I probably get asked once a month about a “Zestimate” someone saw for a house on Zillow and I take a deep breath and try to explain algorithms and averages and updates and fixers and and and and…. I usually get a blank stare in response when I let said individual know that Zestimates are no way gospel for what a home is worth or what a buyer will pay in any given market. For the most part, the condition and/or desirability has a LOT to do with impacting value on homes…much more than an average of a marketplace will decide.
I saw this article today via Facebook via LA Times that shares with us that even the CEO of Zillow thinks the Zestimates have a margin of error averaging 8%!!! Eight percent??? Eight percent for a 2000 sf home in Folsom right now gives you a margin of error of $30K to $40K! Whoa! Crazy!
The best way to figure out a home value is to ask an appraiser, for a cost (cha ching!), or someone like me in the real estate world who can look into the condition of home, seller credits, etc. I’ll give you a price range (much less than 40K!) that will let you know what I think a specific home is worth, after looking at comparables in the subject neighborhood, and adjust the value for condition, pools, etc.
Use Zillow’s Zestimates with caution. Like the article says, they’re a great starting point. Use them for historical trends, not accurate prices to base your offer on.