Why Your Home's Zestimate Can Be Misleading

Real Estate Agent with Laura Huntley Real Estate 264285

I recently listed a Raleigh NC luxury home for sale that had a Zestimate of about $936,000.  I contacted Zillow and offered details about the unique features of the home and corrected the square footage.  As a result, the new Zestimate is about $1,100,000.  The original Zestimate was off by about 18%.  Zillow cannot get inside your home.  Zillow can't know the features of your home that add value.  Zillow can't know about improvements that you have made that add value.  Zillow does not hire an appraiser to accurately measure the home.   Zillow cannot advise you about simple things you can do to add value to your home.  Zillow doesn't know that your home is in a location that is booming due to a new commercial hub.

Why Zestimates can be Misleading 

There are aspects of a Zestimate that can mislead:

  1. Zestimates lack of accuracy in listing information.  The listings many times do not reflect important details that are valuable, and the
  2. Zestimates are very often off by a significant percentage.

[In a  Washington Post article, a Washington D.C. brokerage was quoted for documenting that Zestimates are getting worse. Of 500 estimates, the values ranged from 62% under, to 150% over the actual sold figures.]

Zestimates Are Calculated Based on a Rough Estimate of ValueHumorNoToilet.jpg

Zestimates have been wrong more than they’ve been right. Why?   They use an algorithm to formulate values across the country. The same methodology is used in every location. It’s not possible that a “one-size-fits-all” approach could be accurate when the value of your home depends on so many local and subjective variables.

A complicated formula can come up with a rough estimate, but this approach can be misleading because your home is unique. Home values in your neighborhood can vary dramatically compared to another neighborhood.  There are many reasons.  Neighborhood amenities and proximity to power lines, highways, and commercial hubs affect the value of your home.

All real estate is local, even micro-local. Values for similar homes in one neighborhood can be completely different in a neighborhood only blocks away. Zillow can’t get inside a home and see the features that add value to your home…like an updated kitchen,  gorgeous hardwoods, quartz countertops, custom cabinets and high-end appliances; compared to a similar home with basic builder grade finishes and 15-year-old carpet.  

All online algorithms like Zestimates and valuations from other platforms are inaccurate. They are machine computations. Estimates are just that, estimates. In addition, a lot of the appraisals that are conducted by licensed appraisers are also inaccurate and often come in lower or higher than what they should. And remember, appraisals are static and do not reflect constantly changing housing market. 

If you are planning to list your home for sale in the Raleigh NC area, nothing is better than local market knowledge.  

You can trust Raleigh NC  Realtor ®, Laura Huntley to give you the most accurate data for your home in today's market.  Contact me or Download my Free Monthly Housing Report to see what is happening in our market. 



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Bob "RealMan" Timm
Alliance Real Estate - Minot - Minot, ND
Bob Timm, Broker Associate, Alliance Real Estate

Good post Laura Huntley . I wouldn't spend that much time explaining it to a client face to face but you have some excellent material in here I can use next time it does come up. Thanks 

Feb 12, 2018 05:41 PM #1
Mel Ahrens, MBA, Kelly Right Real Estate
Kelly Right Real Estate - Hood River, OR
Customized Choices for your Real Estate Needs

So true.  In my rural area, the Zestimate details indicate the assessed market value is used.  Yeah, like that is close?

Feb 12, 2018 07:34 PM #2
Mel Ahrens, MBA, Kelly Right Real Estate
Kelly Right Real Estate - Hood River, OR
Customized Choices for your Real Estate Needs

And welcome to Active Rain.

Feb 12, 2018 07:34 PM #3
Carol Williams
U.S.: I specialize in helping agents who have been in the business 2 years or less create a thriving business. - Wenatchee, WA
"Customized Mentoring & Marketing Services"

"Nothing is better than local market knowledge."  BINGO!

Feb 12, 2018 07:56 PM #4
Sybil Campbell
Long and Foster REALTORS® 5234 Monticello Ave Williamsburg, Virginia - Williamsburg, VA
REALTOR® ABR, SFR, SRES Williamsburg, Virginia

My broker told me that he read the Zestimate for the CEO of Zillow was off by 33%!

Feb 12, 2018 08:23 PM #5
Sybil Campbell
Long and Foster REALTORS® 5234 Monticello Ave Williamsburg, Virginia - Williamsburg, VA
REALTOR® ABR, SFR, SRES Williamsburg, Virginia

By the way, welcome to Active Rain and congrats on your first blog post Laura Huntley

Feb 12, 2018 08:24 PM #6
Kat Palmiotti
Grand Lux Realty, 914-419-0270, kat@thehousekat.com - Monroe, NY
The House Kat

Welcome to ActiveRain!

These are all valid points - online estimates are computer based estimates that do not take into account the local nature of a particular area.

Feb 13, 2018 03:12 AM #7
Michael J. Perry
KW Elite - Lancaster, PA
Lancaster, PA Relo Specialist

We made a huge mistake a decade ago when we fed the Monster our listings which helped to become Godzilla !

Feb 13, 2018 06:56 AM #8
Will Hamm
Hamm Homes - Aurora, CO
"Where There's a Will, There's a Way!"

Hello Laura and Welcome to the Rain where we all help each other and learn from each other.


Feb 13, 2018 07:25 AM #9
AJ Heidmann
McEnearney Associates, Inc. - Alexandria, VA
YOUR Alexandria & Arlington, VA Real Estate Expert

Laura ~ Welcome into the 'Rain and congratulations on a great first blog post!  Nothing can beat the actual local knowledge an agent that has gone into homes that have previously been on the market to understand value in today's market.

Feb 13, 2018 08:38 AM #10
Liane Thomas -Top Listing Agent
BROKER Allison James Estates & Homes BRE 01885684 - Corona, CA
Bringing you Home!

Really good first blog! Looking forward to seeing more from you.

Feb 13, 2018 08:58 AM #11
George Souto
George Souto NMLS #65149 FHA, CHFA, VA Mortgages - Middletown, CT
Your Connecticut Mortgage Expert

Laura Huntley welcome to ActiveRain and congratulations on successfully posting you first blog on this site.

Feb 13, 2018 04:56 PM #12
Gita Bantwal
RE/MAX Centre Realtors - Warwick, PA
REALTOR,ABR,CRS,SRES,GRI - Bucks County & Philadel

Welcome to active rain. Good luck in achieving your goals on active rain 

Feb 14, 2018 05:19 AM #13
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