When a homeowner looks at their address on Zillow, they are looking to see what the Zestimate says the value of their home is. The homeowner is assuming that an organization as immense as Zillow knows what they are talking about. A Zestimate home valuation is the site’s estimated market value, computed using a formula. Even Zillow itself says, “it is not an appraisal, it is a STARTING POINT in determining a home’s value.”
The Zestimate is very innaccurate - sometimes as much as 30% off the mark, Zillow themselves will admit. Zillow does not have agreements with each mls in the nation, so some listings are entered, and others not. Some stay in after they are sold. Therefore there is not an accurate appraisal base to establish any proper prices.
Homeowners do not always go in to see their home's listing to check if their improvements have been entered on their home. Did they build a pool? Did they add a new kitchen addition? Add a theatre to the basement? All of the improvements done to a home will add to the value in Zillow, only if entered. Most homeowners do not know that they need to maintain their home's listing in Zillow before they list it on the market to sell.
If sellers would check to see their Zestimates and add in the improvements and their costs, they would find their values increased.
While Zillow and Zestimates can be great tools for the consumer, the best thing to do remains to hire a real estate professional or appraiser to provide a more accurate value. An experienced real estate agent or broker will be able to provide you with a Comparative Market Analysis and take special features, location and market conditions into account when giving you an estimate.
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