with relevant documentation is necessary.
In conclusion, while Redfin and Zillow's home value estimates can be valuable tools for buyers and sellers, they are not infallible. Users should be aware of the potential for inaccuracies, especially when dealing with properties not currently on the market or those with recent changes not reflected in the data. Regularly updating information and, if necessary, engaging with customer service can help ensure more accurate estimates aligning with the property's true market value.
