Accuracy of Zillow’s ‘Zestimate’ & CMA Tool
Breakdown of the Accuracy of Zillow’s ‘Zestimate’
You have the initial thought to sell your home. The first thing you do is go to Zillow.com & research recently sold homes near you & what you see your ‘Zestimate’ of your home’s value. While the number seems appealing & accurate based on your research, here’s why the accuracy of Zillow’s ‘Zestimate’ may not be the most trustworthy source.
For one, Zillow bases its home value estimate on public data, such as property taxes & tax assessments. These numbers tend to change & can be inaccurately reported, so these numbers may be outdated or wrong.
In an article investopedia.com, updates, renovations & upgrades are reportedly not included in this number either. Zillow doesn’t come into your home & see what you’ve done to the place. Zillow also uses a turnover rate in their ‘Zestimating’. This means that if there aren’t frequent home sales in your area, Zillow may not have a broad enough data set when determining averages in home sales.
While it’s easy to see that big, bold number & go down a rabbit hole of what you can do with your proceeds, the accuracy of Zillow’s ‘Zestimate’ is clearly not the most reliable source. Agents, like myself, use a different, more thorough approach to evaluating your home’s worth. Often times, our number exceeds any ‘Zestimate’ Zillow may have for you.
A CMA, or Comparable Market Analysis, is a tool that Realtors use in order to value your home in today’s current market. While Zillow takes property taxes paid, tax assessments, & public records into consideration when ‘Zestimating’, Realtors use a bit more.
When a prospective seller contacts me to sell their home, right off the bat I collect all the public information. I look at location, public records, & tax records. I start to generate a CMA, compiling this data, along with recently sold comparable homes nearby. Once I have a collection of recently sold homes, I start to adjust the dollar values of these recently sold homes so that they look more like the subject property. I take bedrooms, bathrooms, square footage, garages, and acreage into consideration.
Once I input all of this information, I generate a report for my client to review. Typically, I’ll set up an initial walk-through after that to see the home myself & determine what I couldn’t from public records. This looks like determining what updates have been done, if appliances have been upgraded, the style of the home, and any other highlights/ marketable, value-boosting aspects.
I’m always talking about upgrades that boost a home’s value. Certain aspects of a home are more important to potential buyers in different markets. Whether it’s an outdoor space, privacy, interior updates or a home office/gym, these are are parts of a home that are not included in your ‘Zestimate’, but are when I determine your home’s worth.
Determining Your Home’s Market Value
Zillow isn’t out to get anyone. They’re not giving a ‘Zestimate’ to watch people fail at selling their home. Zillow even states that home sellers should have a CMA done by a licensed professional to determine an accurate market value for a home.
As for the accuracy of Zillow’s ‘Zestimate’, it’s better to think of them as a range. Both buyers and sellers reference ‘zestimates’ in searching for their next move. While it’s good to get an idea of what has sold in your area and what homes are selling for in your area, it’s always a good idea to go one step further.
Most sellers use a Realtor to list & sell their home. We have a further reach to potential buyers & know the legal ins and outs of selling a home. We also take the stress away from you in keeping track of important dates, timelines, & events. If you’re planning to work with a Realtor anyway, let them use their expertise, knowledge of the current market & tools to give you a fair market value list price.
No value is ever firm & there is always room for negotiating, but let us help you & do our job. We are here to represent you & help you get the most value out of your home!
Ready to know what your home is truly worth? Head over to the ‘Contact’ page to get started!