Zestimates-Wrong-Inaccurate

Zestimates – Why They are Not Helpful

Why a Home Buyer should never use them

What is a Zestimate?

Zestimate

(Pronounced ZEST-ti-met) – Information is straight from the Zillow Website

The Zestimate® home value is Zillow’s estimated market value for an individual home and is calculated for about 100 million homes nationwide. It is a starting point in determining a home’s value and is not an official appraisal. The Zestimates are automatically computed daily based on millions of public and user-submitted data points.

Zestimates® home valuation is Zillow’s estimated market value, computed using a proprietary formula. It is not an appraisal. It is a starting point in determining a home’s value. The Zestimate is calculated from public and user-submitted data, taking into account special features, location, and market conditions. We encourage buyers, sellers, and homeowners to supplement Zillow’s information by doing other research such as:

  • Getting a comparative market analysis (CMA) from a real estate agent
  • Getting an appraisal from a professional appraiser
  • Visiting the house (whenever possible)

Zillow also produces a Zestimate forecast, which is Zillow’s prediction of a home’s Zestimate one year from now, based on current home and market information. Learn more about the Zestimate forecast.

*For more information on Zestimates directly from Zillow, Click HERE

From: the Los Angeles Times
By: Kenneth R. Harney
Date: February 2015

When “CBS This Morning” co-host Norah O’Donnell asked the chief executive of Zillow recently about the accuracy of the website’s automated property value estimates — known as Zestimates — she touched on one of the most sensitive perception gaps in American real estate.

Zillow is the most popular online real estate information site, with 73 million unique visitors in December. Along with active listings of properties for sale, it also provides information on houses that are not on the market. You can enter the address or general location in a database of millions of homes and probably pull up key information — square footage, lot size, number of bedrooms and baths, photos, taxes — plus a Zestimate.

Shoppers, Sellers and Home Buyers routinely quote Zestimates to realty agents — and to one another — as gauges of market value. If a house for sale has a Zestimate of $350,000, a buyer might challenge the sellers’ list price of $425,000. Or a seller might demand to know from potential listing brokers why they say a property should sell for just $595,000 when Zillow has it at $685,000.

Disparities like these are daily occurrences and, in the words of one realty agent who posted on the industry blog ActiveRain, they are “the bane of my existence.” Consumers often take Zestimates “as gospel,” said Tim Freund, an agent with Dilbeck Real Estate in Westlake Village. If either the buyer or the seller won’t budge off Zillow’s estimated value, he told me, “that will kill a deal.”

Back to the question posed by O’Donnell: Are Zestimates accurate? And if they’re off the mark, how far off? Zillow CEO Spencer Rascoff answered that they’re “a good starting point” but that nationwide Zestimates have a “median error rate” of about 8%.

Whoa. That sounds high. On a $500,000 house, that would be a $40,000 disparity — a lot of money on the table — and could create problems. But here’s something Rascoff was not asked about: Localized median error rates on Zestimates sometimes far exceed the national median, which raises the odds that sellers and buyers will have conflicts over pricing. Though it’s not prominently featured on the website, at the bottom of Zillow’s home page in small type is the word “Zestimates.” This section provides helpful background information along with valuation error rates by state and county — some of which are stunners.

For example, in New York County — Manhattan — the median valuation error rate is 19.9%. In Brooklyn, it’s 12.9%. In Somerset County, Md., the rate is an astounding 42%. In some rural counties in California, error rates range as high as 26%. In San Francisco it’s 11.6%. With a median home value of $1,000,800 in San Francisco, according to Zillow estimates as of December, a median error rate at this level translates into a price disparity of $116,093.

Some real estate agents have done their own studies of accuracy levels of Zillow in their local markets.

Last July, Robert Earl, an agent with Choice Homes Team in the Charlottesville, Va., area, examined selling prices and Zestimates of all 21 homes sold that month in the nearby community of Lake Monticello. On 17 sales Zillow overestimated values, including two houses that sold for 61% below the Zestimate.

In Carlsbad, Calif., Jeff Dowler, an agent with Solutions Real Estate, did a similar analysis on sales in two ZIP Codes. He found that Zestimates came in below the selling price 70% of the time, with disparities ranging as high as $70,000. In 25% of the sales, Zestimates were higher than the contract price. In 95% of the cases, he said, “Zestimates were wrong. That does not inspire a lot of confidence, at least not for me.” In a second ZIP Code, Dowler found that 100% of Zestimates were inaccurate and that disparities were as large as $190,000.

So what do you do now that you’ve got the scoop on Zestimate accuracy? Most important, take Rascoff’s advice: Look at them as no more than starting points in pricing discussions with the real authorities on local real estate values — Experienced Agents and Appraisers.

Zestimates are hardly gospel — often far from it.

Call the Martin Real Estate Team of Lake Norman if you are interesting in Buying or Listing Your Home in the Cornelius, NC Real Estate area or other around Lake Norman…or even if you are looking for more information on Lake Norman Real Estate Values.

704-900-1619

Lake Norman Waterfront Homes for Sale

Lake Norman homes

Listings 1 - 20 of 232   next

18201 Town Harbour Road -- 5 BR, 5.3 BA
Price: $5,250,000 (8834 sqft)
Subdivision: The Peninsula
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Meredyth Holdenrid | MLS # 4023838 | Active
118 Hadley Harbor Court -- 5 BR, 5.1 BA
Price: $4,500,000 (7456 sqft)
Subdivision: The Point
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Clarke Crawford | MLS # 4066217 | Active
211 Quaker Road -- 4 BR, 3.1 BA
Price: $3,900,000 (5428 sqft)
Subdivision: The Point
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Dom DeMatteo | MLS # 4031058 | Active
17932 John Connor Road -- 4 BR, 3.1 BA
Price: $2,575,000 (4125 sqft)
Subdivision: The Peninsula
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Kathy Day | MLS # 4073319 | Active
128 Wild Harbor Road -- 4 BR, 3.1 BA
Price: $1,600,000 (5296 sqft)
Subdivision: The Point
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Beth Graichen | MLS # 3937900 | Active
128 Hunts Landing Drive -- 4 BR, 4.1 BA
Price: $1,597,700 (4251 sqft)
Subdivision: Hunts Landing
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Colleen Hunt | MLS # 4060806 | Active
111 Swayne Drive -- 4 BR, 3.1 BA
Price: $1,399,000 (3521 sqft)
Subdivision: The Point
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Beth Pihl | MLS # 4059115 | Active
128 Bath Creek Drive -- 3 BR, 3.1 BA
Price: $849,000 (5023 sqft)
Subdivision: Shavenders Bluff
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Erin Boyd | MLS # 4071534 | Active
110 Cullen Place Lane -- 3 BR, 2 BA
Price: $750,000 (1000 sqft)
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Cynthia Team | MLS # 3936994 | Active
172 Bells Crossing Drive -- 4 BR, 3 BA
Price: $689,900 (3041 sqft)
Subdivision: Bells Crossing
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Stacy Borland | MLS # 4056371 | Active
3223 Mountain Creek Drive -- 4 BR, 3 BA
Price: $574,900 (3054 sqft)
Subdivision: Mountain Creek Ridge
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Sherilyn Dlugolenski | MLS # 4034727 | Active
185 Rustling Waters Drive -- 5 BR, 2.1 BA
Price: $573,999 (3123 sqft)
Subdivision: Byers Creek
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Linda Singer | MLS # 4043773 | Active
129 Southhaven Drive -- 4 BR, 2.1 BA
Price: $550,000 (2409 sqft)
Subdivision: Bridgeport
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Paul Yancey | MLS # 4041994 | Active
111 E Fenway Avenue -- 4 BR, 3.1 BA
Price: $470,000 (2518 sqft)
Subdivision: Water Oak
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Jillian Mason | MLS # 4066337 | Active
14051 Island Drive -- 5 BR, 6.2 BA
Price: $22,000,000 (12636 sqft)
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Premier Sotheby's | MLS # 4020713 | Active
18019 Harbor Light Boulevard -- 6 BR, 7.4 BA
Price: $16,000,000 (15048 sqft)
Subdivision: The Peninsula
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Premier Sotheby's | MLS # 3895525 | Active
8465 Norman Estates Drive -- 7 BR, 8.2 BA
Price: $12,995,000 (15003 sqft)
Subdivision: Norman Estates
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Corcoran HM Properties | MLS # 4035287 | Active
16700 Tinker Place -- 7 BR, 8.1 BA
Price: $9,000,000 (11656 sqft)
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Allen Tate Lake Norman | MLS # 4064657 | Active
18000 Whispering Oaks Drive -- 5 BR, 5.4 BA
Price: $8,000,000 (7308 sqft)
Subdivision: Point Largo
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Nestlewood Realty, LLC | MLS # 4002519 | Active
130 Points End Drive -- 4 BR, 4.1 BA
Price: $7,795,000 (6604 sqft)
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Premier Sotheby's | MLS # 4038938 | Active

Listings 1 - 20 of 232   next

Lake Norman Waterfront Condos for Sale

Lake Norman condos

Listings 1 - 20 of 72   next

19909 Henderson Road -- 2 BR, 2 BA
Price: $349,900 (1026 sqft)
Subdivision: Windward
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John Rhodes | MLS # 4073483 | Active
103 N Cove Key Lane -- 4 BR, 3.1 BA
Price: $1,350,000 (3940 sqft)
Subdivision: Cove Key
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Ivester Jackson | MLS # 4063098 | Active
7425 Mariner Cove Drive -- 2 BR, 2.1 BA
Price: $775,000 (1559 sqft)
Subdivision: Mariner Villas
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Keller Williams | MLS # 4072563 | Active
9030 Charles Francis Lane -- 3 BR, 3.1 BA
Price: $615,955 (2650 sqft)
Complex: The Retreat At West Catawba
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David Weekley Homes | MLS # 4052254 | Active
9047 Charles Francis Lane -- 3 BR, 3.1 BA
Price: $609,842 (2654 sqft)
Complex: The Retreat At West Catawba
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David Weekley Homes | MLS # 4040399 | Active
9043 Charles Francis Lane -- 4 BR, 3.1 BA
Price: $599,387 (2726 sqft)
Complex: The Retreat At West Catawba
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David Weekley Homes | MLS # 4040230 | Active
821 Southwest Drive -- 3 BR, 2 BA
Price: $575,000 (1287 sqft)
Subdivision: Stonebluff
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Real Broker, LLC | MLS # 4067316 | Active
9026 Charles Francis Lane -- 3 BR, 2.1 BA
Price: $571,975 (2054 sqft)
Complex: The Retreat At West Catawba
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David Weekley Homes | MLS # 4050138 | Active
9034 Charles Francis Lane -- 3 BR, 2.1 BA
Price: $542,062 (1977 sqft)
Complex: The Retreat At West Catawba
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David Weekley Homes | MLS # 4052298 | Active
107 Pier 33 Drive -- 3 BR, 3 BA
Price: $499,000 (1551 sqft)
Subdivision: Pier 33
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Keller Williams South | MLS # 4070737 | Active
6997 Waterstone Drive -- 4 BR, 3.1 BA
Price: $479,990 (2672 sqft)
Subdivision: Waterstone
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CCNC Realty Group LLC | MLS # 4037131 | Active
4323 Reed Creek Drive -- 4 BR, 3.1 BA
Price: $479,990 (2672 sqft)
Subdivision: Waterstone
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CCNC Realty Group LLC | MLS # 4067725 | Active
4315 Reed Creek Drive -- 4 BR, 3.1 BA
Price: $475,990 (2672 sqft)
Subdivision: Waterstone
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CCNC Realty Group LLC | MLS # 4067712 | Active
4311 Reed Creek Drive -- 4 BR, 3.1 BA
Price: $474,990 (2672 sqft)
Subdivision: Waterstone
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CCNC Realty Group LLC | MLS # 4067706 | Active
4319 Reed Creek Drive -- 4 BR, 3.1 BA
Price: $469,990 (2672 sqft)
Subdivision: Waterstone
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CCNC Realty Group LLC | MLS # 4067720 | Active
4307 Reed Creek Drive -- 4 BR, 3.1 BA
Price: $469,990 (2672 sqft)
Subdivision: Waterstone
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CCNC Realty Group LLC | MLS # 4065574 | Active
6993 Waterstone Drive -- 4 BR, 3.1 BA
Price: $464,990 (2663 sqft)
Subdivision: Waterstone
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CCNC Realty Group LLC | MLS # 4037130 | Active
6989 Waterstone Drive -- 4 BR, 3.1 BA
Price: $464,990 (2660 sqft)
Subdivision: Waterstone
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CCNC Realty Group LLC | MLS # 4037129 | Active
18538 Catawba Avenue -- 3 BR, 2.1 BA
Price: $455,000 (2324 sqft)
Complex: Harborside
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Listwithfreedom.com | MLS # 4073923 | Active
19119 Juanita Lane -- 3 BR, 2.1 BA
Price: $450,000 (1878 sqft)
Complex: Lake Norman Cove at Jetton
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RE/MAX Executive | MLS # 4064542 | Active

Listings 1 - 20 of 72   next