Everyone has heard of Zillow. It’s the most popular real estate search tool used by consumers. In fact, Zillow has an average of 73 million visitors per month nationwide.
One of the tools Zillow offers is called a Zestimate, which is Zillow’s estimate of your home’s value. The problem is, Zestimates are very inaccurate. As a result, they can cause a lot of tension between a buyer and a seller.
In other words, you shouldn’t trust a Zestimate over a real estate professional to determine the value of your home. Zestimates have a national median error rate of 8% in our coastal market. However, there are many more factors to take into account in a coastal market, such as location, lot size, views, and view orientation. The median error in our market could be 15% or more.
For example, a $2 million house’s Zestimate could be off by $300,000 or more. In fact, Zillow’s own CEO, Spencer Rascoff, sold his home a couple years ago for 40% less than his own Zestimate. Now, Zillow is facing a lawsuit from someone who claims that their low Zestimate hurt the value of their home.
All of this should be very alarming news, and it does seem like Spencer Rascoff is starting to worry. Just last week, he announced a contest where he’ll give away $1 million to any person or team who figures out a way to improve the Zestimate algorithm.
Until the Zestimate can be improved, don’t allow Zillow to dictate your buying or selling choices. If you are curious about what your home is worth, give me a call or send me an email. I would be happy to help you!