Is Zillow an accurate way to calculate your home’s value?
To calculate any home’s value, Zillow uses an automated value tool called a Zestimate. Automated values work via a complex algorithm that takes into account neighboring home sales, available tax information, the last time your home sold, and numerous other data points.
Some Realtors and brokers hate Zillow, but I’m not one of them. These automated values are better in some neighborhoods than others. If you live in a subdivision with 100 similar homes, Zillow can usually calculate your home’s value to within 10% of its likely sale price.
The challenge with automated values is with homes that are unique. In Minnesota, waterfront properties, homes with an acreage, or homes that are worth over $500,000 don’t work well with Zillow’s automated value system.
Automated values are just a starting point. Much like your county assessed value, Zillow doesn’t know about all the updates you might’ve completed, the lot premium for your lot compared to your neighbor’s, and other factors like that.
“Automated values are just a starting point.”
If you’re looking for a true, accurate value of what your home will sell for in today’s market, you have a couple of options.
First, you can hire an independent appraiser to look at your property, although appraisers are usually only used by banks to help them decide what they’ll lend for a mortgage. Your second option is to contact a real estate agent so they can put together a comparative market analysis.
If you’re thinking of selling in the next two years and would like a free-no-obligation market analysis on your home, we would love to help. If you have any more questions about this topic, don’t hesitate to reach out to us. We look forward to connecting with you soon!
