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

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148 Lightship Drive -- 4 BR, 4.2 BA
Price: $7,995,000 (8360 sqft)
Subdivision: The Point
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Yates Realty Inc | MLS # 4210286 | Active
155 Union Chapel Drive -- 4 BR, 5.2 BA
Price: $7,950,000 (10079 sqft)
Subdivision: The Point
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Ivester Jackson | MLS # 4217767 | Active
8405 Ranger Island Marina Road -- 5 BR, 6.2 BA
Price: $7,500,000 (6490 sqft)
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Grandfather Homes Inc. | MLS # 4137705 | Active
4516 Slanting Bridge Road -- 3 BR, 2 BA
Price: $6,885,000 (1494 sqft)
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RE/MAX Executive | MLS # 4189074 | Active
102 Eastham Court -- 5 BR, 5.3 BA
Price: $6,250,000 (7788 sqft)
Subdivision: The Point
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Corcoran HM Properties | MLS # 4196147 | Active
132 Rollingwood Lane -- 4 BR, 5.2 BA
Price: $5,995,000 (6601 sqft)
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Coldwell Banker Realty | MLS # 4212873 | Active
108 Sail High Court -- 5 BR, 5.2 BA
Price: $5,950,000 (6735 sqft)
Subdivision: Westview
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Ivester Jackson | MLS # 4147056 | Active
18032 Nantz Road -- 5 BR, 6.1 BA
Price: $5,580,000 (4196 sqft)
Subdivision: Point Largo
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EXP Realty LLC | MLS # 4184600 | Active
18212 Pompano Place -- 4 BR, 4.1 BA
Price: $5,500,000 (4214 sqft)
Subdivision: Point Largo
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Milemma Realty | MLS # 4192450 | Active
124 Saylors Watch Lane -- 5 BR, 6.1 BA
Price: $5,300,000 (5095 sqft)
Subdivision: Saylors Watch
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Ivester Jackson | MLS # 4209551 | Active
166 Iron Gate Circle -- 4 BR, 6.1 BA
Price: $4,975,000 (4879 sqft)
Subdivision: The Cove
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Trump International | MLS # 4214572 | Active
20517 Queensdale Drive -- 4 BR, 4.1 BA
Price: $4,690,000 (5236 sqft)
Subdivision: Wrights Emerald Cove
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Knox Group, The | MLS # 4218703 | Active
123 Sailview Road -- 6 BR, 4.1 BA
Price: $4,689,900 (5925 sqft)
Subdivision: Alexander Island
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The Agency - Charlotte | MLS # 4149633 | Active
180 Willow Point Road -- 4 BR, 5.1 BA
Price: $4,500,000 (5102 sqft)
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Chosen Realty of NC | MLS # 4221786 | Active
110 Emmaline Court -- 6 BR, 6 BA
Price: $4,140,000 (5982 sqft)
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Wilson Realty | MLS # 4150553 | Active
5056 Bridge Way -- 4 BR, 4.1 BA
Price: $3,849,000 (6490 sqft)
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Magnolia Real Estate | MLS # 4206205 | Active
18210 Pompano Place -- 2 BR, 2 BA
Price: $3,500,000 (1922 sqft)
Subdivision: Point Largo
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Milemma Realty | MLS # 4193767 | Active
135 Holt Lane -- 4 BR, 5.1 BA
Price: $3,500,000 (4340 sqft)
Subdivision: Mccrary Woods
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Legacy Carolina | MLS # 4145257 | Active
1360 Brawley School Road -- 1 BR, 0.3 BA
Price: $3,500,000 (2860 sqft)
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#1 Properties of Lake | MLS # 4193441 | Active
116 Emmaline Court -- 4 BR, 4 BA
Price: $3,425,000 (4616 sqft)
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Wilson Realty | MLS # 4150567 | Active

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Lake Norman Waterfront Condos for Sale

Lake Norman condos

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19307 Beaufain Street -- 3 BR, 2.1 BA
Price: $599,900 (1916 sqft)
Complex: St Philip Square
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Trelora Realty INC | MLS # 4172528 | Active
160 Beacon Drive -- 3 BR, 3.1 BA
Price: $599,000 (3460 sqft)
Complex: Waterfront at Langtree
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RE/MAX Executive | MLS # 4171303 | Active
657 Portside Drive -- 2 BR, 2 BA
Price: $595,000 (987 sqft)
Complex: Portside
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Realty Dynamics Inc. | MLS # 4204017 | Active
1015 Southwest Drive -- 2 BR, 2 BA
Price: $585,000 (1128 sqft)
Complex: South Harbortowne
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Allen Tate Lake Norman | MLS # 4222403 | Active
19433 Battery Street -- 3 BR, 2.1 BA
Price: $579,900 (2164 sqft)
Complex: St Philip Square
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Milemma Realty | MLS # 4176759 | Active
20215 Middletown Road -- 3 BR, 2.1 BA
Price: $575,000 (2634 sqft)
Complex: St Philip Square
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Helen Adams Realty | MLS # 4213054 | Active
648 Portside Drive -- 2 BR, 2 BA
Price: $575,000 (1057 sqft)
Complex: Portside At Davidson Landing
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Ivester Jackson | MLS # 4222963 | Active
248 Singleton Road -- 0 BR, 0.1 BA
Price: $556,500 (2250 sqft)
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Chosen Realty of NC | MLS # 4192908 | Active
928 Southwest Drive -- 2 BR, 2 BA
Price: $545,000 (924 sqft)
Complex: Southpoint
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Lake Norman Realty, | MLS # 4195147 | Active
907 Southwest Drive -- 2 BR, 2 BA
Price: $515,000 (923 sqft)
Complex: Southpoint
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Premier Sotheby's | MLS # 4201884 | Active
18845 Cloverstone Circle -- 3 BR, 2.1 BA
Price: $490,000 (1921 sqft)
Complex: Edinburgh Square
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Kidd Realty | MLS # 4221599 | Active
2008 Surefire Court -- 3 BR, 3 BA
Price: $489,900 (2236 sqft)
Complex: 3 Cherry Way
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RE/MAX EXECUTIVE | MLS # 4220596 | Active
18731 Ramsey Cove Drive -- 3 BR, 2.1 BA
Price: $474,900 (1699 sqft)
Complex: Harborside Townhomes
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Chosen Realty of NC | MLS # 4206722 | Active
20528 Harbor View Drive -- 3 BR, 2.1 BA
Price: $469,900 (1896 sqft)
Complex: Lake Norman Cove at Jetton
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Newport Properties | MLS # 4156164 | Active
8176 Viscount Court -- 2 BR, 2 BA
Price: $435,000 (1777 sqft)
Complex: 3 Cherry Way
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Marc 1 Realty | MLS # 4214890 | Active
8466 Benton Court -- 3 BR, 3 BA
Price: $435,000 (2078 sqft)
Complex: 3 Cherry Way
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Allen Tate | MLS # 4220399 | Active
7108 Brookview Lane -- 4 BR, 3.1 BA
Price: $434,990 (2672 sqft)
Complex: Waterstone
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CCNC Realty Group LLC | MLS # 4208823 | Active
145 Beacon Drive -- 3 BR, 2.1 BA
Price: $430,000 (1865 sqft)
Complex: Waterfront at Langtree
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Overcash Real Estate | MLS # 4189165 | Active
7112 Brookview Lane -- 4 BR, 3.1 BA
Price: $429,990 (2672 sqft)
Complex: Waterstone
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CCNC Realty Group LLC | MLS # 4201056 | Active
18824 Nautical Drive -- 2 BR, 2 BA
Price: $425,000 (1070 sqft)
Complex: Admirals Quarters
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O'Shaughnessy Realty | MLS # 4213289 | Active

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