Is It Possible to Raise a Zestimate on Zillow?
The shown value of the house is often much lower than what it should be, leading many homeowners to question if they can raise a Zestimate on Zillow. This article will delve into the reasons behind the low estimate, whether it is possible to improve it, and the importance of relying on professional appraisals and real estate knowledge.
Understanding the Zestimate
Firstly, it's important to understand that the Zestimate provided by Zillow is not a definitive market value of your home. Rather, it is an estimated value generated by an algorithm using various data points such as recent closed home prices in the area, square footage, and other relevant factors. The information is typically sourced from the Multiple Listing Service (MLS).
The Zestimate’s reliance on this data means that any errors or inaccuracies in the MLS information can significantly affect the estimated value. For instance, if a piece of land was mistakenly input as a home, this would drag down the average Zestimate. Similarly, a property sold at a drastic discount due to a family transaction could skew the comparables used in the estimation process.
Why Increasing Your Zillow Value is Important
Some may wonder why it is crucial to increase the Zestimate. However, given the inherent inaccuracies and the lack of direct relevance to actual market value, it is more important to focus on a realistic and accurate assessment of your home’s worth.
The Zestimate has an error factor of up to 20%, as admitted by Zillow themselves. As a professional real estate agent and investor, I often receive periodic Zillow updates, but these estimates are more of a fun amusement than a serious valuation tool. For a more accurate picture of your home's value, it is recommended to develop a relationship with a local realtor who can provide periodic updates and insights into the real market value.
Why Not Rely on the Zestimate?
There are several reasons why relying solely on the Zestimate to determine your home's value is not advisable:
Market Decides Value: The market, not Zillow, determines the true value of your home. As the market decides, the Zestimate can take a while to reflect current market conditions accurately.
Realtor Expertise: A professional local realtor has in-depth knowledge of the real estate market, including recent sales data and current trends. This expertise is invaluable when it comes to determining the true value of your home.
Appraiser's Insight: While appraisers generally use more sophisticated methods, a realtor can often get a close estimate from recent comparable sales in your neighborhood, providing a strong basis for understanding your home's value.
Zillow’s Business Model: Zillow is primarily focused on advertising, and while they aim to provide accurate estimates, the nature of their business model does not guarantee high accuracy.
Moreover, the example of Zestimiss: How Zillow’s CEO’s Home Sold for 40% Less Than Its Zestimate further illustrates that the Zestimate should be treated with caution. Even the CEO of Zillow’s own home sold for 40% less than the Zestimate, highlighting the variability and potential inaccuracies of the Zestimate.
Conclusion
While it might be tempting to try to raise a Zestimate, it is more important to focus on obtaining a realistic and accurate valuation through the services of a professional realtor or appraiser. The Zestimate, while useful as a starting point, is not a reliable source of home values and should not be the sole basis for making real estate decisions.