Why Zillow Estimates and Automated Home Value Reports Are Actually Garbage

Does that headline seem a little harsh to you? Are Zillow Zestimates and other Automated Home Value Estimates really GARBAGE?

In a word: YES.

If you're like many homeowners - whether or not you're planning on selling soon - you likely peek online every now and then at what your "Zestimate" is. Or submit a form on a real estate website to see what your home value is.

If you've done that before, how accurate were the results? Do you even know?

The Problem with Zestimates and Automated Home Value Reports

Zillow uses a proprietary formula to determine their "Zestimate", or estimated value of the home.

And by "proprietary", we mean: they don't really tell you how. This is the same for most other online automated home value tools as well.

In general, these tools estimate the value of a property based on public records, such as number of beds and baths, the square footage of the home, whether it's one story or two, and so on.

These sites also use information based on what the home sold for the last time it was on the market, as well as what other homes nearby have sold for.

The problem is - and this is a BIG problem - Zillow’s algorithm and automated tools simply cannot consider all the unique characteristics of a home, neighborhood dynamics, upgrades, current events and trends, or other factors that can dramatically impact home values.

Who Cares if Estimates Are Off a Little?

We can hear you asking now: what's the big deal if the estimates are off a little?

As long as you can get a general idea of what your home value is, then that's good enough, right?

Perhaps so, if you are just checking in for the fun of it. But if you're actually preparing to sell your home soon, then an accurate home value estimate is crucial.

We've seen auto-generated home values miss the mark by $50K-$100K, above and below the estimate!

If you're thinking of selling and your home estimate is extremely LOW, then this might deter you from selling, costing you thousands or ten of thousands of dollars.

If your home value is extremely HIGH, you could go into the selling process with unrealistic expectations, and price your home too high only to have it sit on the market for months, leaving you feeling defeated and unsure what to do next.

What's The Solution?

If you're just checking on your home value for the fun of it, you can keep doing what you're doing and have fun with it.

But if you're in the market to sell your home, or in the research phase to see if you SHOULD sell, it's important for you to reach out to a real estate professional and ask them to do a thorough home value estimate report for you.

We do this for our clients all the time - at no charge. In fact, we completely removed the automated home value reports from our website because we want to ensure we're giving our clients accurate, personalized information.

If you'd like us to research your home's potential value in this current market, submit this form with your address and we'll reach out within 24 hours with your customized report. Or you can contact us anytime via call, text or email just to chat.

Whatever you do, don't rely on auto-generated reports to determine your course of action! Best wishes as you navigate your home value in this market, and hope to chat soon.

- Victor & Karla Aguilar