A growing number of sellers are relying on Zillow’s Zestimates to establish the value of their property. At a recent listing presentation the seller proudly quoted the Zestimate number. I’m sure my eyebrows shot up, even though I attempted to dig deep into my Swiss ethnicity and remain neutral. After all, there was a huge difference between what my local knowledge of the neighborhood and recent comparable sales showed and Zillow’s number.
I don’t know Zillow’s formula for determining value, but in this particular case I went online to see how in the world they arrived at their value. This particular property is located at the edge of one neighborhood and adjacent to another neighborhood with far different values. Zillow’s report blurred these lines and used sales from the more upscale neighborhood to establish the value. In a nutshell, Zillow’s values are based on recent nearby sales in the area, as the crow flies, so to speak. This method works fairly well for homes located in the heart of a homogeneous subdivision, but it returns some very wide value ranges in areas with homes of varying condition and quality, and for properties located on the border of a city or neighborhood. Crows do not have borders, neighborhoods do.
I’m fairly certain Zillow did not walk the property, tour the interior or add value for a recent remodel. Their number is just what it says a “Zestimate” with no claim to be an accurate representation of value. It’s a shot in the dark–sometimes they hit the target, sometimes they miss by a mile. When it’s time to sell your property you need more than that.
-Norma (310) 493-8333