How fitting that this question arrives when it does, as I was just reviewing the latest Zestimate that arrived in my e-mail a couple days back.
Does the Zestimate on my house make a difference?
Thanks to Stephen, from Delaware, Ohio, for our most recent “Q&A” feature and since I’m the REALTOR in the room, I’ll take this one. But before I we get to heavily involved in the question, we need to bring some readers up to speed.
What is a Zestimate?
Zestimate on my house on Tar Heel Drive.
Well, first we have to step back for a second and take the company that creates the Zestimate on first.
Zillow.com is a leading online real estate marketplace dedicated to helping homeowners, buyers, sellers, renters, real estate agents, mortgage professionals, landlords, and property managers find and share vital information about homes, real estate, and mortgages.
I remember when I got into the business in 2006, Zillow was seen as the “devil” by the real estate industry. I remember a Top Producer representative telling me that “Zillow is your enemy, they are going to try and take over the business.” Fast-forward three years and the dust has finally settled a bit. Zillow has pushed the envelope for real estate agents’ Web sites in adapting the search features and becoming more consumer driven. And none of that is bad.
One of the features that put Zillow on the map was its attempt to value properties in a totally analytical way — without having to talk with someone like me, who suddenly begins hounding you about selling your house. (Just a note, that’s not my style, I promise.) With Zillow’s tendency for naming everything with a “z” that home “estimate” has become a “Zestimate”.
So, Does That Zestimate Matter?
Of course it “matters”, but how much weight you place on it is something that I’d be careful of.
Basically put, pricing a house is a combination of an art and science. Zillow has the ability to pull data points from public records and then using a algorithym it creates a “value” for your home.
Let’s take a look at my house as an example. I’ve got a 1998 Dominion home in a nice subdivision with a premium lot, however my house is the smallest two-story on the block. According to Zillow, my house value is $170,000 — down 1.1% in the last thirty days — and the range is from $149,640 up to $193,140.
My first thought when I look at Zillow’s numbers is:
- Range: It I walked into a potential client’s house and gave them a range of 30% for their value, I have a feeling they’d look at me like I was an idiot. I understand it has to be very wide for the statistical relevance factor. Hence, the more houses that are similar to yours that has sold, the better I think the Zillow would be. They don’t even offer Zestimates for houses in certain parts of Morrow and Knox Counties.
- Price: I would be hard-pressed to honestly think we could get anything above $160,000 for our house in today’s market. So the Zestimate can set a higher expectation than what the market will hold.
So What Should You Make of Your Zestimate?
I would simply take it as another source of information. Combine that with a talented and hard-working real estate agent and your own common sense and you should come up with a reasonable price.
Happy hunting!
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