How Valid is a Zestimate?

    Zestimate

    They’re out there – countless real estates sites trying to reel you in! From Trulia, to Redfin, to Zillow, and more! But why should you avoid these sites? Let’s talk about Zillow’s Zestimate as an example.

    The Zestimate is apparently supposed to give you a good picture of what a particular house is worth, but does it? Not even close! A Zestimate is simply a basic mathematical calculation (an average) of the home’s assessment value (the value that determines how much you pay in annual property taxes), as well as comparables (recently sold properties in the area), that basically tell us what other consumers have been willing to pay for similar homes in the area. Don’t forget, a home’s value, ultimately, is what a consumer is willing to pay for it.

    Now assessments are almost never as high as what the actual home is worth to begin with, but that’s good for you – you want them to be low because that means you pay less in property taxes. That doesn’t mean your house is worth less. And recently sold homes in the area, yes, that’s how appraisers and agents determine a home’s value as well, but what happens if the home you’re looking at has been purchased by an investor 2 months ago and completely overhauled? That purchase price they paid a couple of months ago will be taken into account for a Zestimate also, and could be even a couple of hundred thousand dollars less!

    Not to mention other upgrades. Zillow doesn’t know if you have granite countertops and stainless steel appliances, or if you’ve just installed all new hardwoods throughout your house. It also doesn’t know if you’ve added an extra bathroom when you finished the basement, but all these factors add value, and that is something that appraisers and agents do (adjustments) when determining the fair market value of a home.

    You wouldn’t trust a computer to diagnose you when you’re ill, would you? No, you go see a doctor; a real, live person who can analyze the situation based on many factors. So why let a computer tell you what your house is worth? If you’re looking to sell, call us for a FREE Comparative Market Analysis today! And if you’re buying, trust that your agent has done their due diligence to estimate an accurate value to equip you for a good, fair offer. And don’t forget, the bank still needs to deem the house that valuable as well, so the appraiser will tell you if you offered too much.

    In today’s world of some amazing technology, sometimes it’s better to just use the good old method of speaking to a person. Questions? Pick up the phone and call us! 🙂

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