Remember the first time you heard about Zillow? I do. A friend called and told me about this "cool" new site that gave you the value of any property. I went to the site, put in my address and "poof" like magic I knew the value of my home. Being nosy as I am on occasion, I put in the addresses of everyone I knew so I could see the values of their homes.
Years later when I went into the real estate industry, I realized this "cool" site was really not so cool...values were not realistic or pertinent to the actual market. Homeowners were being given either an overinflated or undervalued estimate of the value of their property. It was frustrating to the homeowner and to the real estate professional.
So how does Zillow come up with their Estimate? They compute this figure by taking zillions of data points, much of which is public, and enter the data into a formula. This formula is built using what their statisticians call "a proprietary algorithm" which is another term for "secret formula". So what's in this formula? To determine home value, they explored how homes in certain areas were similar (i.e.; number of bathrooms, bedrooms, etc). Then they look at the relationships between actual sale prices the home details. These relationships form a pattern and that pattern is used to develop a model to estimate a market value for a home. Sounds logical right? The unfortunate aspect of this model is that the "model" cannot take into account any specific nuances to a city, neighborhood or house. Two homes with the same square footage next door to each other can be very different.
A real estate attorney has filed a suit against Zillow alleging that the real estate site's relatively modest estimate of her home's value has created a "roadblock" to selling it for what she believes is the true market value. Click on the link below for the full article about this lawsuit.
Bottom line...always rely on a local Real Estate professional for a valuation of your home. Local agents know their market and can give you an accurate fair market value for your home. Always remember, fair market value for a property is what a buyer is willing to pay and what a seller is willing to accept.
We can provide you with a free valuation of your home, just give us a call, text or email. We would be happy to share our analysis with you!
Vicki & Julie
Victoria Walker, CNE - 530.219.SOLD - firstname.lastname@example.org - BRE#01033786
Julie Maguire, CNE, Certified "Green" Realtor - 707.217.9138 - email@example.com - BRE#01932418