I know that Zillow estimate are not extremely accurate, but i am curious if it could be a quick way to see if property Could be a good deal. With flippers and Brrrr investors how close is it after you refinance or sell from that estimate?
@Eric Finn - I have seen Zillow estimates be extremely close, and I have seen them be off by hundreds of thousands of dollars. It really depends on the area and if Zillow has accurate information on bed/bath count and sq ft. I personally wouldn't recommend counting on Zillow. Its best to find your own comps to determine value.
This will vary widely from market to market, depending on Zillow's access to market data.
The good news is, it's relatively easy to validate how accurate it is for your market:
- Have your realtor pull 50 or 100 active and sold homes in the market/neighborhood you want to analyze.
- Compare actual asking and sold prices to the Zestimate for each one, put them in a spreadsheet, and develop some averages.
If you can say with confidence that the Zestimate is usually within 10% of reality in your market, or is consistently 20% high (or whatever), then it can be a useful rough screening tool for a quick desktop analysis.
This works in some markets, but it others the variability makes it useless.
LOL LOL LOL. Stupid is as stupid does. I am talking about the computer. You can not program a computer to decipher human judgements such as appeal, quality and physical condition. Now last time I checked, all of these are very significant to value. All AVMs (Automated Valuation Models) are programs that rely on the data you see on paper; age, sf, location, etc. The problem is that people don't purchase property quite that systematically. Further, age does not always matter. Size does not always matter either. Location appeal can change in a matter of blocks. It takes someone familiar with a market to know these things. Zillow will be accurate occasionally in a very homogenous area with very homogenous buyers. The problem is that doesn't happen in most markets.
What Zillow can do for you, is provide you with some data. Learn to be your own appraiser. You will always be better than Zillow if you just give it a think instead of expecting to be told. Look at the sales data Zillow provides you - ever notice that in most markets there is a very wide range of value found within a very small area? You need to dig in and find out why. You might discover there is no good reason for a wide range of value and when you find that, you have discovered opportunity - your welcome. Until you learn to be your own appraiser, best to just call one.
Sometimes Zillow is very accurate, particularly when it's in a cookie cutter neighborhood. Other times, it can be pretty off, especially since it can't really take into account the condition of the property. It's not a bad place to look at first, but you have to keep a lot of asterisks and caveats in mind when doing so.
Yeah, it seems like all it does is take the sq footage, the amount of bedrooms, and the amount of bathrooms into consideration. I was just curious to see if anyone has used it before a flip or refinance to help gauge what they can potentially sell it for.