Do you know how much your home is really worth? Sellers and buyers often rely on a figure known as a Zestimate, produced by Zillow.com. Zillow’s intention is to create an accurate value estimate for the homes indexed by the site. Although it won’t give you a figure that’s on target, it can provide a price range to start with during your real estate negotiation.
What’s a Zestimate?
A Zestimate is Zillow’s attempt to use algorithms and publicly available data points that influence housing prices to estimate a home’s value. How can anyone provide a home value without ever stepping foot on the property? Ultimately, a home is only worth what a seller is willing to sell for and what a buyer is willing buy for-this is true market value!
Zestimates became popular because outside of an appraisal or comparative market analysis generated by an experienced Realtor, it can be really hard to gauge if a property’s value is increasing or decreasing.
Zestimates have been responsible for a great deal of confusion since Zillow started using the original algorithm. Even though the algorithm has been upgraded several times, it’s not perfect-well, appraisers aren’t either, but they are far more accurate than Zestimates. Unfortunately, many buyers and sellers treat Zestimates as gold because most people don’t really know what goes into valuing a home.
Having an overview of the neighborhood’s comps is helpful, but you have to allow for wiggle room. Just because a house listed down the street has a Zestimate of $303,000 and it closely matches to your home, it doesn’t mean you won’t get more (or less) when you go to sell.
If you’ve reached that point where you’re ready to buy or sell a home and want a more accurate price point to start from, contact me for a complimentary comparative market analysis.
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