Rental Property Investor · Member since 2018 · 11 posts · 4 votes
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.
Real Estate Broker · Bay Area · Member since 2018 · 1k+ posts · 3k+ votes
7y
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.
Rental Property Investor · Bloomington, IL · Member since 2018 · 55 posts · 90 votes
7y
I’m confident the zestimate on my house is at least 35% overstated based on its current level of finishes and condition and recent local comps. Moreover, my zestimate is predicted to increase by 6.5% in the next year, which I can tell you isn’t happening in my location.
Property Manager · Raleigh, NC · Member since 2014 · 728 posts · 596 votes
7y
@Tyler Emerson
not very accurate because it is looking on lot at sq ft, location, # if bedrooms, etc. it does not look at work that needs done, is kitchen remodeled, etc. I would not use it except as estimate.
Las Vegas, NV · Member since 2018 · 403 posts · 474 votes
7y
“Zestimate” is a dumb marketing word, which has nothing to do with actually estimating market value. Sometimes they’re close, but even a broken clock is right twice a day. I put zero faith in a website’s marketing word when it comes to evaluating something.
Rental Property Investor · Bloomington, IL · Member since 2018 · 55 posts · 90 votes
7y
Interesting thing I notice in my area - when I see a home listed at a price I feel is really optimistic based on recent sales I know to be comparable, the one thing they usually have in common is that they’re priced almost exactly at the zestimate. Sellers seem to have a tough time not anchoring on that number when it’s in their favor.
Specialist · Little Rock, AR · Member since 2015 · 95 posts · 149 votes
7y
The algorithms used average properties in an area. They don't compare like properties and I have seen them off by over 200k because upscale neighborhoods being smaller and nearby starter home neighborhoods being several times larger skew the models. Never use Zestimates for buying unless they are underpriced and you can use them to show the seller they are asking to much for their property. Only them can it be a powerful tool.