Are you thinking of selling your home? If so, you had probably come across Zillow, a widely popular real estate online database in the market. Zillow is so popular that it was reported that it had over 36 million unique visitors in January 2020 alone, ranking it as the most popular real estate website in the United States.
This application’s key feature is Zestimates, a tool that estimates how much a property is worth. These estimates were derived from comparable sales and public data in a given geographic location. This type of information is valuable to any home seller in deciding how to price their property. However, the critical question is – can you rely on the market value estimate given by the widely revered Zillow? Unfortunately, the answer is no.
What is Zestimates?
Zestimate is a tool within the Zillow software that provides an estimated market value of a property. According to Zillow, the estimate provided by their tool is computed using a proprietary formula that includes both public and user-submitted data.
Are Zillow Estimates Accurate?
Generally, no. And here’s why.
According to Zillow, Zestimate’s figure is computed using a proprietary formula derived from public and user-submitted data; and that its accuracy depends on two variables: the location and the availability of data in an area.
Zestimate’s information is questionable for two things: 1.) the proprietary formula is unknown, so there is no way for the public to determine its accuracy, and 2.) user-submitted data is highly undependable. Since user-data is voluntary, there are too many questions about its accuracy, such as: how much information collected is real, how it is collected, and how much of the data collected is representative of the market.
More so, Zillow admits that their median of error for on-market homes nationwide is 1.9% and about 7.5% for off-market homes.
This data is problematic as off-market homes are a significant factor in determining a property’s value. Zestimate’s high margin of error in this type of home makes their estimate highly suspect.
So How Can Home Sellers Get A Reliable Estimate of Their Property?
The good thing is, licensed real estate agents can provide home sellers a Comparative Market Analysis (CMA) report. This analysis provides a more accurate figure to help the seller determine the value of their property in the current market to price their property competitively.
What is a CMA?
A CMA is a report furnished by a licensed real estate agent that provides an accurate estimate of a property. Compared to a Zillow estimate, this report provides an exhaustive analysis that considers the specific property’s unique features, including, but not limited to, location, current market conditions, renovations, upgrades, and comparable homes.
A CMA contains comparable properties in the following categories:
- Properties that have sold and closed in your location within the last six months;
- Properties that are currently listed for sale in your area (Active listings); and
- Properties that were either expired or withdrawn during their listing period.
The bottom line is Zestimate powered by Zillow is excellent in providing a ballpark starting point on how much a property is worth. Unfortunately, the value of the Zestimate ends there as properties even within the same communities dramatically vary. Thus, it is vital to seek the help of knowledgeable licensed real estate agents that could provide you with a CMA, which contains an accurate estimate of your property’s value. Having this information provided by a reliable real estate agent can provide you with a realistic estimate to assess your expectations and goals. Ultimately, this could help you price your home competitively to sell promptly at its full potential.
Selling a house in any market is tough, and determining how to price your home competitively is not as simple as clicking a mouse, even if a widely popular real estate database makes it seem to be. Request your CMA today from a licensed real estate agent to provide you with a realistic and accurate estimate for your property.
At Pavel Buys Houses, we are licensed real estate agents in Massachusetts that can help you sell the house competitively in this current market. If you don’t want the time commitment and frustrations of selling the property the traditional way, we also buy homes fast in Massachusetts and will provide you with the best possible cash offer. Get in touch with us today for a consultation or to receive this free, no-obligation cash offer at 781-309-7085.
Our priority is making sure you have the advice you need to make the best decision for your situation.