When I read this story, I have to admit, I secretly giggled to myself. Clients ask me all the time, “Are Zestimates accurate?” My typical response over the years has been along the lines of; “you know that they calculate values using an algorithm based on population density, radius distance, and lots of additional data points, right?” (wink wink)
Zillow is both a Realtor’s best friend and worst enemy all at the same time.
When I am preparing for a listing presentation, I always look at the Zestimate. While I give the Zestimate zero consideration in my pricing recommendations, it is a great way to prepare a seller for what the buyers are looking at. I love when the Zestimate is way too high. Why? When my listing comes to the market with an accurate list price, it will look like a ‘Hot Home’ to all the buyers perusing Zillow’s site. However, when the Zestimate is way too low, listing appears significantly overpriced (although accurate).
Within the Real Estate industry, the fact Zestimates are not accurate is common knowledge. In this article “Zillow admitted in 2017 that it’s Zestimates are generally off by $40,000 when considering the ‘typical single-family home sold in Seattle’.” What? $40,000? I can’t imagine going into a listing appointment and telling a seller I could be $40,000 off “give or take”. Sellers would never trust me with another listing.
After reading this article, I’ve decided that I will update my response when clients ask me about Zillow’s accuracy. From now on, my answer will be, “according to Zillow, they are generally off by $40,000”. This is a much more succinct answer. Zillow themselves answered my question.
Thank you Zillow!