Zillow Inaccuracy - Part 1

I want to start off by saying that this is not another "Let's Bash Zillow" blog post. As a Realtor, you have to be impressed by what Zillow has accomplished. They have changed the real estate industry forever and no real estate professional can deny that. In my opinion, some changes are good and some changes are bad. I am writing this mostly as a resource for my agents to use with our buyers and sellers as well as our readers who rely on 3rd party real estate website's data (Zillow, Movoto, Realtor, Trulia etc.)

"But Zillow says the home is only worth this much!"

There is nothing wrong with a home buyer using Zillow or other 3rd party real estate site as a resource or guide but they need to be careful in letting these websites dictate how much they are willing to pay for a property. We see buyers completely ignore reliable data about the Sarasota real estate market because they want to believe that these national portals are more accurate. Ultimately, buyers end up making ridiculous offers that no seller will accept because of the unreliable information. 

No computer algorithm is going to be able to tell you what a property is worth. There are just too many variables. Zillow and similar sites can do a good job of providing a range of value based on location, home size, lot size, age and neighborhood. However, these sites cannot really factor in condition or property upgrades into their valuation algorithm. 

Are Zillow's Zestimates Accurate?

Below are fifteen sales in Sarasota within the last two days. I compared the actual sales price to Zillow's Zestimate. Scroll down to see the screen shots of the Zestimate value. I wanted to compare them before Zillow's database changed. 

Of the 15 recent sales, Zillow estimated low on 9 of them and high on 6 of them. The average deviation between Zestimate and true market value (sold price) is about 15%. You need to be very careful using these numbers. In most instances, you are better off listening to your Realtor when it comes to evaluating Sarasota home values. 

Sales Price vs. Zestimate

I captured screen shots of each properties Zestimate before their database updated. 

	Sold Price	Zestimate	$ Difference	% Difference
	$210,000	$249,932	$39,932 High	19% High

I hope you found this post information. In the future, I will write similar posts comparing various 3rd party website valuations with actual sale prices. So, check back. ;-)