Almost everyone has heard of Zillow and their “zestimates.” And any homeowner knows that the county tax assessor has an assessed value for your home. Do these numbers tell you what your home is worth? The answer is emphatically NO.
The zestimate is an AVM – an automated value model. In addition to Zillow, there are many different websites that offer AVM’s. I believe Redfin now has a proprietary one, not sure about Trulia, but just google and you’ll find many.
The AVM that most real estate brokers look at is one put out by CoreLogic and we access it throughout the Northwest Multiple Listing Service. This AVM is one of the most respected and “closest” to accurate AVM’s available.
An automated model takes the information from public records about your home – lot size, square footage, bedrooms, bathrooms, neighborhood – and comes up with a price range. But the fact that it’s automated makes it not particularly reliable. AVM’s do not reflect the unique features and characteristics of your home. View? 17,000 sq. ft. lot but most of it is sloped? Public records are often wrong – King County had my house missing a bathroom.
The only way to get a true estimate of price is for a real estate broker to look at your home and then look at what’s currently on the market, what’s pending, and what’s sold and see how it compares.
Here’s an example using a house in Greenlake that closed last week (I randomly selected a listing, did not look for one to prove my message).
Listed for $635,000; sold for $702,500 – Zillow zestimate of $553,636; Realist estimate of $577,646
If you dig through Zillow’s website, you’ll find that they say their estimates are off on average about 10%. In this case, it was off by 27%. (I’m not saying Zillow is bad, it can give an idea and can show trends, but clearly this is not reliable.) The Realist estimate was also off significantly at 21%. The King County Assessor has the home valued at $440,000, which reflects how off those assessments are. The Realtor had priced it at $635,000 which was her best estimate, yet it sold 10% higher than. Our lack of inventory is driving prices up.
Bottom line, if you want to get an idea what your home is worth, ask a Realtor to complete a complimentary market analysis for you.