We all use Zillow and, depending on what it says, we either love it or hate it.
‘Zestimates’ are based on an algorithm that identifies a home’s unique value by comparing it to other homes that may or may not be similar. The critical component missing is “boots on the ground,” a live human being who has been in that home, and has been in other homes that would be comparable. Computer codes aren’t people.
Humans VS. Technology
Zillow gets market data from the same resources as real estate agents do – MLS, county records, etc. Real estate professionals analyze the data and identify potential mistakes based on our specific knowledge of neighborhoods, that specific house, area, etc.
Most people understand that no online evaluation can take the place of an experienced real estate agent. Sometimes the Zestimates are below a recent sale price but it only goes to show that algorithms are helpful—to a point.
Humans AND Technology
Zillow’s CEO recently sold his house in Seattle – the sales price was 40% below the Zestimate. According Zillow’s to Chief Analytics Officer, Stan Humphries, “The Zestimate from our perspective is a starting point and is one of many opinions of value people should collect if they’re going to transact real estate.”
So why did the Zestimate miss on this piece of property?
The house at 3808 E. Madison St. sits on a triangular-shaped lot and it’s also on a corner on a busy arterial. The Zestimate was being calculated against homes in the area on rectangular lots, which command a higher price because the lots provide more utility.
If you would like the clearest picture of the value of your home in the current market – whether you’re looking to sell or not – give me a call. Technology is an amazing tool but it can’t see what we can—a fabulous home or a fixer-upper—or somewhere in between.