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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281 Tuskarora Trail -- 5 BR, 5.2 BA
Price: $3,200,000 (4217 sqft)
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Corcoran HM Properties | MLS # 3847897 | Active
356 Yacht Road -- 4 BR, 4.1 BA
Price: $3,150,000 (5045 sqft)
Subdivision: Williams
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Premier Sotheby's | MLS # 3883109 | Active
18612 Balmore Pines Lane -- 4 BR, 4 BA
Price: $3,100,000 (4681 sqft)
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Select Premium | MLS # 3866356 | Active
121 Chaco Lane -- 2 BR, 2 BA
Price: $3,000,000 (1308 sqft)
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#1 Properties of Lake | MLS # 3877042 | Active
132 Bunker Way -- 5 BR, 4.2 BA
Price: $2,995,000 (6895 sqft)
Subdivision: The Point
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Century 21 Lawrie | MLS # 3883313 | Active
17813 Spinnakers Reach Drive -- 5 BR, 4.1 BA
Price: $2,980,000 (6107 sqft)
Subdivision: The Peninsula
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Premier Sotheby's | MLS # 3862783 | Active
18805 Halyard Pointe Lane -- 4 BR, 3.1 BA
Price: $2,980,000 (5091 sqft)
Subdivision: The Peninsula
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Realty ONE Group | MLS # 3872303 | Active
4000 Channel Pointe Lane -- 4 BR, 5.2 BA
Price: $2,945,000 (6966 sqft)
Subdivision: Sailview
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EXP Realty LLC | MLS # 3884963 | Active
1 Ranger Island Road -- 5 BR, 4 BA
Price: $2,900,000 (4586 sqft)
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RE/MAX Executive | MLS # 3861699 | Active
20320 Havenview Drive -- 5 BR, 6 BA
Price: $2,895,000 (5763 sqft)
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Carlyle Properties | MLS # 3815589 | Active
187 Grasshopper Circle -- 4 BR, 5.1 BA
Price: $2,850,000 (5548 sqft)
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Premier Sotheby's | MLS # 3869173 | Active
318 Hermance Lane -- 5 BR, 4.1 BA
Price: $2,750,000 (5692 sqft)
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Keller Williams Lake | MLS # 3889548 | Active
438 Oak Tree Road -- 3 BR, 5 BA
Price: $2,699,000 (4303 sqft)
Subdivision: Timber Lane Shores
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J Meeks + Co | MLS # 3877592 | Active
4646 Sierra View Drive -- 4 BR, 4.1 BA
Price: $2,655,000 (5813 sqft)
Subdivision: Sailview
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Ivester Jackson | MLS # 3847345 | Active
19700 Shearwater Point Drive -- 4 BR, 3.1 BA
Price: $2,450,000 (3674 sqft)
Subdivision: Shearwater Point
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Ivester Jackson | MLS # 3876407 | Active
17520 Sail View Drive -- 4 BR, 3.1 BA
Price: $2,400,000 (3993 sqft)
Subdivision: The Peninsula
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Helen Adams Realty | MLS # 3843134 | Active
187 Grasshopper Circle -- 4 BR, 5.1 BA
Price: $2,395,000 (5548 sqft)
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Premier Sotheby's | MLS # 3879464 | Active
1033 Fern Hill Road -- 4 BR, 5.2 BA
Price: $2,350,000 (8389 sqft)
Subdivision: Woodleaf
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Corcoran HM Properties | MLS # 3891265 | Active
8074 Bradford Lane -- 6 BR, 6.1 BA
Price: $2,300,000 (6114 sqft)
Subdivision: Governors Landing
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NorthGroup Real | MLS # 3863850 | Active
937 Fern Hill Road -- 4 BR, 5.1 BA
Price: $2,195,000 (8728 sqft)
Subdivision: Woodleaf
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Corcoran HM Properties | MLS # 3890815 | Active

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Lake Norman Waterfront Condos for Sale

Lake Norman condos

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19532 Makayla Lane -- 2 BR, 2.1 BA
Price: $389,900 (1698 sqft)
Complex: Lake Norman Cove at Jetton
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OfferPad Brokerage LLC | MLS # 3870849 | Active
4117 Steel Way -- 4 BR, 3 BA
Price: $389,095 (2570 sqft)
Complex: Blackstone
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DR Horton Inc | MLS # 3883749 | Active
4121 Steel Way -- 4 BR, 3 BA
Price: $389,095 (2570 sqft)
Complex: Blackstone
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DR Horton Inc | MLS # 3875773 | Active
9007 Rosalyn Glen Road -- 3 BR, 2 BA
Price: $385,000 (1826 sqft)
Complex: Edinburgh Square
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Puma & Associates | MLS # 3875904 | Active
1276 Brawley School Road -- 3 BR, 2.1 BA
Price: $384,944 (1917 sqft)
Complex: Forest Lake
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TRI Pointe Homes Inc | MLS # 3883961 | Active
4161 Steel Way -- 4 BR, 3 BA
Price: $383,095 (2570 sqft)
Complex: Blackstone
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DR Horton Inc | MLS # 3876387 | Active
1276 Brawley School Road -- 3 BR, 2.1 BA
Price: $381,550 (1810 sqft)
Complex: Forest Lake
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TRI Pointe Homes Inc | MLS # 3842165 | Active
4105 Steel Way -- 4 BR, 3 BA
Price: $378,695 (2570 sqft)
Complex: Blackstone
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DR Horton Inc | MLS # 3892183 | Active
18709 Nautical Drive -- 2 BR, 2 BA
Price: $375,000 (1198 sqft)
Complex: Admirals Quarters
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Lake Norman Realty, | MLS # 3878945 | Active
4123 Steel Way -- 4 BR, 3 BA
Price: $374,795 (2570 sqft)
Complex: Blackstone
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DR Horton Inc | MLS # 3876336 | Active
4159 Steel Way -- 4 BR, 3 BA
Price: $371,795 (2570 sqft)
Complex: Blackstone
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DR Horton Inc | MLS # 3876380 | Active
4157 Steel Way -- 4 BR, 3 BA
Price: $371,795 (2570 sqft)
Complex: Blackstone
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DR Horton Inc | MLS # 3876359 | Active
18817 Nautical Drive -- 3 BR, 2 BA
Price: $369,900 (1133 sqft)
Complex: Admirals Quarters
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Northstar Real | MLS # 3891735 | Active
17420 Tuscany Lane -- 3 BR, 2.1 BA
Price: $365,000 (1440 sqft)
Complex: Tuscany Townes
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Puma & Associates | MLS # 3890498 | Active
4115 Steel Way -- 4 BR, 2.1 BA
Price: $362,205 (2395 sqft)
Complex: Blackstone
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DR Horton Inc | MLS # 3882054 | Active
18827 Cloverstone Circle -- 3 BR, 2.1 BA
Price: $361,000 (1713 sqft)
Complex: Edinburgh Square
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Mark Spain Real Estate | MLS # 3877659 | Active
7936 Mariners Pointe Circle -- 3 BR, 2.1 BA
Price: $355,000 (2051 sqft)
Complex: Mariners Pointe
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Espin Realty | MLS # 3888994 | Active
17535 Tuscany Lane -- 3 BR, 2.1 BA
Price: $335,000 (1376 sqft)
Complex: Bayview
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Premier South | MLS # 3886661 | Active
129 Beverly Chase Lane -- 3 BR, 2.1 BA
Price: $335,000 (1972 sqft)
Complex: Cypress Landing
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Royal Properties | MLS # 3890683 | Active
19831 Henderson Road -- 2 BR, 2 BA
Price: $335,000 (1005 sqft)
Complex: Winward Cove
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Wilkinson ERA Real | MLS # 3889714 | Active

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