How accurate are the estimates on Zillow?

Question

Hey BP community, quick question: How accurate is Zillow on property values? I'm constantly looking at houses, and I always look at what houses previously sold for. Typically, there is some decent info on the sales history, but I have come across a house in my area that has really intrigued me. Zillow doesn't list any previous sales history, but it has a pretty high "zestimate". In my opinion the asking price on the house is a little high so I feel that there is some room to go down on the offer. I have looked to Zillow to compare prices of houses in the same neighborhood/same street. I have only found one with previous sale price records, and the rest are all "Zestimated" values, and there is a range from 15-50k difference in value. So yeah, any input and opinions on this would be much appreciated. I have over 10 years experience in residential construction/remodeling and I am determined for 2018 to be the year I start REI through flips and/or rental property. BP,  thank you!

Andrew Johnson · Answer

@Kyle Freed Search the forums, this topic comes up about once a month.  The bottom line is that they aren't accurate.  I wish mine was accurate, I'd probably have another $200K in equity in my house.  Yee haw!  Oh how I wish...wish...wish Zestimates were close to reality.  They aren't.  If you're *not* in a non-disclosure state you're better off ballparking from actual, sold properties.  While it's really hard to know about fit/finish or things of that nature you'll get something a little more accurate (in my opinion) than the Zestimate construct.

Your best course of action is talking to a realtor familiar with the area.  You'll likely want a buyer's agent anyway if you're going to make an offer and they can pull sold-comps to help you through what their "fair market" estimate would be for the property.

Kyle Freed · Answer

I appreciate the advice, Nick. Thank you!

Nick Vehr · Answer

You should get in contact with a Realtor and have them pull the comps. Zillow can be spot on, or completely off base. I have a property which has a "zestimate" 35% higher than I could ever hope to get it appraised for. It can be used to get ideas of prices, but do your homework after.