Have you ever gone to Zillow’s website, looked up your home and wondered if the estimate you’re seeing is accurate?
You're probably not alone in wondering just how accurate those estimates are. We decided to take the question to Check Out DFW expert Jeff Cheney and this is what he had to say on the topic:
How do I know if the estimate Zillow is showing me is accurate and how different is the process that a local realtor uses to determine my property value than what Zillow does?
According to Zillow’s website, Zestimate is Zillow’s estimated market value for a home, computed using a proprietary formula including public and user-submitted data.
They also say their median error rate of value is 7.5%, meaning half of their values are within 7.5% of actual market value and half of them have an error rate higher than 7.5%, sometimes much higher, Cheney said.
“This is why on their Zestimate page they recommend sellers do not rely on the Zestimate and to contact a Realtor,” Cheney said.
Jeff Cheney, mayor of Frisco and owner of the Cheney Group has built a successful real estate business and continues to lead the city through impressive growth.
While it is useful information, Cheny said, there is so much more to valuing a home than analytics and formulas.
For instance, he said, if you had two homes on the same street with the same floor plan, in theory they should have similar estimate values as Zillow does not inspect the homes. However, one of the homes may have substantial updates inside the home and the other may be in need of substantial repairs and updates leading to dramatically different market values.
“Those are things a computer never sees,” Cheney said. “In addition, there may be other factors not included in their proprietary formula such as the direction the market is moving, the motivations of a seller, or other factors in each local market that may impact value.”
Some examples include the direction a home faces, the style and architecture of the home, the physical layout of the home and the list goes on. There are hundreds of factors that ultimately determine market value and real estate is always local, Cheney said.
“The bottom line is when it gets times to price your home, rely on a local expect who has visited your home,” Cheney said.
About Check Out DFW's Expert Program: Our Verified Experts are vetted and handpicked to participate in answering reader questions. They do have the ability to participate in marketing programs that enables them to answer more questions and distribute their answers more widely. But they cannot simply pay to become part of this exclusive program.