Zestimates: they're just a starting point
For all too long, Zillow has been unfairly accussed of being the Anti-Christ of Real Estate, primarily due to the criticisms associated with their Zestimates. In the same vein as our County Assessed Values, the Zestimate always offers a good starting point of discussion with my clients and potential clients, and provides an excellent opportunity for me to better establish my expertise and position of local market authority.
This morning, I received an email from the head of marketing at a very large real estate company who is a listing partner of Zillow's. He asked me if I had a canned response to agents asking about Zestimate accuracy. Here's the email that I sent him:
Hi XX,
We have two videos on this topic which we send to a lot of people.
This video is geared towards consumers.
And this video is geared towards real estate professionals.
So the easiest thing for you to do is to send your agents a link to the video
Also here’s a blog post on the topic.
But here are the main points so you also have them in text.
- Zestimates are calculated three times per week by computer models that try to approximate what the market value is for almost every home in the country. We crunch numbers on 70 million homes and publish those Zestimates to the website every few days.
- We're very transparent about our Zestimate accuracy and we report on it quarterly on the site here. We encourage agents to show the accuracy table (which can be found by clicking on “Zestimate Values & Accuracy” on the bottom of every page of the website). The accuracy table helps agents explain to clients the limitations of the Zestimate, and helps reinforce the importance that a real estate agent has in helping the client think through the value of their home.
- Zestimate accuracy varies depending upon the quality of the information we have on the specific home. Also, Zestimates are more accurate on homes that are more similar to other homes that have recently sold; on the other hand, Zestimates are less accurate on more unique homes.
- Keep in mind that when a home is listed for sale on Zillow, several things happen with respect to the Zestimate:
- 1. The Zestimate comes off the map page and is replaced with the For Sale price
- 2. The property attributes (e.g., # beds, # baths, sqft, etc) which were previously provided by the county are replaced by the listing information
- 3. Zillow recalculates the Zestimate within a few days based on the new property attributes. The For Sale price of the home is not a direct input into the Zestimate though.
- 4. On the listing page (aka “the home details page”), the Zestimate is removed from the top of the page and replaced with the For Sale price. The Zestimate still appears on the page, but at the very bottom. In some cases, the Zestimate doesn’t appear on the listing page due to an inability to match the address from the listings feed with an existing address in our database.
We tirelessly explain to consumers and agents that Zestimates are just a starting point and they're not the end-all-be-all in figuring out the value of a home. They're just another datapoint which needs to be considered and discussed between real estate agent and client. Best regards, Spencer
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