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 107   next

167 Queens Cove Road -- 5 BR, 8.1 BA
Price: $2,650,000 (8785 sqft)
Subdivision: Queens Cove
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Michael Toste | MLS # 3772458 | Active
22350 Country Club Lane -- 3 BR, 2 BA
Price: $1,595,000 (2077 sqft)
Subdivision: Country Club Shores
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Gene McKinney | MLS # 3731756 | Active
131 Dedham Loop -- 4 BR, 3.1 BA
Price: $1,350,000 (4102 sqft)
Subdivision: The Point
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Tom Robisky | MLS # 3808180 | Active
123 Hunts Landing Drive -- 4 BR, 4.2 BA
Price: $1,309,285 (4074 sqft)
Subdivision: Hunts Landing
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Colleen Hunt | MLS # 3819982 | Active
150 Peninsula Drive -- 3 BR, 4.1 BA
Price: $1,289,000 (3947 sqft)
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Paul Yancey | MLS # 3764756 | Active
108 Overlook Drive -- 3 BR, 3 BA
Price: $449,999 (2501 sqft)
Subdivision: Riverwalk
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Kent Rector | MLS # 3764988 | Active
19129 Serenity Point Lane -- 6 BR, 6.2 BA
Price: $4,940,000 (10435 sqft)
Subdivision: Joys Serenity Point
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Allen Tate Lake Norman | MLS # 3776981 | Active
21211 Island Forest Drive -- 5 BR, 6.1 BA
Price: $4,199,000 (6327 sqft)
Subdivision: Island Forest
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Fathom Realty | MLS # 3821044 | Active
124 Brownstone Drive -- 5 BR, 6.1 BA
Price: $3,895,000 (7241 sqft)
Subdivision: The Point
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Trump International | MLS # 3821307 | Active
8451 Ridgewood Road -- 5 BR, 5.2 BA
Price: $3,250,000 (8867 sqft)
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Lakeshore Realty, Inc. | MLS # 3628933 | Active
183 Crystal Circle -- 3 BR, 5 BA
Price: $2,999,000 (7041 sqft)
Subdivision: Crystal Bay
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Michael Sullivan | MLS # 3756251 | Active
116 Courtney Lane -- 4 BR, 3.2 BA
Price: $2,950,000 (6645 sqft)
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COVO REALTY | MLS # 3719370 | Active
498 Bay Harbour Road -- 4 BR, 7.1 BA
Price: $2,900,000 (8346 sqft)
Subdivision: The Harbour at the Pointe
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Lake Norman Agents LLC | MLS # 3815251 | Active
627 Isle of Pines Road -- 4 BR, 3.1 BA
Price: $2,900,000 (3138 sqft)
Subdivision: Isle of Pines
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Properties of the | MLS # 3795756 | Active
16207 Henry Lane -- 5 BR, 5.1 BA
Price: $2,866,000 (5374 sqft)
Subdivision: Gilead Woods
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Pilot Realty & | MLS # 3703829 | Active
214 Westpaces Road -- 4 BR, 5.1 BA
Price: $2,850,000 (4329 sqft)
Subdivision: West Paces
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Premier Sothebys | MLS # 3801055 | Active
20320 Havenview Drive -- 5 BR, 6 BA
Price: $2,695,000 (5193 sqft)
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Carlyle Properties | MLS # 3815589 | Active
168 Pinnacle Lane -- 5 BR, 5.1 BA
Price: $2,200,000 (5974 sqft)
Subdivision: Pinnacle Shores
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Keller Williams Realty | MLS # 3805099 | Active
155 Vineyard Drive -- 4 BR, 4.1 BA
Price: $1,999,999 (5172 sqft)
Subdivision: The Point
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Keller Williams | MLS # 3803961 | Active
20107 Bascom Ridge Drive -- 4 BR, 5.2 BA
Price: $1,900,000 (7422 sqft)
Subdivision: Crown Harbor
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Premier Sothebys | MLS # 3673218 | Active

Listings 1 - 20 of 107   next

Lake Norman Waterfront Condos for Sale

Lake Norman condos

Listings 1 - 8 of 8

18742 Nautical Drive -- 2 BR, 2 BA
Price: $320,000 (981 sqft)
Complex: Cypress Point
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Debi Gallo | MLS # 3818385 | Active
651 Portside Drive -- 2 BR, 2 BA
Price: $599,500 (1013 sqft)
Complex: Portside At Davidson Landing
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EXP REALTY LLC | MLS # 3806263 | Active
18847 Vineyard Point Lane -- 2 BR, 2 BA
Price: $335,000 (874 sqft)
Complex: Vineyard Point
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Keller Williams | MLS # 3817413 | Active
19843 Henderson Road -- 2 BR, 2 BA
Price: $279,900 (1026 sqft)
Complex: Windward
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Lantern Realty & | MLS # 3813036 | Active
18809 Nautical Drive -- 2 BR, 2 BA
Price: $269,900 (1077 sqft)
Complex: Admirals Quarters
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OfferPad Brokerage LLC | MLS # 3819887 | Active
21024 Cornelia Grove Way -- 1 BR, 1 BA
Price: $234,500 (975 sqft)
Complex: Cornelius Woods
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The Allen Team Inc | MLS # 3717290 | Active
21024 Cornelia Grove Way -- 1 BR, 1 BA
Price: $234,500 (975 sqft)
Complex: Cornelius Woods
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The Allen Team Inc | MLS # 3717305 | Active
21024 Cornelia Grove Way -- 1 BR, 1 BA
Price: $234,500 (975 sqft)
Complex: Cornelius Woods
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The Allen Team Inc | MLS # 3717307 | Active

Listings 1 - 8 of 8