|Summary: Determining the worth of your home without the help of a local real estate agent was a near impossibility, until Zillow. So how does it work?|
I'm fascinated by Zillow. When I found out about the Zillow website in 2006, I began using it to check out the value of our home, our neighbor's homes, my relatives homes, and homes where I might want to live someday. Zillow.com, is a website designed to determine the market worth of nearly any home in the country, whether it’s on the market or not. Zillow was created by two former Microsoft employees, who also happen to be the founders of the popular travel website Expedia. Zillow has rapidly become one of the Internet’s most visited real estate sites.
What is My Home Worth?
Finding the buying or selling price of a home can involve a considerable amount of time and effort. For the most accurate home price estimates, you should always consider using a real estate professional who is familiar with the area in which you're buying or selling. Determining the worth of your home without the help of a local real estate agent was a near impossibility, until Zillow. So how does it work?
So how does it work? Using Zillow is surprisingly simple, just type in an address and then look at the estimate, which Zillow calls Zestimates. Zillow doesn’t attempt to cut realtors entirely out of the picture, though. It does estimate home values but it doesn’t actually sell anything. If you want to buy or sell a house you looked up on Zillow, you and most likely your real estate agent, will still have a lot of work left to do.
But are Zillow’s Zestimates accurate? You might hate to hear this but sometimes they are and sometimes they aren’t. Although Zillow does allow users to modify a home’s information (mentioning a newly installed deck or modified kitchen, for example), thereby changing the Zestimate. There are still many potentially important factors such as the school zone, noisy neighbors, and how well the house has been cared for, that aren’t taken into account when creating a Zestimate. Because of this, the values of homes in Zillow can be overestimated or underestimated, sometimes by a significant amount
When all is said and done, Zillow claims that, of all the homes whose values they’ve estimated (somewhere around 57% of all the homes in the US), 65% of those Zestimates can be considered accurate (with the definition of accurate being ‘within 10% of the actual selling price’). While those numbers aren’t that bad, there is certainly much room for improvement. Another thing to keep in mind is that the amount of houses listed and the accuracy of the Zestimates for those houses can vary considerably by location. Although Zillow is constantly working to improve its accuracy, it’s hard to say how much it will improve or how long those improvements will take.
While many people love Zillow, accurate or not, it’s not without its share of detractors. Neighborhood associations have sometimes taken issue with Zillow’s Zestimates for the homes in their neighborhood and there have also been accusations that Zestimates in minority neighborhoods are skewed due to discrimination. Real estate agencies have also voiced complaints about Zillow, claiming that there are too many factors not taken into account by its estimates. In addition, they say that it can give some homeowners unrealistic selling price expectations, making those homes difficult, if not impossible, to sell if the owner remains adamant about the incorrect price.
So what should you do if you want to know how much your home is worth? The answer is actually quite simple, go to multiple sources. Zillow, while it can be useful, is just a tool and it’s not always correct, or in some cases, even close. Don’t ignore Zillow, it’s still a quick and easy way to get an idea of your home’s worth, just don’t take its Zestimate to be the definitive value. Instead, do a bit more research first. Take a look at the market and be realistic about prices. Talk to neighbors about prices and take into consideration any potential perks or problems in the neighborhood itself that could raise or lower the value of your home. Finally, talk to a real estate agent about prices. It’s their job to know the market, the locations, and how everything fits together. This knowledge could quite possibly allow them to see some important factors that you do not.
In the end, the process of selling your home really hasn’t changed all that much. Zillow may have made things a little easier but remember that when determining a selling price for your home, as with many other important decisions, it’s always good to get multiple opinions from qualified professionals.