Many clients often ask RealSmart about Zestimates and their accuracy. Time and again, these zestimates prove to be widely off-mark and do little more than confuse and mislead people.
According to Zillow , the "Zestimate® home valuation is Zillow's estimated market value, computed using a proprietary formula." They show up on their website directly next to the image of the home:
By Zillow's own admission, the Bay Area market is not its strong point for accurate Zestimates.
As a real estate company, our job is to not only give our clients the most up to date data, but to provide them with the most accurate price that is appropriate for the current market based on comps, history, and factors specific to each property. As you can see from Zillow’s mere 2-star accuracy rating across all of RealSmart's home counties, this is a human skill that a computer just cannot replicate in this market.
As a real estate company, our job is to not only give our clients the most up to date data, but to provide them with the most accurate price that is appropriate for the current market based on comps, history, and factors specific to each property. As you can see from Zillow’s mere 2-star accuracy rating across all of RealSmart's home counties, this is a human skill that a computer just cannot replicate in this market.
Pictured Above: A Screenshot of Zillow's Accuracy Ratings For RealSmart's Home Counties
Take for example RealSmart's listing on E St in San Carlos. The property's Zestimate at the time of sale was $735,296. The property, however, sold for $820,000 - that's a difference of $85,000! Another property, also in San Carlos, had a Zestimate of $895,568 at the time of sale and sold for $1,010,000 - a difference of $114,000!
Though both of these examples show Zillow's conservative estimates, it's important that clients know that the opposite can also be true.
"It's difficult for a home seller to be told that their home isn't worth as much as Zillow's Zestimates, especially after seeing those big-numbered price tags. An unrealistically high Zestimate can get a person's hopes up, and bring deep disappointment when the homeowner realizes their home is unlikely to sell for a price even close to what Zillow is telling them. It's important to talk to your real estate agent before making a judgement on the value of your home." - Bryan Jacobs, RealSmart Broker
RealSmart prides itself in its accurate pricing strategy and we urge all clients and potential clients to take Zillow's Zestimates with a hefty grain of salt.
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