If you have ever searched for properties on Zillow, you have probably noticed Zillow’s Zestimates. A Zillow Zestimate is a popular tool used among home buyers and sellers. It’s meant to give consumers and homeowners an estimate of what a property is worth.
You you may be surprised to know that Zillow Zestimates are not as accurate as you may think. Lets explore what a Zestimate is, how it’s calculated, and how accurate it is in Olmsted county.
What is a Zillow Zestimate?
A Zillow Zestimate is a home valuation tool used to come up with a home’s “market value.” It is computed using a proprietary formula that takes into account many factors and data points. In other words, it’s an estimate and should simply be a starting point to estimating a home’s value.
Zillow makes it clear that a Zestimate is not an Appraisal. They also suggest having a comparative market analysis (CMA) from a real estate agent. (See image below)
How is a Zillow Zestimate Calculated?
A Zestimate is calculated using a proprietary automated valuation model. The model uses advance algorithms to essentially figure out the Zestimate. For more details and exact information please read the image below.
How accurate is a Zestimate in Olmsted County Minnesota?
Zillow rates Olmsted county as having a 3-star accuracy. Zillow defines this as a “Good Zestimate”. An interesting statistic for Olmsted County is 89.6% of Zestimates fall within 20% of the sale price. This doesn’t mean that a Zestimate is useless. More so, it’s a starting point and will require more research.
Conclusion: How Realtors Add Value
In conclusion, let’s talk about how a Realtor will add value to accurately price a home.
A Realtor with local market knowledge will help you accurately price your home. A Relator doesn’t want you to under-price or overprice your property. Moreover, a Realtor will know the neighborhood trends, improvements not shown on Zillow, top schools etc. This will be important information and insight to maximize the asking price for a home.
On the other hand, a Realtor also knows the factors that decrease the value of a home. For example, if a home has deferred maintenance, outdated finishes or undesirable items, a Realtor can consider these items when pricing the home. Therefore, if you want to increase the price on the home you can make the necessary changes or price the home accordingly to ensure a timely sale of the home.
If you would like to get a free estimate of your home value click here.
Bonus: Zilow’s CEO Spencer Rascoff’s Home Sold for 40% less than Zestimate $1.75M
Check out this article for more information on this story.