ZEstimate: Explained But Not Understood
Over 88% of real estate buyers will use the internet during their property search. This is no secret, in fact most people in real estate use the internet as a resource these days. The real secret is how much agents and buyers understand the information we gather - for example who really understands the Zestimate?? Zillow does a pretty good job of explaining this feature on their site, but let's be honest who really looks?
If, you have ever searched for property on Zillow.com you've probably seen their home details pages. Did you notice in the left hand corner, just under the price the Zestimate??
Chances are if you're like most buyers, you might think this is what the property is worth. Not quite. This is the "Zillow's estimated market value, computed using a proprietary formula". Zillow recommends this value as a "starting point in determining a home's value". The site goes on to recommend consulting a real estate agent, getting an appraisal and visiting the home to determine their own opinion of value.
How do they determine the Zestimate value?
Well, I don't work for Zillow so I'm not privy to all the ins and out of the process but they do give us the gist. Basically, they take "zillions of data points" from public information....plug them into the formula .....and presto you have their Zestimate.
How accurate is a Zestimate value?
According to Zillow, the answer depends on your location. The accuracy of their Zestimate is dependent upon the data they are able to obtain from the localities. To help aid the buyer in determining the reliability of the information Zillow has a chart with star classification. Be sure to click over and check out your area to determine how reliable the data is before you try to base an offer on a Zestimate.
What does this mean in South Central Virginia?
As for my area we rated one star which on Zillow's scale means "tax assessor's value, or unable to compute Zestimate accuracy" or more simply put poor.
It is my understanding that Prince Edward Co and as well as the surrounding counties do not submit enough information to enable Zillow to compute an accurate value....so they rely predominately on tax assessments. Resulting in wildly varying Zestimates (as displayed in photos).
My advice, if you're interested in a property on Zillow.....check the reliablilty of the Zestimate before giving it much consideration or better yet, take Zillow's advice and consult your local Realtor.
Realtors, what do you think of Zestimate? Do you agree with Zillow's assessment of your area's Zestimate accuracy?
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