Can we Trust Zestimates?

[Tyler Emerson]

Hello all!

So I’m continuing my real estate endeavors by constantly looking for potential great deals in my free time using many different platforms to include apps such as Zillow.

I see that Zillow always has a “zestimate” or estimate on how much it thinks the value of the property is really worth. My question is, generally speaking how accurate do you think this is?

I don’t think I would EVER truly trust an app estimate over a subject matter expert such as an appraiser or the like. Nevertheless, I am curious what the Bigger Pockets Community has to say.

Hope all is well this holiday season!

-Tyler Emerson

[Frank Wong]

Hi Tyler,

I would not rely on the online estimates.  Most of them are incorrect.  Value of a house is not determined by an algorithm.  Cannot just lump all the homes together and base it on ppsft lot size etc.  There must be a human element involved.  A math formula does not know what the interior quality is, does not know the layout, does not know if there are train tracks or a busy street next to the house.  

For example, a big mistake I always see is someone comparing the ppsft of a 1300sqft house to a 2000sqft. A smaller house will always have a higher cost than a bigger.  Gotta compare apples to apples.  Determining value is the most crucial step in buying an investment.  Its part art and part science.  Master this and it will make you thousands and save you thousands.