What’s Wrong With a Zestimate?

Lots of our clients love using Zillow for their real estate searching, and we get it: we love Zillow too. But you have to know its limits.

We happen to know the Zestimate above is about $300,000 below the current market value of this Marin County home. There are a few likely reasons.

It can’t see condition or updates

Zillow has no idea about a home’s condition or the updates made to it. This property is more updated than others in the neighborhood, with high-quality finishes in the kitchen and bathrooms. Zillow also doesn’t know that the square footage in the tax records is wrong: an addition increased the number of bedrooms, and with it the home’s desirability.

The data behind it lags

The data flowing into Zestimates isn’t always accurate. Clients sometimes send us “active” homes from Zillow and ask why they don’t appear as active in our MLS; when we check, the home almost always sold months ago and Zillow hadn’t updated. Zillow pulls from MLS data, but not always promptly.

That affects more than the one listing. Zestimates are built from comps, nearby homes that have sold, so when sales don’t show up in time, the estimates aren’t based on real, current data points.

Use it, but with a grain of salt

Zillow has fun tools and can be a great resource. But a Zestimate is not a substitute for a real market analysis from an agent or appraiser, and it can be off by hundreds of thousands of dollars.