If you have searched for houses on the internet in recent years, you have probably come across Zillow’s “Zestimate” tool. The “Zestimate” is an automated approximation of a home’s value. Many buyers and sellers have begun to view this tool as a great way to determine a property’s value, but how much should you rely on Zestimates to determine the value of your home?
The “Zestimate” tool uses sales data from tax records and Multiple Listing Services to determine an average value for each property. It finds homes priced similarly to yours, pulls the price per square foot information from the tax records, and then multiplies that price with your house’s tax records.
The negative thing about this algorithm is that tax records are commonly innacurate. If you’ve made home additions that weren’t permitted by the county, the added value of these won’t be taken into account in the tax record. The algorithm doesn’t “know” of any upgrades you’ve made in your house either. Those things you’ve spent your valuable time and money on are factors that you probably want to be considered into your home’s deserved price. Another thing Zestimates do not account for is the distribution of the square footage in your home in relation to its layout; some buyers would be willing to pay more for a ranch home than a two-story. Last, the location of your home is another factor that doesn’t get factored into the Zestimate; some cities are growing rapidly, and the housing prices rise or fall in accordance to this.
Even though Zillow’s Zestimates are handy to give the general (uninformed) public a basic ball-park figure for their house, they do not account for other important factors that would affect its true price. A Realtor is truly your best resource for comparative and knowledgeable home pricing. They know exactly how the housing market, area, home layout, additions, upgrades, and everything else would impact your home’s best price and its sale. After all, it is their job!