What is a Zestimate and how should it be used?
Millions of individuals visit Zillow every month and most of these consumers understand that the Zestimate is just that. It is an estimate of the value of a home. Zillow understands their their Zestimates can be very different that the property sales price. Should you have any questions regarding your home's Zestimate call us. We are always happy to help you understand how this figure is derived. Learn more about our relationship with Zillow.
Did you know that Zestimates can be off by 30% or more?
Nothing illustrates this better than the sale of Zillow CEO Spenser Rascoff's Seattle home in 2016. Rascoff sold his Seattle Home for $650,000 less than Zillow's Zestimate, a 38.2% discrepancy (Zestimate: $1,700,000 Sale Price: $1,050,000). Roughly 20% of all homes with a Zestimate on Zillow miss the sales price by more than 20% like the example of Rascoff's Madison Park home.
Zillow launched the Zillow Prize of $1,000,000 to the group that can improve their Zestimates. Buyers or sellers who base their price opinion solely on the Zestimate need to understand the process behind this valuation estimate. On January 30th, 2019 Zillow announced the winner: Team ChaNJestimate. This team was made up fo a member from the US, Morocco, and Canada beating 3,800 other teams to win the $1 Million Prize. Consumers need to understand Zestimate Data Accuracy Tables and Zillow's Own Accuracy Numbers. Zillow suggests that their Zestimate be used as a starting point, but a Professional Realtor should always be used to determine the pricing of a home. Because a computer algorithm can not go into a home and understand the amenities and upgrades that can change a sales price, the Zestimate should not be used to determine the value of a property.Education is the key.
Zillow's Accuracy Table for Florida & Lee County:
Last updated: July 25, 2018
Note:
Zestimate accuracy is computed by comparing the final sale price to the Zestimate on or before the sale date. The data herein is computed for the three-month period ending June 30th, 2018.
What is the Zillow Prize?
To win the $1 million grand prize, the winning algorithm model must beat Zillow’s benchmark accuracy on the second round competition data set when compared against real-time home sales in the summer of 2018, and enhance the accuracy further than any other submitted model. There were 100 teams that competed for this prize and the winner was announced in 2019. TeamChaNJestimate beat more than 3,800 teams to win the 1$ Million dollar prize to help Zillow's Zestimate accuracy.
Regardless of how you feel about the accuracy of Zillow's Zestimate, buyers are using Zillow. Zillow has made searching for a home streamlined. In 2016 more google searches were conducted for the word "Zillow" than the phrase "real estate". This is a giant shift in buyer, seller, and owner behavior. Zillow is continuing to improve their buyer's experience and as we have pointed out, Zillow is also keenly aware of the Zestimate shortcomings.
We look forward to discussing your home and how accurate the Zestimate may or may not be. If you are a buyer, this also applies to your searches as many of the Zestimates are not in alignment with home values. Real estate values require on-site determinations of the property in person. The size of a home means very little if the home has been neglected over the years, or major improvements have been made that are not visible to Zillow's algorithm that determines the Zestimate.
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